Class Action Claims Ex-Twitter Employees Denied Promised Severance Pay

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A proposed class action lawsuit claims Twitter and owner Elon Musk have repeatedly refused to honor promises to pay severance to former employees.

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The 38-page lawsuit says that since Musk’s acquisition of the social media company in October 2022, Twitter and its high-profile owner have avoided paying former workers the severance package that was consistently promised to them prior to the merger. In addition, since ex-employees have begun to take action against the company to “recover what they are owed,” the defendants have “outright [refused]” to honor the terms of their own dispute resolution agreement (DRA) imposed upon workers when hired, the suit alleges.

Alongside the social media company and Musk, the case also names as defendants X Corp.—which owns Twitter—X Holdings I, Inc. and X Holdings Corp.

Before and after Musk and his companies entered into a merger agreement in April 2022, Twitter apparently made repeated promises to employees that they would receive severance and benefits “no less favorable than” those provided under Twitter’s policies prior to the merger, the complaint explains. As the filing tells it, however, Musk signed the contract “with every intention of violating its provisions.”

“In fact, it immediately became clear that Musk had no intention of honoring the arrangement that he had voluntarily agreed to in the Merger Agreement, and which he had reluctantly agreed to fulfill,” the lawsuit states.

According to the suit, Twitter had negotiated for provisions in the merger agreement that protected its employees by ensuring that pre-merger benefits, including severance, would be maintained for at least one year after the deal closed. In May 2022, months before Musk was due to take over, the company sent an email to workers that further outlined its severance policy in the event of layoffs, the case relays.

“Twitter circulated the Severance Policy Email specifically because it wanted its employees to rely on the promise that they would be paid such severance if they were later laid off and therefore decide to take the risk of remaining at Twitter through the merger, despite Musk’s evident dissatisfaction with Twitter as a company and Musk’s erratic personality,” the complaint reads.

The filing describes that Twitter “went out of its way” to tout its promises to employees in an effort to alleviate their concerns prior to Musk’s acquisition of the company.

“Those communications were made at a time of significant uncertainty and employee concern—among other things, Musk and Twitter were litigating over whether Musk could escape his agreement to purchase Twitter—and, on information and belief, were made in order to assuage that concern and convince Twitter employees to stay at Twitter through the merger,” the lawsuit shares.

Within months of Musk’s October 2022 takeover, however, thousands of Twitter employees were laid off, the suit says. According to the case, the email informing workers of their termination detailed a severance package of “far less than what Twitter had repeatedly promised—and contractually agreed—to pay.”

Contrary to the provisions in the agreement, which stipulated that the benefits of laid-off workers would be maintained for at least a year following the merger, the email declared that the company was offering severance to terminated employees in the form of only one month of base pay, the complaint explains.

What’s more, after the merger, Twitter tried to “engineer resignations” or create “excuses” to fire workers to avoid having to “keep its word to all of the laid-off employees” and pay them proper severance, the filing claims.

The plaintiff, a former senior staff network engineer who worked at Twitter’s Seattle office, was laid off in January 2023 and denied the severance repeatedly promised by the company, the lawsuit alleges. Though the man attempted to take the issue to a mediator—as the DRA he signed upon employment provided for arbitration in the event of a dispute—Twitter has breached the “explicit obligation to arbitrate” under its own DRA through efforts to delay and obfuscate the process, the suit charges.

As of this complaint’s filing date, former employees have submitted more than 2,000 demands for arbitration, but most remain in a “dispute resolution no-man’s-land, unable to move forward in a speedy and efficient manner due to Defendants’ persistent and intentional efforts to delay the proceedings at every stage,” the case contends.

The lawsuit looks to represent all Twitter employees who were laid off on November 4, 2022 through October 31, 2023.

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