Another case against Twitter for owing former employees $500M in severance pay is pending.
Twitter is once again finding itself in legal trouble as former employees claim that the platform has failed to meet its commitment of paying over $500 million in severance to thousands of employees who were laid off after Elon Musk acquired the company.
The lawsuit, filed as a proposed class action in a San Francisco federal court, was initiated by Courtney McMillian, who previously served as Twitter's "head of total rewards" overseeing employee benefits programs before being laid off in January.
According to McMillian, Twitter introduced a severance plan in 2019 that outlined specific compensation for laid-off workers. The plan promised most employees two months of their base pay, with an additional week of pay for each full year of service. Senior employees like McMillian were entitled to six months of base pay.
The lawsuit alleges that Twitter provided a maximum of only one month of severance pay to the laid-off workers, and some received no compensation at all. This legal action claims that both the company and Elon Musk violated a federal law governing employee benefit plans. Previous lawsuits against Twitter regarding severance payments were based on breach of contract claims rather than violations of the benefits law.
Twitter, however, has stated that it has fully paid severance to former employees. It's worth noting that the social media company no longer maintains a media relations department and responded to a request for comment with a no response.
This year, Twitter has faced several other lawsuits. After Musk's acquisition in October 2022, the company implemented cost-cutting measures that resulted in laying off more than half of its workforce. Since then, Twitter has been plagued by platform glitches and has been indecisive in its product actions. Additionally, it has been sued multiple times for alleged failure to pay bills, including rent, and by former employees seeking severance and back pay.
A lawsuit was filed by employees against Twitter, alleging breach of contract and promissory estoppel, claiming the company failed to fulfill its 2022 bonuses promise. The lawsuit claims the company failed to pay 50% of target amounts.
In another recent lawsuit, 17 music publishers sued Twitter for copyright infringement on approximately 1,700 songs, seeking damages of up to $250 million. Additionally, since Musk's takeover, the company has faced various lawsuits from office landlords for unpaid rent. Furthermore, its U.S. advertising revenue experienced a significant decline of 59% compared to the previous year.
Twitter is currently entangled in multiple lawsuits stemming from layoffs initiated in the previous year. These legal actions include allegations that the company unfairly targeted women and employees with disabilities during the layoff process. Twitter has denied these accusations and asserted its innocence in the cases, having submitted formal responses.
The outcome of these lawsuits carries significant implications for Twitter, as they will determine whether the company violated employee benefits laws. If found guilty, Twitter may face severe financial consequences for its actions
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