OAN’s Abril Elfi
5:02 PM – Wednesday, July 10, 2024
On Wednesday, a U.S. court dismissed a lawsuit that alleged X-owner Elon Musk withheld at least $500 million in severance pay from thousands of former Twitter employees in a wave of mass layoffs following his acquisition of the social media platform that is now known as “X.”
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On Tuesday, San Francisco U.S. District Judge Trina Thompson rendered a decision where she stated that she lacked jurisdiction since the claims made by the former employees were not covered by the federal Employee Retirement Income Security Act (ERISA), which regulates benefit plans.
For Musk, the ruling represents a legal win. The lawsuit included accusations of defamation and gender discrimination, to taking part in retaliatory firings.
Musk, who claimed to have fired roughly 80% of Twitter employees in the months following his takeover, was ultimately accused of neglecting to provide appropriate severance pay to employees.
The plaintiffs claimed that instead of the significantly larger package that they “were entitled to as part of a 2019 severance plan,” the staffers were given only one month’s worth of severance pay with no benefits.
According to Thompson, ERISA was not eligible for Twitter’s post-buyout plan because there was no “ongoing administrative scheme” under which the business evaluated claims individually or provided benefits like ongoing health insurance and job placement assistance.
“There were only cash payments promised,” she wrote.
The judge also noted that the plaintiffs could try amending their complaint, but only for claims not governed by ERISA.
The case is one of many that have accused Musk of backing out on promises to former Twitter employees and vendors after he bought the company back in October 2022.
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