Twitter Severance Plan Class Action
Case type: ERISA
Filed in: U.S. District Court for the Northern District of California
Docket: Case no.: 3:23-cv-03461
On July 12, 2023, Sanford Heisler Sharp filed a class action lawsuit against X Corp. (formerly Twitter), its parent company X Holdings, and owner Elon Musk for failing to provide promised severance benefits owed to terminated employees, and for failing to communicate accurately and truthfully with employees about the severance plan benefits, in violation of the Employee Retirement Income Security Act (ERISA).
The Complaint was filed on behalf of a class of thousands of employees who were subject to the mass layoffs that Mr. Musk initiated shortly after taking over Twitter on October 27, 2022. The terminated employees were denied the promised severance benefits.
Amid widespread skepticism about Mr. Musk’s ability to run Twitter, the Complaint documents numerous instances during the merger process in which Mr. Musk and the defendants gave assurances to employees that the severance plan agreement would be honored. The Complaint alleges that these promises were necessary to prevent mass resignations that would potentially threaten the viability of the merger deal.
The Complaint seeks a court order compelling X Corp. and Mr. Musk to abide by the terms of the Plan; the appointment of independent fiduciaries to monitor the plan; and other forms of monetary relief dating to when Mr. Musk took over Twitter.
- Former Twitter employees claim Elon Musk owes $500 million in severance, Employee Benefit News, July 24, 2023
- Elon Musk’s Twitter owes former employees $500 million in unpaid severance, lawsuit alleges, SFGATE, July 13, 2023
- New lawsuit claims Elon Musk’s Twitter owes more severance to former employees, CNN, July 12, 2023
- Elon Musk, Twitter Slapped with $500 Million Lawsuit Over Ex-Employee Severance Payments, Variety, July 12, 2023
- Elon Musk accused of owing $500m in Twitter severance, BBC, July 12, 2023
- Twitter and Elon Musk Face $500 Million Lawsuit For Allegedly Refusing Severance For Fired Employees, Forbes, July 12, 2023