A former human resources executive at Twitter has made allegations that the company failed to pay around $500 million in severance to former employees. Courtney McMillian, previously the “head of total rewards” at Twitter before the layoff, made these claims as part of a class-action lawsuit. The lawsuit asserts that Twitter owner Elon Musk was aware of the severance policy before terminating thousands of employees but hesitated due to the associated costs.
Twitter Lawsuit Follows Extensive Layoffs After Musk’s Acquisition
Twitter faces one of several legal actions filed against it following the significant layoffs that occurred after Elon Musk acquired the company for $44 billion last year. The lawsuit alleges that the layoffs affected approximately 6,000 individuals.
Severance Policy and Underpaid Amounts
Twitter’s severance policy entitled junior employees to receive at least two months of base salary as severance pay, along with a cash contribution towards health insurance and other benefits. However, the complaint filed in federal court in San Francisco reveals that McMillian and other individuals in more senior positions were owed six months of base salary in severance pay, plus an additional week for each full year of experience. Terminated staff like McMillian received a maximum of three months of pay, which included one month of severance and an additional two months of pay to comply with US law regarding layoffs.
Accusations Against Musk and Deception of Employees
In November, Musk had stated that employees would receive three months’ worth of pay, claiming it was “50 percent more than legally required.” The complaint accuses Musk of deceiving employees regarding the company’s commitment to honoring the severance plan, causing some individuals to remain at the company longer than they would have otherwise. Attorney Kate Mueting, representing McMillian, stated that Musk’s assurances were crucial in preventing mass resignations that could have jeopardized the merger’s viability and the vitality of Twitter itself.
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