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Elon Musk Defeats $500 Million Twitter Severance Lawsuit

Tesla CEO Elon Musk sitting on a chair

A judge has tossed a suit by former Twitter employees accusing the company’s owner, Elon Musk, of unpaid severance.

The lawsuit claims Musk unlawfully denied around $500 million in severance payments to workers terminated following his acquisition of the company. 

Judge Trina Thompson ruled the employees had not demonstrated that their claims were protected under federal law.

The decision marks a victory for Musk, who acquired Twitter in 2022 and implemented sweeping changes, including dismissing thousands of employees. 

These actions led to lawsuits from former staff and vendors, alleging that the company failed to fulfill promised payments.

The suit was initiated in 2023 in a San Francisco federal court by Courtney McMillian.

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The former "head of total rewards" at Twitter, now called X, claimed that the company provided only one month's pay as severance. 

This was far less than the promised benefits, which included at least two months of salary and health insurance contributions.

"We are disappointed in the ruling and are considering our options for moving forward”

Musk's legal team argued for dismissing the complaint.

They say the Employee Retirement Income Security Act (ERISA), which sets standards for private health and pension plans, did not apply in this case.

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A spokesperson for McMillian's team said: "We are disappointed in the ruling and are considering our options for moving forward.”

Other legal actions, including one by former company top executives, are still progressing in court. 

In her ruling, Judge Thompson referenced these ongoing disputes, indicating that the employees might have other avenues to pursue their claims.

She wrote: "The Court lacks jurisdiction. However, plaintiffs are not without recourse. 

“Indeed, there are other cases brought against Twitter for the failure to pay wages or provide employee severance benefits during the same or overlapping period.”

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