Elon Musk Wins Twitter Layoff Lawsuit, Dodging $500 Million Payout

Twitter/X owner Elon Musk has won a lawsuit fired Twitter employee Courtney McMillian brought against Musk and the company last year.

The suit alleged that 6,000 fired Twitter staff were owed $500 million or more in collective severance pay. The judge dismissed the lawsuit Tuesday, writing that the claims, made under US ERISA law, did not apply to the case. Therefore, no such payments were applicable. ERISA, or the Employee Retirement Income Security Act, is a federal law that sets minimum requirements for health and retirement plans.

McMillian, who previously oversaw Twitter’s employee benefits programs as its Head of People Experience, had claimed that Musk and X didn’t adequately inform staff about their severance plan changes and didn’t adhere to the severance plan set up before Musk bought Twitter. McMillian and other laid-off staff reportedly only received one month’s severance pay before being forced out in November 2022 after Musk’s takeover.

The judge, however, concluded that X did tell fired staff that the old plan was dead and Musk’s cash-only severance plan was the only one applicable.

“After the takeover or merger, there were only cash payments promised. There were no promises to continue healthcare benefits or outplacement services provided by a third-party,” the judge’s decision states.

McMillian can still file another, amended suit against Musk if she believes a breach of contract or other violation has occurred, but won’t be able to use the ERISA law to back it up, the judge said. An amended filing could tie this lawsuit to one of three other pending cases from other laid-off Twitter employees, who are also suing Musk and X for similar reasons.

Musk and his companies face a range of lawsuits, but the Tesla CEO may be about to get a massive $56 billion pay package. If finalized, the compensation would make Musk the highest-paid person in US history.