Elon Musk doesn’t owe ex-Twitter employees $500 million in severance, the court rules

In a win for Elon Musk, a judge dismissed a lawsuit claiming that the billionaire owed former Twitter employees upwards of $500 million in severance after buying the social media company and gutting its staff. 

The lawsuit, filed by former employees, alleged that Twitter paid laid-off employees less severance than they were contractually promised, citing protections under the federal Employee Retirement Income Security Act (ERISA). 

U.S. District Judge Trina Thompson dismissed the class action suit in San Francisco on Tuesday, arguing that the claims weren’t covered under ERISA, and therefore she lacked jurisdiction.

The plaintiffs argued that the company’s 2019 severance plan promised workers two months of their base pay plus one week of pay for each full year of service if they were laid off. Senior employees, meanwhile, were owed upwards of six months of base pay, according to the lawsuit. However, plaintiffs claimed that Twitter only gave the laid-off workers just one month of pay, with no benefits.

To be sure, Musk is still facing legal trouble. The case is one among a series of others accusing the world’s richest man of walking back promises to former employees and vendors after buying the company in October 2022.

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