Ex-Twitter employees owed half a billion in severance, says lawsuit
There are only 1,300 souls left from 7,500 before Musk, complaint claims
Former Twitter employee Courtney McMillian has filed a complaint claiming the company owes $500 million in severance pay to the thousands of people that were chopped from its once 7,500-strong workforce.
The lawsuit also claims that only a touch over 1,000 people are left working at Twitter 2.0, just as the billionaire is launching his new xAI biz with newly installed CEO Linda Yaccarino now running the show. The legal filing claims: "Upon information and belief, Twitter has terminated approximately 6,000 employees since Mr. Musk's takeover, reducing the Company's workforce from over 7,500 to around 1,300."
The complaint [PDF], a proposed class action that was filed in a California district court, alleges that not only did Twitter 2.0 unlawfully deny severance benefits, but that Musk himself confirmed that severance benefits would be no less favorable for workers than pre-merger benefits for a year after the deal closed, with the idea that this would prevent "skeptical" staffers from resigning en masse.
The suit states:
Given the widespread skepticism of Mr. Musk's ability to operate Twitter successfully and the tightening of the tech labor market overall at the time, the parties to the Merger Agreement – Mr. Musk and the incoming leadership, as well as Twitter's outgoing management – knew that promising continued Plan benefits was necessary to prevent mass resignations that would threaten the viability of the merger deal and, potentially, of the company itself.
The suit claims the promise was made both pre and post-merger, latterly as part of the April 2022 merger agreement, by way of a document which is attached to the lawsuit as an appendix [PDF]. The document begins with a legal disclaimer that the agreement is confidential, attorney-client privileged, and for "initial planning purposes only" as well as "subject to Twitter's decision making governance procedures."
Under the plan, claims the lawsuit, for senior employees like McMillian the base severance would be "six months' base pay plus one week for each full year of service. Less senior employees are entitled to two months' base pay plus one week for each full year of service."
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McMillian, leading the suit, used to look after Twitter's employee benefits programs.
The complaint claims Twitter offered the terminated employees "at most" three months of compensation; two months to comply with the notice requirements of the WARN Act, and then one month of severance pay and cited public reporting indicating that some laid-off employees "have yet to receive anything." However, it goes on to claim, "three months' severance is a fraction of what employees are entitled to as Plan participants."
The suit isn't the only move by former workers to protest Twitter's actions during their layoffs. Earlier this month, a former worker who claimed he was laid off last year for not clicking yes on Elon Musk's "go hardcore or go home" email, accused the company of holding up 891 arbitrations to save money.
Over in the UK, ex-Twitter Brits launched a legal challenge against their dismissal earlier this year. They allege that during the collective consultation redundancy process, Twitter has not been conforming to British law. The proper way to go about it includes involving staff and their representatives in the process, but the ex-staffers claim decisions about their employment had already been made beforehand, after which they claim there was a "retrospective attempt" to apply the process. ®