Elon Musk beats $500M severance lawsuit filed by ex-Twitter employees after mass layoffs

A U.S. District Court has dismissed a $500 million severance lawsuit against Elon Musk, ending a legal battle brought by thousands of former Twitter employees.

The Tesla and SpaceX CEO fired the employees during mass layoffs shortly after he bought the social media company now known as X in October 2022 for $44 billion. The employees then filed suit, accusing Musk of refusing to pay them severance.

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According to the complaint obtained by Reuters, the plaintiffs alleged they received just one month of severance with no benefits, rather than the more generous severance plan they had previously been promised in 2019 before Musk bought the company.

California District Court Judge Trina Thompson ruled Tuesday that the federal Employee Retirement Income Security Act, which governs employee benefit plans, did not cover the plaintiffs’ claims and therefore dismissed the suit.

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While the decision marks a legal win for Musk, the case was just one of several lawsuits he faces over business practices at companies he owns. A pending suit filed last year also accuses Musk’s X of failing to pay employees promised bonuses.

The lawsuit was filed by Mark Schobinger, who was the company’s senior director of compensation prior to his exit in May. The suit was filed on behalf of himself and about 2,000 other current and former employees who did not receive their 2022 bonuses.

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