X Twitter Nears Settlement in $500M Severance Lawsuit

Elon Musk’s X formerly known as Twitter is reportedly close to settling a massive $500 million severance lawsuit. This legal battle stems from claims that the company failed to adequately compensate employees after widespread layoffs following Musk’s acquisition. Let’s dive into the details of this developing situation.

The Heart of the Dispute

After Elon Musk acquired Twitter in 2022 the company laid off about 6,000 employees. Many did not receive the severance they were promised. Former staffers Courtney McMillian and Ronald Cooper then filed a class-action lawsuit seeking up to $500 million. They argued that Twitter’s 2019 severance plan guaranteed two months of base pay plus one week for every year of service. Senior staff could receive up to six months of pay. However many laid-off employees received far less or nothing at all.

In 2024 the court initially dismissed the lawsuit. However the plaintiffs successfully appealed and the court scheduled an appeal hearing. Recently both parties reached a tentative settlement requesting the court to postpone the scheduled September 17 hearing to allow time to finalize the agreement.

The company has not publicly disclosed the financial terms of the settlement.

Broader Legal Context

• This class-action lawsuit is one of several severance-related legal challenges facing X. A separate suit filed by former top executives including ex-CEO Parag Agrawal is still pending. They claim $128 million is owed in unpaid severance.
• Additionally former CMO Leslie Berland pursued her own claim for over $20 million in unpaid severance following her termination shortly after Musk’s acquisition.

A settlement could have significant financial implications for X. While the exact terms are not yet public a $500 million payout would represent a substantial expense. However settling the lawsuit could also prevent further legal costs and reputational damage that might arise from a prolonged court battle. Settling could allow X to move forward and focus on other business priorities without this litigation looming over the company. You can read more about the implications of severance agreements on websites like Nolo.com for a general overview.

The Road Ahead for X

As X navigates this legal challenge, its ability to resolve the severance lawsuit will be closely watched by the tech industry and beyond. The outcome could set a precedent for how other companies handle layoffs and employee compensation in the future. Resolving this issue would be a positive step for X and could improve perceptions of the company’s management practices. To keep up with the latest developments resources like Reuters and Bloomberg often provide real-time updates.