Elon Musk has defended against a lawsuit demanding $500 million in severance pay from former Twitter employees. A U.S. District Judge, Trina Thompson, dismissed the case on Tuesday. The judge ruled that the claims did not fall under the federal Employee Retirement Income Security Act (ERISA). This decision means the court lacks jurisdiction over the matter.
The lawsuit, filed by Courtney McMillian and Ronald Cooper, argued that Twitter had promised more generous severance packages than what was delivered. After Musk acquired Twitter in October 2022, thousands of employees were laid off, receiving only one month of severance pay instead of the promised two to six months plus additional benefits.
Judge Thompson noted that ERISA did not apply because the severance plan did not include ongoing administrative schemes or additional benefits like health insurance. She left the door open for the plaintiffs to amend their complaint to pursue claims not governed by ERISA.
This ruling is one of several legal battles Musk faces following his $44 billion acquisition of Twitter. Multiple lawsuits from former staff and vendors allege that Musk and his team have fallen back on various promises and agreements. However, dismissing this case is a significant win for Musk and his company, now rebranded as X.
A spokesperson for the plaintiffs expressed disappointment with the ruling and indicated they are considering further legal options. Meanwhile, other related lawsuits continue to move through the courts, potentially providing alternative avenues for the former employees to seek redress.
The case is McMillian et al. v Musk et al, U.S. District Court, Northern District of California, number 23-03461.
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