Elon Musk accused of owing $500m of Ex Twitter Employees
According to a former Twitter human resources chief, the company has failed to pay around $500 million (£385 million) in severance pay to former employees.
The claim was made in a class action lawsuit brought by Courtney McMillian, formerly the head of total rewards on the social media site.
Twitter owner Elon Musk knew about the severance plan before he sacked thousands of employees, according to the complaint.
However, it says he balked at the “expense”.
In response to Mr Musk’s purchase of Twitter for $44bn (£34bn) last year, multiple lawsuits have been filed against the company over mass firings.
According to the lawsuit, approximately 6,000 people were laid off as a result of the layoffs.
According to the complaint filed in federal court in San Francisco, Twitter’s severance plan required staff to receive a minimum of two months base salary, along with a cash contribution toward health insurance.
For those in more senior roles, including Ms McMillian, severance pay included six months’ base salary plus one week for each full year of experience.
After being sacked, staff received “at most” three months’ pay. According to the complaint, workers were provided with notice of their firing, which includes one month’s severance and two months’ pay.
Employees were entitled to $500m, but that was only a fraction of it.
No comment was received from Twitter, which no longer has a public relations department.
During a round of mass layoffs in November, Musk said that staff would receive three months’ pay, “50% more than was legally required”.
Employees complained that Mr Musk misled them about whether the company would honor the plan, causing some to stay at the company for longer than they would have otherwise.
According to Kate Mueting, the lawyer representing Ms McMillian at Sanford Heisler Sharp, Musk initially promised employees that Twitter would continue to abide by the severance plan under his leadership.
In her view, he made these promises knowing that they were necessary to prevent mass resignations that would have undermined the merger and Twitter’s viability.