Elon Musk has won the dismissal of a lawsuit alleging he refused to dole out at least $500 million in severance payments to thousands of employees he fired after buying Twitter in 2022.
The lawsuit, which was filed in U.S. District Court in California in July 2023, claimed that about 6,000 laid off employees were owed severance under provisions in the federal Employee Retirement Income Security Act (ERISA). But U.S. District Judge Trina Thompson ruled Tuesday that the law doesn’t apply to this case and that it is out of her jurisdiction.
The lawsuit is one of several cases filed against Twitter, now renamed X, and Musk by former employees. Several top executives, including former CFO Ned Segal and former CEO Parag Agrawal, sued in March, saying they are owed more than $128 million in severance payments. Former Chief Accounting Officer Robert Kaiden filed a lawsuit last month accusing Musk of failing to pay more than $3.75 million in severance.
The lawsuit thrown out Tuesday was filed by Courtney McMillian, who oversaw compensation and benefits for Twitter, and Ronald Cooper, an operations manager. Twitter’s severance plan was supposed to include, “at minimum,” two months base salary, performance bonuses, and other benefits, according to the complaint.But the plaintiffs said Twitter offered fired employees just one month of pay as severance, with no benefits.
Thompson wrote that ERISA could not apply to this case because there was no “ongoing administrative scheme,” noting that the company told workers that any workers let go would only receive cash payments. The judge said employees fired in Twitter’s mass layoffs in 2022 and 2023 can amend the complaint based on claims that are not covered by ERISA.