Elon Musk faced a significant setback in his legal battle regarding the dismissal of Twitter Inc.'s top executives after he took control of the company in 2022.
On Friday, a judge ruled that former CEO Parag Agrawal and other senior executives can move forward with their claims that Musk terminated their employment just as he was finalizing the deal, intending to deny them severance pay before they had a chance to submit their resignation letters.
In the lawsuit filed by the former executives in March, they referenced a section from Walter Isaacson’s biography of Musk, where the billionaire is quoted as saying, while hurriedly completing the acquisition, that there was a “$200 million differential in the cookie jar between closing tonight and doing it tomorrow morning.”
Musk has been contesting legal claims for unpaid wages from thousands of Twitter employees who were laid off following his $44 billion acquisition of the social media platform, which he later rebranded as X Corp.
In September, at least one former employee won a case for unpaid severance in a private arbitration, a ruling that could set a precedent for other similar claims, according to the worker’s attorney speaking to Bloomberg News.
In July, Musk and X Corp. successfully defended against a lawsuit that claimed approximately $500 million in severance pay was owed to around 6,000 employees who were laid off, citing provisions of the federal Employee Retirement Income Security Act.
On Friday, U.S. District Judge Maxine Chesney dismissed the arguments presented by Musk’s attorneys that sought to have Agrawal’s claims thrown out. Agrawal was joined in the lawsuit by Vijaya Gadde, the former head of legal and policy at Twitter; Ned Segal, the former chief financial officer; and Sean Edgett, the former general counsel of the company.
They claim they are entitled to severance benefits equivalent to one year’s salary along with unvested stock awards valued at the acquisition price.
Judge Chesney is also overseeing two additional lawsuits filed by Twitter executives, including one from Nicholas Caldwell, the former general manager for “core tech,” who is seeking $20 million in compensation for lost severance. On Friday, the judge denied Musk's motion to dismiss Caldwell's claim, which reflects the allegations made by Agrawal.
Representatives from X did not respond immediately to a request for comment outside of regular business hours.
No comments:
Post a Comment