Elon Musk and Twitter (now X) Win Lawsuit Against Former Employees But Similar Lawsuits Are Ongoing
TapTechNews July 10th news, the process of Elon Musk's acquisition of Twitter in October 2022 can be described as full of twists and turns. After the acquisition was completed, Musk carried out layoffs at this social media company, which triggered a large number of lawsuits from former Twitter employees. Recently, one of the lawsuits against Musk and Twitter (now known as X) ended in defeat.
This lawsuit was filed by the former Head of Total Rewards Courtney McMillian and another former executive. They alleged that Musk and X Corp. should pay at least 500 million US dollars (TapTechNews note: currently about 3.641 billion Chinese yuan) in severance pay to approximately 6,000 former Twitter employees according to the Employee Retirement Income Security Act (ERISA).
According to a previous report by the BBC, Twitter has a regulation that employees can receive a minimum of two months' basic salary as severance pay, as well as cash subsidies for medical insurance and other benefits. The severance pay for senior positions (such as McMillian herself) is six months' basic salary plus one week's salary for each full year of work experience.
However, Twitter employees who were laid off after Musk took over received a maximum of only three months' salary, including one month's severance pay and two months' salary for complying with US laws. Musk mentioned this in an X platform post in November 2022. He said, All departing employees received 3 months' severance pay, which is 50% more than the law requires.
The San Francisco District Court judge, Trina Thompson, ruled on Tuesday that since Twitter informed employees after Musk's acquisition that any departing person would only receive cash compensation, the former employees' severance pay request does not apply to the Employee Retirement Income Security Act.
Although Elon Musk and X Corp. won the lawsuit against the former head of total rewards, other lawsuits of a similar nature are still being heard.