Former Twitter Executives Sue Elon Musk Over Unpaid Severance

A group of former Twitter executives has initiated legal action against Elon Musk, aiming to reclaim over $128 million in severance payments they assert have been unjustly withheld since Musk's acquisition of the social media platform

by Faruk Imamovic
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Former Twitter Executives Sue Elon Musk Over Unpaid Severance
© Getty Images/Michael M. Santiago

A group of former Twitter executives has initiated legal action against Elon Musk, aiming to reclaim over $128 million in severance payments they assert have been unjustly withheld since Musk's acquisition of the social media platform, now rebranded as X, over a year ago.

The plaintiffs in this case include high-profile names such as Parag Agrawal, the former CEO, Ned Segal, the former CFO, Vijaya Gadde, the former Chief Legal Officer, and Sean Edgett, the former General Counsel, all of whom were terminated mere hours following Musk's takeover.

The lawsuit posits that Musk's refusal to disburse the severance payments is an act of "revenge" following his compelled completion of the $44 billion purchase of Twitter—a deal Musk had notoriously sought to escape.

The complaint elaborates, "Because Musk decided he didn’t want to pay Plaintiffs’ severance benefits, he simply fired them without reason, then made up fake cause and appointed employees of his various companies to uphold his decision."

Wider Legal Challenges and Musk's Payment Obligations

This legal challenge is not isolated, as it joins a series of lawsuits filed by former Twitter employees since Musk's acquisition.

These suits range from demands for additional severance benefits to allegations of unpaid annual bonuses, collectively amounting to claims of over $500 million. The lawsuit also mentions Musk and X's legal entanglements with vendors, landlords, and business partners over unpaid dues, suggesting a pattern of non-compliance with payment obligations.

A notable aspect of the lawsuit centers on an anecdote from a biography of Musk by journalist Walter Isaacson. The anecdote is cited as evidence of Musk's deliberate attempt to circumvent severance obligations, highlighting a rushed deal closure that preempted the executives' resignations, thereby saving an estimated $200 million in severance payments.

This maneuver, according to the lawsuit, contravened federal labor laws by fabricating causes for termination that do not hold up under legal scrutiny.

Seeking Justice Through Legal Means

The former executives allege extensive efforts to secure their severance prior to resorting to legal action, accusing the company and its leadership of obstructing their attempts to present their claims.

The lawsuit not only seeks the overdue severance payments but also demands interest on the unpaid amounts and penalties for Musk's alleged failure to provide legally required documents associated with their benefits.

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