Elon Musk's X Corp. Dodges $500M Severance Payout in Twitter Layoff Lawsuit

Elon Musk's X Corp. Dodges $500M Severance Payout in Twitter Layoff Lawsuit

Elon Musk and X Corp., formerly known as Twitter, have successfully defended against a $500 million severance lawsuit filed by ex-Twitter employees. The lawsuit, led by former head of total rewards Courtney McMillian and another ex-manager, alleged that the company owed severance pay to approximately 6,000 laid-off employees under the federal Employee Retirement Income Security Act (ERISA). However, a U.S. District Judge in San Francisco ruled that the claims were not covered under ERISA, as the company had informed employees post-takeover that they would only receive cash payouts.

Despite this ruling, several similar cases are still ongoing. The plaintiffs argued that Musk and X Corp. did not adequately inform staff about severance plans and did not adhere to the pre-existing severance plan. The judge found that the company had communicated the termination of the old plan and the implementation of Musk's cash-only severance option. This ruling marks a significant win for Musk and X Corp., although the broader legal battles over severance pay continue.

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