Elon Musk Triumphs in $500M Severance Lawsuit

Elon Musk successfully dismissed a lawsuit accusing him of withholding $500M in severance from ex-Twitter employees after his acquisition of the social media firm. U.S. Judge Trina Thompson ruled against the claims citing non-coverage under federal ERISA. The case is one among many against Musk regarding his promises to ex-Twitter staff.

Elon Musk secured a legal victory by dismissing a lawsuit that alleged he refused to pay at least $500 million in severance to thousands of Twitter employees laid off following his acquisition of the social media platform, now rebranded as X.

U.S. District Judge Trina Thompson in San Francisco ruled on Tuesday that the federal Employee Retirement Income Security Act (ERISA), which governs benefit plans, did not cover the former employees' claims, thereby lacking jurisdiction. Neither the plaintiffs' nor Musk's lawyers commented immediately.

This lawsuit is one of several accusing Musk of failing to honor commitments to former Twitter employees, including ex-CEO Parag Agrawal, after acquiring the company for $44 billion in October 2022. According to the complaint, Twitter employees under the 2019 severance plan were entitled to more than what they received post-buyout. The judge noted that ERISA did not apply as the severance plan involved only cash payments without ongoing administrative schemes or additional benefits. Plaintiffs may amend their claims not governed by ERISA. The case is officially known as McMillian et al v. Musk et al, U.S. District Court, Northern District of California, No. 23-03461.

(With inputs from agencies.)