Twitter owes ex-employees some $500million in severance, a new lawsuit claims – after CEO Elon Musk put roughly 80 percent of the site’s staff on the chopping block since taking over last year.
Courtney McMillian, who oversaw Twitter’s employee benefits programs as its ‘head of total rewards’ before she was laid off, filed the potential class action in San Francisco federal court Wednesday, seeking damages of at least $500million.
McMillian claims that under a severance plan created by Twitter in 2019, most workers were promised two months of their base pay plus one week each full year of service – while senior employees such as herself were owed six months of base pay.
Laid off in one of four rounds of firings following Musk’s $44billion takeover of the company, McMillan now claims several workers received only a month of severance money – while others received nothing.
The lawsuit accuses Twitter and Musk of violating a federal law regulating employee benefit plans. The company – now without an HR department – responded to a Wednesday request for comment with a poop emoji.
Twitter laid off more than half of its workforce as a cost-cutting measure after Musk acquired the company in October.
The company has already been sued for allegedly failing to pay severance, but those cases involve breach of contract claims and not the benefits law being cited by McMillian, who was laid off in January.
The company has maintained it has paid ex-employees in full.
The lawsuit, meanwhile – the latest in a series of legal actions against Twitter following the mass layoffs that occurred after Musk’s acquisition of the company – claims layoffs affected around 6,000 individuals.
Kate Mueting, the lawyer representing McMillian, on Wednesday said Musk – who this week has made headlines after Facebook-owner Meta launched rival service Threads – failed to uphold severance plans set in place before his multibillion-dollar takeover.
‘Musk initially represented to employees that under his leadership Twitter would continue to abide by the severance plan.
‘He apparently made these promises knowing that they were necessary to prevent mass resignations that would have threatened the viability of the merger and the vitality of Twitter itself.’
A pending lawsuit filed last month further accuses Twitter of also failing to pay millions of dollars in bonuses it owes to remaining employees. In that case, Twitter has said the claims lack merit.
The company is also facing a series of other lawsuits stemming from another round layoffs that began last year, including claims that it targeted women and workers with disabilities.
Twitter has denied wrongdoing in the cases in which it has filed responses.
