Twitter, owned by tech mogul Elon Musk, is facing a class-action lawsuit from Courtney McMillian, its former “head of total rewards.” McMillian is seeking a hefty $500 million in unpaid severance. The complaint claims that Musk was aware of the severance plan, but opted not to honor it because of the associated expenses.
This lawsuit is simply the latest in a series of legal battles which have arisen following Musk’s high-profile $44 billion acquisition of the company the previous year. The suit alleges that the mass layoffs – which affected an estimated 6,000 employees – breached the severance plan, which provided for a minimum of two months’ base salary, cash contributions toward health insurance and other benefits. Higher ranking employees, such as McMillian, should have received up to six months’ base salary in severance, plus an additional week for each year of service.
The lawsuit filed against tech mogul Elon Musk and Twitter alleges that after employee terminations, employees received payment substantially below the legal requirement- only three months’ pay, including a reduced severance package and two months’ worth of pay. This payment of approximately $500 million fell substantially short of the amount designated by Musk, contrary to his statement that employees would receive at least 50% more than the legal minimum. Twitter, which no longer has a public relations department, refused to comment on the issue. This prompted a wave of shockwaves across the workforce, as many employees questioned whether the severance package announced by Musk would be honored. As a result, some employees remained at the company longer than previously expected.
Kate Mueting, the attorney for McMillian, claims that Musk’s assurances were essential in preventing many resignations that may have threatened the success of the merger and the general stability of Twitter.
Whether Twitter and its owner, Elon Musk, will be held responsible for the alleged underpaid severance and other misrepresentations made to employees during the mass layoffs will depend on how the lawsuit plays out.
