Elon Musk accused of not paying $500 million in severance, ex-employees sue Twitter

After billionaire Elon Musk acquired Twitter Inc in 2022, the microblogging site on Wednesday was hit with a lawsuit accusing it of refusing to pay at least $500 million in promised severance to thousands of employees who were sacked in the layoff drive, according to a report published by Reuters. 

Courtney McMillian oversaw Twitter’s employee benefits programs as its “head of total rewards” before she was laid off in January. She filed the proposed class action in San Francisco federal court.

Under a severance plan created by Twitter in 2019, McMillian claims most workers promised two months of their base pay plus one week of pay for each full year of service if they were laid off, McMillian claims in the lawsuit. 

According to the lawsuit, senior employees such as McMillian were owed six months of base pay. However, Twitter only gave laid-off workers at most one month of severance pay, and many of them did not receive anything, she further noted. 

Twitter laid off more than half of its workforce as a cost-cutting measure after Musk acquired the company in October. The company no longer has a media relations department.

The lawsuit accuses Twitter and Musk of violating a federal law regulating employee benefit plans. Twitter has already been sued for allegedly failing to pay severance, but those cases involve breach of contract claims and not the benefits law. The company has said it has paid ex-employees in full, Reuters reported. 

A pending lawsuit filed last month accuses Twitter of also failing to pay millions of dollars in bonuses it owes to remaining employees. Twitter has said the claims lack merit.

The company is also facing a series of other lawsuits stemming from the layoffs that began last year, including claims that it targeted women and workers with disabilities. 

Twitter has denied wrongdoing in the cases in which it has filed responses. 

Information Source: livemint

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