Elon Musk has just won a court case related to severance pay at Twitter. Over 6,000 employees lost their jobs in the social media giant when he acquired it. A former employee, Courtney McMillian, had filed a class-action lawsuit against Musk for failing to provide full severance allowances mandated under federal law.
The lawsuit came under the Employee Retirement Income Security Act, and it claimed that three months’ pay was owed in severance for the laid-off workers. However, US District Judge Trina Thompson has dismissed a class-action complaint, saying the severance plan in question was not covered under ERISA because the employees were formerly notified that a different payout scheme would be used before the layoffs were announced.
Although this ruling by Judge Thompson does allow the plaintiffs to amend their complaint for non-ERISA claims, this case can further proceed, where future legal actions may be taken to stake a larger compensation surrounding former employees.
Other lawsuits are pending against X Corp/Twitter, such as those by former top executives who claim millions in unpaid severance and legal fees. Cases that create a portrait of complexity around the legal tussles between corporate acquisitions and employee rights in Silicon Valley.
While Musk’s victory is a defeat for fired Twitter employees hoping to fight for full severance under ERISA, the door remains open to pursue other future legal avenues toward fair compensation.
