Twitter in a soup for violating severance plan

Twitter, a social media company, is facing a lawsuit after allegedly failing to provide promised severance payments to thousands of employees laid off following Elon Musk’s acquisition. The lawsuit, filed by Courtney McMillian, former Twitter employee, accuses the company of violating its own severance plan by not offering $500 million in severance payments. 

The lawsuit claims that Twitter’s severance plan, established in 2019, entitled laid-off workers to two months of base pay and one week of pay for each year of service. Senior employees, including McMillian, were entitled to six months of base pay. However, the lawsuit alleges that Twitter only paid a maximum of one month of severance pay to terminated employees, with many receiving no severance at all.

Twitter underwent a massive layoff after Musk’s acquisition in October 2022, resulting in the loss of over half its workforce. The company cited cost-cutting as the reason for the layoffs. The lawsuit further accuses Twitter and Elon Musk of violating federal regulations governing employee benefit plans.

Previous lawsuits against Twitter related to severance payments, focused on breach of contract claims and did not involve benefits law. Twitter has maintained that it has fully paid former employees in accordance with their severance agreements.

The lawsuit highlights the challenges faced by Twitter in recent times as the company has struggled to maintain stability under its new owner, Elon Musk. The allegations of failing to fulfill promised severance payments further contribute to the company’s ongoing troubles. Twitter’s response to the lawsuit and the outcome of the legal proceedings will determine the impact on its reputation and future operations.