Laid-Off Employees File ERISA Suit Against Twitter for Failure to Pay $500 Million in Severance

A group of former Twitter employees laid off after Elon Musk took over the company recently filed a proposed class action lawsuit in a California federal court. The former employees allege that Twitter failed to pay laid-off employees more than $500 million in severance according to the company’s ERISA-governed severance plan, which Musk promised would remain in effect.

The Twitter severance plan provided severance in the form of two to six months of base pay, additional weeks of pay based on years of service, bonuses, cash contributions for health insurance, and three to six months of outplacement services, depending on the employee’s position and years of service. Instead, former workers received one month of severance pay at most, and many received no severance.

Musk took control of Twitter in October 2022, dismissing the company’s executive leadership and board. He then launched four expansive rounds of employee layoffs. The former workers allege that they received no notifications that Musk intended to change the terms of the company severance plan and failed to receive the benefits guaranteed to them under the plan.

Twitter has already faced many other lawsuits related to Musk’s mass layoffs. Some former employees previously sued the company for failure to pay them severance. However, those suits are breach of contract claims, not claims grounded in benefits law. Other former employees sued Twitter for failing to pay them millions in bonuses. Finally, some former workers have accused Twitter of targeting them for layoffs based on illegal sex and disability discrimination. Twitter has denied all wrongdoing in those cases in which it has responded so far.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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