Judge allows ex-Twitter executives to sue Musk for severance pay
What's the story
A US judge has allowed former Twitter executives, including ex-CEO Parag Agrawal, to continue their lawsuit against Elon Musk for severance pay. The ruling was given on by a California district court judge. The case centers around claims that Musk unfairly dismissed the executives when he acquired Twitter in 2022, denying them their due severance.
Legal action
Agrawal and other ex-Twitter executives join lawsuit
Along with Agrawal, other top executives who have signed on to the lawsuit are ex-CFO Ned Segal, former legal and policy chief Vijaya Gadde, and the company's ex-general counsel Sean Edgett. The complaint was filed in March 2024. The plaintiffs contend that Musk's actions were intended to cheat them out of their severance by firing them before they could resign voluntarily.
Case details
Musk's biography cited in severance pay dispute
The lawsuit references a quote from Musk's biography by Walter Isaacson, where he spoke of a "$200 million differential in the cookie jar between closing tonight and doing it tomorrow morning," in relation to Twitter's $44 billion acquisition. The former executives allege that they are owed severance benefits equal to one year's salary and unvested stock awards at the acquisition price.
Ongoing disputes
Judge Chesney denies Musk's request to dismiss claims
US District Judge Maxine Chesney rejected Musk's lawyers' arguments that Agrawal's claims should be dismissed. The ruling also impacts other pending lawsuits against Musk, including one by Twitter's former core tech general manager Nicholas Caldwell, who is seeking $20 million as lost severance compensation. Chesney denied a request by Musk's lawyers to dismiss Caldwell's claims.
Legal challenges
Musk's legal battles continue post-Twitter acquisition
Since Musk took over Twitter and rebranded the platform as 'X,' he has been hit with multiple legal claims. In July 2024, he defended a lawsuit demanding $500 million in severance pay for around 6,000 laid-off employees. However, in September 2024, an ex-employee won unpaid severance through closed-door arbitration. The decision could pave the way for other similar cases against Musk.