Former head of HR at Twitter, Courtney McMillan, has filed a proposed class action lawsuit against the company, seeking $500 million in damages from Elon Musk. McMillan alleges that Twitter failed to pay severance fees to laid-off employees. According to the lawsuit, McMillan, who was let go in January, stated that Twitter’s former CEO, Parag Agrawal, had assured employees that they would receive their paid severance as outlined in the Merger Agreement.
The lawsuit claims that Agrawal and then-Chairman Bret Taylor informed employees on the day of the acquisition by Musk that Twitter would continue to provide severance benefits for at least one year after the change in ownership. The lawsuit further alleges that Musk, prior to assuming his role as owner and CEO, approved an FAQ document affirming that employees impacted by layoffs would be eligible for severance.
The document reportedly specified that the minimum severance package would include two months of base salary, prorated performance bonuses, the cash value of any RSUs vesting within three months of separation, and a cash contribution for continued healthcare coverage.
After Musk took over in October 2022, several mass layoffs occurred, with thousands of employees being let go. However, the lawsuit claims that only a fraction of those entitled to severance received their full benefits. Many former employees received only one month’s severance, and some didn’t receive any at all, according to the lawsuit.
The lawsuit highlights that terminated senior employees were entitled to six months’ base pay plus an additional week per year of service, while non-senior employees were entitled to two months of severance pay plus an additional week per year.
McMillan alleges that Twitter intentionally misled employees regarding their entitlement to severance and eligibility, despite the FAQ confirming the merger agreement. The lawsuit asserts that Musk and the defendants had no intention of fulfilling these promises.
This lawsuit adds to a growing number of legal actions against Twitter. Another class action lawsuit has been filed by third-party companies, accusing Twitter of failing to pay for their services. Additionally, separate lawsuits claim that women and workers with disabilities were targeted during the mass layoffs, and that Twitter withheld millions of dollars in employee bonuses.
