Twitter hit with lawsuit claiming ex-employees owed at least $500M in severance pay
Suit says Twitter violated federal employment law by not paying out severance under prior policies
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A lawsuit filed Wednesday says Twitter owes at least half a billion dollars in severance pay to the thousands of employees who were laid off when the investor group led by Elon Musk acquired the company last year.
The lawsuit was filed by Courtney McMillian, who oversaw Twitter’s employee benefits programs as its "head of total rewards" before she was let go in January. The proposed class-action lawsuit was filed in a San Francisco-based federal court and seeks at least $500 million in damages.
McMillian alleges that a severance plan created by Twitter in 2019 pledged that workers who were laid off would receive two months of their base salary plus one week of pay for each full year of service at the social media platform. The lawsuit further claims that senior employees like McMillian were owed six months of base pay.
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Twitter is facing a lawsuit that says the company owes at least $500 million in severance to ex-employees. (AP Photo / Jeff Chiu / File / AP Newsroom)
According to the lawsuit’s allegations, Twitter only gave laid-off workers a maximum of one month in severance pay and many received nothing amid the layoffs that followed Musk’s takeover.
The suit accuses the company of violating a federal law that regulates employee benefit plans – a distinction from another lawsuit in which Twitter was sued over claims it’s in breach of contract over severance payments.
Twitter has pushed back on those claims, countering that it paid its ex-employees in full.
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Billionaire Elon Musk said Twitter was losing about $4 million per day at the time of the takeover and that mass layoffs were necessary to stave off bankruptcy. (Twitter account of Elon Musk / AFP via Getty Images / File / Getty Images)
Shortly after the Musk-led investor group completed its purchase of Twitter, about half of the company’s 7,500-person workforce was hit with layoffs.
Musk said the cuts were necessary to stave off bankruptcy because the company was losing about $4 million per day.
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Twitter is also facing a lawsuit filed by employees who say the company owes tens of millions of dollars in unpaid bonuses, as well as another suit that says Twitter discriminated against women and workers with disabilities.
Twitter has denied wrongdoing in the cases in which it has filed responses.
Reuters contributed to this report.