Lawsuit Alleges Twitter’s Unpaid Severance Obligation to Ex-Employees Amounts to $500 Million

A lawsuit filed on Wednesday alleges that Twitter, following its acquisition by Elon Musk, refused to fulfill its promise of paying at least $500 million in severance to thousands of laid-off employees. Courtney McMillian, who previously served as Twitter’s “head of total rewards” overseeing employee benefits programs, filed the proposed class action in San Francisco federal court.

According to McMillian, Twitter established a severance plan in 2019 which guaranteed most workers two months of their base pay along with an additional week of pay for each full year of service in the event of a layoff. Senior employees, including McMillian, were supposed to receive six months of base pay. However, the lawsuit claims that Twitter only provided a maximum of one month of severance pay to laid-off employees, with many receiving no severance at all.

The layoffs were implemented by Twitter as a cost-cutting measure after Musk’s acquisition of the company in October. Notably, Twitter no longer maintains a media relations department and responded to a Reuters request for comment with a poop emoji.

The lawsuit accuses both Twitter and Musk of violating a federal law that governs employee benefit plans. Although Twitter has previously faced lawsuits alleging failure to pay severance, those cases were based on breach of contract claims rather than violations of the benefits law. Twitter has asserted that it has paid former employees in full.

Additionally, a separate pending lawsuit from last month accuses Twitter of neglecting to pay millions of dollars in owed bonuses to current employees. Twitter has dismissed these claims as lacking merit.

Moreover, Twitter is currently dealing with a series of other lawsuits arising from the layoffs that commenced last year, including allegations of discriminatory practices targeting women and workers with disabilities. Twitter has denied any wrongdoing in the cases for which it has submitted responses.

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