Court Dismisses Lawsuit Against Elon Musk

(USNewsBreak.com) – Elon Musk purchased Twitter for $44 billion in 2022 after months of back-and-forth negotiations. Upon taking possession, he immediately laid off approximately 6,000 employees and eventually rebranded the platform to X. The terminated employees sued Musk, saying he owed them $500 million in severance packages. A judge recently dismissed the case — but that’s not the end of the story.

In July 2023, former employee Courtney McMillian sued Musk. Months later, Ronald Cooper, the former workplace operations, facilities, and people manager, joined the suit. Both sought class-action status. The complaint centered on violations of the federal Employee Retirement Income Security Act (ERISA), which dictates minimum payment thresholds.

Elon Musk Defeats $500 Million Lawsuit Over Twitter Mass Layoffshttps://t.co/Yzyyln0XD1

— The Epoch Times (@EpochTimes) July 10, 2024

They claimed Musk paid only a month’s severance when, in reality, they believed he owed them more. McMillian was responsible for overseeing Twitter’s benefits program. They sought over $500 million, which they intended to distribute among the thousands of Twitter employees who lost their jobs when the tech entrepreneur made structural changes to the company.

Judge Trina Thompson said the two incorrectly assumed that Twitter’s severance plan fell under that governance and dismissed the case. Part of Thompson’s decision hinged on the fact that when Musk took over, he notified employees that he would pay them less severance under a new plan he tailored. Lawyers for Cooper and McMillian expressed disappointment over the ruling and said they were “considering [their] options for moving forward.”

However, Thompson’s decision didn’t mean the employees were out of luck. It was a temporary win for Musk, but Judge Thompson gave the defendants three weeks to refile, meaning the Tesla and SpaceX CEO might soon face another forthcoming lawsuit.

Lawsuits from top executives, including former Chief Executive Parag Agrawal, whom Musk dismissed after taking the helm, have mired the new CEO and the company in legal red tape. The former executives have claimed Musk owed them $128 million in severance packages based on the company’s long standing contracts with each. That case is still working its way through the courts.