Elon Musk and X Corp. have emerged victorious in one of the many lawsuits stemming from the mass layoffs following Musk’s takeover of Twitter in October 2022, according to a new report from Bloomberg.
A federal judge in San Francisco dismissed a $500 million lawsuit filed by former Twitter employees, who claimed the company violated federal law by shortchanging them on severance pay.
The plaintiffs, including Twitter’s former head of compensation and benefits, argued that about 6,000 laid-off workers were entitled to more substantial severance under the Employee Retirement Income Security Act (ERISA).
U.S. District Judge Trina Thompson ruled that ERISA didn’t apply in this case because X Corp. had clearly communicated to employees post-acquisition that severance would be limited to cash payouts.
This decision could set a precedent for similar pending cases against Musk and X Corp.
The lawsuit alleged that laid-off employees received only one month’s pay as severance, far less than what the plaintiffs believed was owed.
However, Judge Thompson’s ruling suggests that X Corp.’s transparency about its severance policy after Musk’s takeover was a key factor in the decision.
This legal victory for Musk comes amid a flurry of litigation following his controversial $44 billion acquisition of Twitter, now rebranded as X.
The takeover was marked by significant changes, including widespread layoffs that Musk deemed necessary for the company’s financial health.
While this ruling is a win for Musk and X Corp., it’s worth noting that several other lawsuits from former Twitter employees and executives are still pending.
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