Elon Musk’s acquisition of Twitter has sparked numerous legal challenges, and a recent court decision has added a new chapter to this ongoing saga. At the heart of the latest legal battle was a class-action lawsuit filed by former Twitter employee Courtney McMillian.
The lawsuit contended that under the federal Employee Retirement Income Security Act (ERISA), laid-off Twitter employees were entitled to three months of pay as severance. However, they alleged they received less than that amount, seeking $500 million in unpaid severance from Musk’s Twitter.
In a significant development, US District Judge Trina Thompson, presiding over the case in the Northern District of California, granted Elon Musk’s motion to dismiss the class-action complaint.
Judge Thompson’s decision pivoted on her finding that the severance plan offered by Twitter did not meet ERISA’s requirements. This was because employees had been notified of an alternative payout scheme prior to their layoffs, which differed from the 2019 plan the plaintiffs had expected.
While this ruling represents a setback for the affected former Twitter employees, it also leaves the door open for potential future legal actions.
Judge Thompson indicated that the plaintiffs could amend their complaint to pursue claims outside the scope of ERISA. This includes potential claims related to other ongoing lawsuits against X Corp/Twitter, involving issues such as unpaid severance and legal fees.
The implications of this decision are far-reaching, affecting thousands of former Twitter staffers who were part of the layoffs following Musk’s acquisition. It underscores the complex legal landscape surrounding corporate acquisitions and employee rights, particularly in cases where different severance plans and legal obligations intersect.
Despite this initial setback, the legal battle is not over. The possibility remains for the plaintiffs to amend their claims and seek redress through alternative legal avenues.
For now, however, Elon Musk has secured a legal victory in this particular class-action lawsuit, highlighting the intricate challenges faced by employees in high-profile corporate transitions.
