Former Twitter executives sue Elon Musk for severance pay

(CNN) — A group of former Twitter executives sued Elon Musk on Monday to recover more than $128 million in severance payments they say Musk has failed to pay since acquiring the company, now known as X. That said, more than a year ago.

The executives include former Twitter CEO Parag Agarwal, former CFO Ned Segal, former chief legal officer Vijaya Gadde and former general counsel Sean Edgett, all of whom were fired within hours of Musk taking control of Twitter.

The lawsuit alleges that Musk refused to take severance pay as “retaliation” against executives after they were forced to move forward with a $44 billion acquisition deal that he tried to complete. Spent several months.

“Because Musk decided he did not want to pay Plaintiffs’ severance pay, he fired them without reason, then fabricated a false reason and falsified his decision,” the complaint filed in court Monday says. Appointed employees from his various companies to defend the For the Northern District of California. “You stated in your termination letters that each plaintiff committed ‘gross negligence’ and ‘willful misconduct’ without citing a single fact in support of this claim.”

X did not immediately respond to a request for comment.

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Monday’s lawsuit is the latest legal action brought by former Twitter employees related to Musk’s acquisition. A lawsuit filed by a former Twitter human resources leader in July, seeking class-action status, seeks to order Musk and the company to pay additional damages of not less than $500 million, allegedly to former employees. Is. The company has also been accused of not paying annual bonuses to employees fired after Musk’s acquisition.

Agarwal, Gadde, and Segal had previously sued Musk to recover more than $1 million in legal fees they said they were owed; The company was ordered to pay the fees in a Delaware Court of Chancery ruling last year.

Musk and X have also faced lawsuits from suppliers, owners and business partners who claim the company has not paid them what they are owed.

“Musk’s refusal to pay plaintiffs is part of a broader pattern and practice of failing to meet his payment obligations,” the former executives claimed in Monday’s lawsuit.

evidence from a biography

A central theme of Monday’s lawsuit is an anecdote collected in a biography of Musk published by journalist Walter Isaacson last year.

The complaint cites the incident as evidence that Musk deliberately tried to “cheat” former executives out of money owed under contract, including moments before Musk closed the Twitter acquisition in October 2022. Biographical details have been cited.

From left to right, clockwise: Former Twitter executives Vijaya Gadde, Parag Aggarwal, Ned Segal and Sean Edgett, who filed a lawsuit against Elon Musk over severance payments they say they are owed. Andrew Harnick/AP/Kevin Dietsch/Patrick T. Fallon/Martina Albertazzi/Bloomberg/Getty Images/File

In the narrative, Musk reportedly claimed that closing the deal on Thursday, October 27, a day before the scheduled closing, and immediately firing Agarwal and other executives would prevent them from resigning and claiming their severance packages, Due to which the company will save approximately $200 million. , ,

Closing the deal so quickly prompted Agarwal to rush to tender his resignation, but according to the story, it was too late; Agarwal had already been fired and his email access revoked.

The lawsuit alleges that Musk’s apparent strategy to avoid severance obligations violated federal labor laws because the reasons Musk cited for firing Aggarwal and others did not hold up to scrutiny. Let’s come.

“‘Cause’ under compensation plans is limited to extremely narrow circumstances, such as conviction of a felony or ‘gross negligence’ or ‘willful misconduct,'” the lawsuit says. “This is due to Musk making ‘not board-approved’ business decisions before he owned the company that he didn’t like.”

According to the complaint, some executives were told in Musk’s termination letters that the source of their misconduct was a lack of cooperation with the government or an internal Twitter investigation, but the letters did not corroborate those allegations.

The former executives claim they “spent several months trying to obtain severance payments from…

In addition to severance payments, the lawsuit also seeks a court order to force Musk to pay interest on the allegedly unpaid amounts, as well as a fine for Musk’s alleged failure to send plan documents to executives. Is. Legally required benefits attached to your benefits.