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Elon Musk Wins Legal Battle Over Twitter Severance

Elon Musk emerged victorious in a legal battle concerning severance payments to over 6,000 former Twitter employees
July 11, 2024

Elon Musk's tumultuous takeover of Twitter in 2022 continues to stir legal challenges, with recent developments marking a significant turn in one of the lawsuits against him. A federal judge ruled against X Corp. on Tuesday, dismissing claims that Musk's company owed severance pay to over 6,000 former Twitter employees.

Initially, the lawsuit alleged that these employees received less severance than what was promised under Twitter's previous Severance Plan, which Musk confirmed via tweet. The plan, active since 2019, had guaranteed senior employees up to six months of severance pay. Plaintiffs estimated Musk's liability at over $500 million under the federal Employee Retirement Income Security Act (ERISA).

However, U.S. District Judge Trina Thompson's ruling in San Francisco determined that ERISA protections did not apply in this case. The court found that X Corp. had adequately notified employees post-takeover that they would only receive cash payouts, thus excluding them from Twitter's prior severance terms.

This legal victory for Musk comes amid ongoing challenges. Additional lawsuits, including claims by former Twitter executives seeking severance payments totaling $128 million, and another from senior employees seeking over $1 million, remain unresolved. Musk contends he never agreed to these former employees' benefit plans, setting the stage for continued legal battles.

Despite cutting down Twitter's workforce drastically, reducing it from about 8,000 to 1,500 employees, Musk's efforts to streamline operations have not shielded X Corp. from financial difficulties. Reports indicate substantial losses, highlighting the ongoing repercussions of Musk's controversial restructuring decisions.

As Musk navigates these legal complexities, the outcome of future lawsuits will likely shape the broader implications of his tenure at Twitter and its impact on former employees.

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