Elon Musk has won the dismissal of a lawsuit alleging he refused to pay at least $500 million in severance to thousands of Twitter employees he laid off after acquiring The social media firm, now operating under the name X, saw U.S. District Judge Trina Thompson in San Francisco rule on Tuesday that the federal Employee Retirement Income Security Act (ERISA), which governs benefit plans, did not cover the former employees’ claims, leaving her without jurisdiction.
This lawsuit is one of several accusing Musk of reneging on promises to former Twitter employees, including ex-CEO Parag Agrawal, and vendors following his $44 billion purchase of the company in October 2022.
According to the complaint, Twitter’s severance plan promised employees who remained after the buyout two to six months of pay plus one week of pay for each year of employment if they were laid off. Plaintiffs Courtney McMillian, who oversaw Twitter’s compensation and benefits, and Ronald Cooper, an operations manager, claimed that Twitter instead offered just one month of pay as severance without benefits.
Judge Thompson ruled that ERISA did not apply to Twitter’s post-buyout plan because there was no “ongoing administrative scheme” involving case-by-case claim reviews or benefits such as continued health insurance and outplacement services. She noted that only cash payments were promised. The judge allowed that employees fired in Twitter’s 2022 and 2023 mass layoffs could amend their complaint, but only for claims not governed by ERISA.
