The US choose mentioned the federal legislation governing profit plans didn’t cowl the previous staff’ claims.
Elon Musk has received dismissal of a lawsuit claiming he refused to pay at the very least $500m of severance to hundreds of Twitter staff he fired in mass layoffs after shopping for the social media firm now often called X.
United States District Choose Trina Thompson in San Francisco, California dominated on Tuesday that the federal Worker Retirement Earnings Safety Act (ERISA) governing profit plans didn’t cowl the previous staff’ claims, and due to this fact she lacked jurisdiction.
The case is certainly one of many accusing Musk of reneging on guarantees to former Twitter staff, including former Chief Executive Parag Agrawal, and distributors after shopping for the corporate for $44bn in October 2022.
Musk additionally runs the electrical automotive firm Tesla, and is the world’s richest particular person, in accordance with Forbes journal.
An out of doors spokeswoman for Sanford Heisler Sharp, which represents the previous staff, mentioned the legislation agency was upset and contemplating its authorized choices. Attorneys for Musk and X didn’t instantly reply to requests for remark from Reuters information company.
In line with the criticism, Twitter’s severance plan referred to as for workers who stayed on after the buyout to obtain two or six months of pay, plus one week of pay for annually of employment, in the event that they had been laid off.
The plaintiffs Courtney McMillian, who oversaw Twitter’s compensation and advantages, and Ronald Cooper, an operations supervisor, mentioned Twitter as a substitute supplied fired staff only one month of pay as severance, with no advantages.
Thompson mentioned ERISA didn’t apply to Twitter’s post-buyout plan as a result of there was no “ongoing administrative scheme” the place the corporate reviewed claims case-by-case, or supplied advantages resembling continued medical insurance and out placement companies.
“There have been solely money funds promised,” she wrote.
The choose mentioned staff fired in Twitter’s 2022 and 2023 mass layoffs can strive amending their criticism, however just for claims not ruled by ERISA.
The case is McMillian et al v Musk et al, US District Court docket, Northern District of California, quantity 23-03461.
