A former Twitter employee alleged Wednesday that the company and its billionaire owner, Elon Musk, are refusing to pay severance to her and her former colleagues that could total $500 million (AUD$736m), the latest legal battle to hit Musk since he bought the social media company and immediately laid off most of its staff.
Key Takeaways
- Courtney McMillan, who worked at Twitter from August 2020 until January 4, 2023, filed the proposed class action Wednesday in San Francisco federal court, accusing Twitter and Musk of violating federal law by denying them their owed severance.
- As part of a severance plan adopted in 2019, Twitter employees were promised that if they were laid off, they would receive two months of their base pay plus one week of pay for each full year of service if they were laid off, with senior employees like McMillan receiving six months of base pay, according to the lawsuit.
- However, when he took control of the company in October, Musk—whom the lawsuit calls “personally liable”—allegedly decided not to pay the promised severance, instead only giving one month of base pay to some employees.
- The suit calls Twitter’s severance a “fraction of what employees are entitled to” under the company’s severance plan, estimating “the terminated employees are entitled to no less than $500 million.”
- The lawsuit invites anyone who was terminated from Twitter since Musk took over the company to join the legal action.
- When Forbes reached out to Twitter and Musk via email, the Twitter press email automatically responded with a poop emoji. Elegant as always.
Key Background
Musk acquired Twitter in October in a $44 billion deal. Since he took over, Musk has made a series of controversial decisions including changing the verification system to a pay-to-play system and temporarily limiting the amount of tweets users can view in a day.
The billionaire also dramatically slashed the number of employees, citing Twitter’s revenue struggles as the reason for mass layoffs.
Additionally, some employees reportedly left after he gave an ultimatum that the company would adopt a “hardcore” work culture. Musk has laid off around 6,000 Twitter employees since acquiring the company, reducing the company’s workforce from over 7,500 to around 1,300, according to the lawsuit.
Tangent
This lawsuit is not the first legal challenge Twitter has faced since Musk took over. Twitter is already facing multiple lawsuits over severance pay that was allegedly withheld, but, unlike McMillan’s, none of those lawsuits accuse Twitter and Musk of violating a federal law.
They all deal with breach of contract. Twitter has also been sued at least six times for allegedly failing to pay rent on its various office locations, and is being sued by a private jet company over a breach-of-contract dispute.
Forbes Valuation
We estimate Musk’s net worth to be $244.6 billion, making him the richest person in the world. Sounds like he could use a visit from Jacob Marley.
This article was first published on forbes.com and all figures are in USD.
