Ex-Twitter sextet sues Elon Musk for 'stiffing' them on severance
Seems someone really is living in la-la-la land, but who...
Six ex-Twitter workers are suing the biz in the US for allegedly not paying them their obligatory severance payouts. The sextet also reckons bird site owner Elon Musk never had much intention of paying his bills.
In the suit [PDF], filed earlier this week in a Delaware federal district court, the former employees said Musk's arrival at Twitter came with a flurry of financial chaos because the billionaire favored operating on a "zero cost basis" to make his money.
By that, the lawsuit claims Musk's team would decide each time an expense was due whether or not the company would actually bother to pay it. In the case of the ex-Tweeps named in the suit, some of the bills Twitter decided not to meet its obligation on included their severances after being terminated during the multiple waves of mass layoffs Twitter enacted soon after Musk took over.
"This was severance that Twitter and Musk had – in order to induce Tweeps to stay through the close of the merger – promised would be paid if Musk conducted a layoff, and which Twitter and X Holdings I had bound themselves to pay under the terms of the Merger Agreement," the plaintiffs' lawyers said in the suit. X being Musk's shell company Twitter was folded into.
Additionally, the former employees claim their severance deals were included in their original employment contracts.
"It is clear that neither Musk nor X Holdings ever intended to comply with that obligation. As to employee obligations specifically, Musk proceeded in line with the principle on which he generally operates: that keeping his contractual promises is optional," the lawsuit asserts.
The civil suit levels 14 charges total against Musk and company, including claims of fraud, contract violations, multiple violations of state and federal WARN acts, and breach of its merger agreement.
As well as the row over severance payments, two of the plaintiffs in the case - Tracy Hawkins, Twitter's former VP of real estate and workplace, and Joseph Killian, its former lead project manager for global design and construction – highlighted other various dealings within Twitter in the wake of Musk's acquisition.
Hawkins, whose job responsibilities included handling leases and management of Twitter offices, was told shortly after Musk's acquisition of the biz that she had to identify leases for cancellation. When delivering a report on those leases to Twitter's transitional leadership, which included discussion of risk factors (such as termination fees), she was allegedly told by Boring Company CEO Steve Davis (brought in by Musk to aid with the takeover) that "we just won't pay rent."
"Twitter specifically directed Hawkins to breach its leases, whether by terminating without any good faith justification under the terms of the applicable lease, or by simply stealing from the landlords by intentionally remaining on the premises without any intention of paying amounts Twitter knew and believed were its legal obligation to pay," the lawsuit claimed.
Hawkins quit shortly after, and her responsibilities were transferred to Killian.
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According to Killian's recollection of the days that followed, he was told that every expense would have to be justified, and approved by, Musk. "If Musk was not convinced that the expenses were necessary, he would simply default on his contractual obligations and let the expenses go unpaid," the lawsuit said.
As part of a discussion between Killian and transition leaders about the eviction risks and other legal trouble that could arise from not paying rent, he was allegedly told by Musk lawyer Alex Spiro that the landlords of Twitter's HQ in San Francisco were unreasonable to expect payment because, in Spiro's words, the city was "a shithole."
Speaking of Musk... The billionaire in a TV interview this week slammed those working from home still as an out-of-touch "laptop class ... living in la-la land."
He claimed it was "morally wrong" that some people get the luxury of holing up at home all day on their computers while others, such as car mechanics, cooks, and builders, have to get out to work. Quite a lot to unpack, there.
Killian was later told Twitter would stop paying rent globally, it is claimed, and that Musk had decided Twitter would only pay rent "over his dead body." Killian also alleged in the lawsuit that while working under Musk at Twitter he saw multiple instances of the company "obtain[ing] services from brokers and vendors only to fire [them] when they demanded payment pursuant to their agreements with Twitter."
The final straw for Killian came when he was told to ignore the law and turn parts of Twitter HQ into sleeping space for employees without the necessary permits and official paperwork, it is claimed, and to ignore a requirement in the building's lease to use only licensed tradespeople for those kinds of alterations.
As part of that project, Killian was also told not only to circumvent Twitter HQ's lighting control system in violation of California law, but also to install locks on sleeping room doors that weren't compliant with fire safety codes, it is claimed. California's code requires locks in office spaces to automatically disengage when fire suppression systems are activated, but Twitter allegedly didn't want to spend money on more expensive, compliant hardware.
Shortly later, Killian allegedly quit when he was informed non-compliant locks had been installed in Twitter HQ, he said.
So many lawsuits your eyes'll cross
The juiciest part of this latest lawsuit is the behind-the-scenes look at Twitter 2.0 provided by Hawkins and Killian, which marries up, at least in part, with some of the crazier things that have been reported since Musk bought the website and app.
It is said that Twitter isn't paying its rent at multiple sites including its HQ in San Francisco, and that city authorities had been investigating Musk's plans to turn Twitter HQ into Hotel Twitter as well.
We also know Twitter has been accused of stiffing vendors, and this isn't the first group of Twitter employees to sue over improper termination. Even the company's former CEO Parag Agrawal and other top leaders have taken action against the company, in their case for allegedly not receiving payment as part of prior agreements with their former employer.
There are a lot of unanswered questions still swirling, and facts that could be elucidated by speaking to Twitter, but that's been impossible for some time: as has been the case since Musk declared it in March, Twitter only responded to our inquiries with a poop emoji. ®
What timing. After this lawsuit landed accusing Twitter of dodging its bills, the website reportedly wrote to Microsoft claiming:
- The Windows giant had an agreement with Twitter over the use of the social network's data, and that Microsoft broke the terms of that deal.
- Microsoft had declined to pay for that usage.
- The IT goliath had used more data from Twitter than it was supposed to at times.
- Some of the slurped data was given to government agencies without permission by Microsoft.