Twitter Owes Former Staff $500m, Lawsuit Claims

Lawsuit from Twitter’s head of employee benefits alleges Elon Musk platform owes sacked staff $500m in severance payments

A former Twitter executive has alleged that Twitter has seriously short-changed staff members fired by Elon Musk since his takeover.

The Guardian newspaper reported that a new proposed class action lawsuit has been filed in a San Francisco federal court against Twitter by its former head of employee benefits, Courtney McMillian.

McMillian in the lawsuit alleges that Twitter owes ex-employees $500m in severance, after Elon Musk fired 80 percent of its staff since he took control of the firm last October.

Image credit: Elon Musk

Staff compensation

This is not the first time that Elon Musk and Twitter have been accused of failing to pay fired staff their agreed settlement figures.

But according to Courtney McMillian, who oversaw Twitter’s employee benefits programs as its “head of total rewards” before she was laid off in January, under a severance plan created by Twitter in 2019, most workers were promised two months of their base pay plus one week of pay for each full year of service if they were laid off.

Senior employees (such as McMillian) were owed six months of base pay, according to the lawsuit, the Guardian reported.

But Twitter only gave laid-off workers at most one month of severance pay, and many of them did not receive anything, McMillian alleged.

The lawsuit furthermore accuses Twitter and Musk of violating a federal law regulating employee benefit plans.

Other lawsuits

Twitter has already been sued a number of times for allegedly failing to pay severance payments, but those cases involve breach of contract claims and not the benefits law.

According to the Guardian, Twitter has said it has paid ex-employees in full.

Last month a pending lawsuit was filed that accused Twitter of failing to pay millions of dollars in bonuses it owes to remaining employees.

Twitter has reportedly said the claims lack merit.

The Elon Musk company is also facing a slew of other lawsuits stemming from the layoffs that began last year, including claims that Twitter targeted women and workers with disabilities.

Twitter is currently facing numerous lawsuits from contractors seeking payments for outstanding bills.

Twitter has denied wrongdoing in the cases in which it has filed responses, the Guardian reported.

In April Twitter’s former chief executive Parag Agrawal and two other former executives sued Twitter over more than $1 million (£800,000) in legal bills they say should have been reimbursed.

One of the latest lawsuit against Twitter comes from an Australian project management firm, Sydney-based Facilitate Corp, which last month filed a lawsuit against Twitter in a US court seeking total payments of about A$1 million ($665,000) over alleged non-payment of bills for work done in four countries.