Elon Musk faces authorized challenges as former Twitter executives, together with Parag Agrawal, proceed with claims for…
Parag Agrawal and Elon Musk
Elon Musk just lately confronted a setback in his ongoing authorized battle over severance funds to former Twitter executives he fired after taking up the corporate in 2022. On Friday, a decide dominated that former Twitter CEO Parag Agrawal and different prime executives can proceed with their claims towards Musk, accusing him of deliberately chopping them off simply as he finalized the acquisition deal to keep away from paying them promised severance.
In March, Agrawal and a number of other different former Twitter leaders filed a lawsuit towards Musk, arguing that he intentionally ended their employment earlier than they might formally resign, thus denying them the compensation outlined of their contracts. The executives declare that Musk rushed the acquisition deal to keep away from paying what might have amounted to $200 million in severance prices. This argument was supported by a press release Musk reportedly made to his biographer, Walter Isaacson, the place he mentioned he was keen to shut the deal rapidly to keep away from “a $200 million differential in the cookie jar between closing tonight and doing it tomorrow morning.”
Joining Agrawal within the lawsuit are Vijaya Gadde, Twitter’s former chief authorized officer; Ned Segal, former chief monetary officer; and Sean Edgett, former normal counsel. Each of them claims they had been entitled to 1 12 months’s wage together with unvested inventory awards, which might have been calculated at Twitter’s acquisition value.
This isn’t Musk’s first authorized problem relating to worker compensation. After buying Twitter, which he rebranded as X Corp., Musk carried out huge layoffs, dismissing 1000’s of workers as a part of a restructuring plan. Since then, many of those former staff have come ahead, submitting claims for unpaid severance, arguing that Musk didn’t honor the compensation phrases they had been promised.
In July, Musk and X Corp. received a class-action lawsuit the place laid-off staff had sought $500 million in severance below the Employee Retirement Income Security Act. However, in September, one other former worker was awarded unpaid severance via a non-public arbitration session, setting a possible precedent for different related instances.
The decide overseeing the present case, U.S. District Judge Maxine Chesney, additionally just lately denied Musk’s request to dismiss one other declare filed by Nicholas Caldwell, Twitter’s former “core tech” normal supervisor. Caldwell is in search of $20 million in compensation, arguing that Musk owes him severance for his misplaced place.
As Musk navigates a number of authorized battles over worker severance, it stays to be seen how these instances will impression his monetary obligations to Twitter’s former staff. This ruling now permits Agrawal and his co-plaintiffs to proceed their pursuit of severance funds, shifting the case nearer to trial.
