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Elon Musk escapes paying $500 million to former Twitter employees

They could still amend and refile their complaint.

Reuters / Reuters

The social media platform formerly known as Twitter has been at the center of multiple legal battles from the very beginning of Elon Musk's takeover. One such suit relates to the more than 6,000 employees laid off by Musk following his acquisition of the company – and his alleged failure to pay them their full severance. Yesterday, Musk notched a win over his former employees.

The case in question is a class-action lawsuit filed by former Twitter employee Courtney McMillian. The complaint argued that under the federal Employee Retirement Income Security Act (ERISA), the Twitter Severance Plan owed laid off workers three months of pay. They received less than that, and sought $500 million in unpaid severance. However, on Tuesday, US District Judge Trina Thompson in the Northern District of California granted Musk's motion to dismiss the class-action complaint.

Judge Thompson found that the Twitter severance plan did not qualify under ERISA because they received notice of a separate payout scheme prior to the layoffs. Instead, she dismissed the case, ruling that the severance program adopted after Musk's takeover was the one that applied to these former employees, rather than the 2019 one the plaintiffs were expecting.

This ruling is a setback for the thousands of dismissed Twitter staffers, but there are future chances for them to win larger payments. Thompson's order noted that the plaintiffs could amend their complaint for non-ERISA claims. If they do, Thompson said "this Court will consider issuing an Order finding this case related to one of the cases currently pending" against X Corp/Twitter. There are still lawsuits underway on behalf of some past top brass at Twitter, one which is seeking $128 million in unpaid severance and another attempting to recoup about $1 million in unpaid legal fees.

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