A U.S. judge has dismissed a lawsuit filed by former Twitter employees, who accused billionaire Elon Musk of unlawfully withholding approximately $500 million in severance payments following his acquisition of the company.
Judge Trina Thompson ruled that the employees failed to demonstrate that their claims were protected under federal law. This decision marks a significant victory for Musk, who purchased Twitter in 2022 and quickly initiated major changes, including terminating thousands of employees.
The mass layoffs triggered lawsuits from former staff and vendors, alleging the company had reneged on promised payments. The dismissed complaint, filed in 2023 in a San Francisco federal court by Courtney McMillian, former “head of total rewards” at the social media platform—now renamed X—claimed that the company provided only one month’s severance pay instead of the more generous package of at least two months’ salary and health insurance contributions that had been promised.
Musk’s legal team argued for the complaint’s dismissal, stating that the Employee Retirement Income Security Act (ERISA) did not apply as the plaintiffs contended. ERISA sets standards for private health and pension plans.
“We are disappointed in the ruling and considering our options for moving forward,” a spokesperson for McMillian’s team said.
Other lawsuits, including one from former company executives, are still progressing through the courts. In her decision, Judge Thompson acknowledged these ongoing disputes, indicating that the plaintiffs might find opportunities to pursue their claims in other legal avenues.
“The Court lacks jurisdiction. However, plaintiffs are not without recourse. Indeed, there are other cases brought against Twitter for the failure to pay wages or provide employee severance benefits during the same or overlapping period,” she wrote.
