Image source, Getty Images
- author, Natalie Sherman
- Role, BBC News
A U.S. judge has dismissed a lawsuit filed by former Twitter employees who accused billionaire Elon Musk of illegally denying nearly $500 million in severance payments owed to workers who were fired after he took over the company.
Judge Trina Thompson said the employees had not shown that their claims were protected under federal law.
The ruling is a victory for Mr Musk, who bought Twitter in 2022 and immediately set about making changes, including firing thousands of employees.
The moves have sparked multiple lawsuits by former employees and vendors, accusing the company of withholding promised payments.
The complaint was filed in 2023 in federal court in San Francisco by Courtney McMillian, the social media site’s former “head of total rewards,” whom Musk renamed X.
In her complaint, she said the company offered employees only one month’s salary as an end-of-service gratuity instead of the more generous benefits, including at least two months’ salary and health insurance contributions, that it had promised.
Mr Musk’s team urged the judge to dismiss the complaint, saying the Employee Retirement Income Security Act does not apply as claimed.
The law sets standards for private health and pension plans.
“We are disappointed with the verdict and are considering our options moving forward,” a spokesperson for Ms McMillian’s team said.
Other cases, including one brought by former company leaders, are still making their way through the courts.
In her ruling, Judge Thompson referred to those disputes, noting that workers may have opportunities elsewhere to prove their claims.
“The court lacks jurisdiction. However, the plaintiffs are not without recourse. In fact, there are other lawsuits against Twitter for failure to pay wages or provide severance packages to employees during the same or overlapping periods,” she wrote.