Twitter laid of thousands of employees after Elon Musk acquired the company last year. The company, on the same day when it fired around 50% of its staff, tweeted that those affected will be given three months of severance pay from the company. However, a new lawsuit filed against the company suggests the ex-employees got nothing more than false promises.
The microblogging company, that has been struggling to remain stable for sometime now, thanks to its new owner- Elon Musk, is now facing a lawsuit alleging that it has failed to offer its promised severance payments of at least $500 million to thousands of employees who were laid off during the mass-layoff following Musk’s acquisition of the company. The lawsuit was filed by Courtney McMillian, a former Twitter employee who served as the “head of total rewards” at the company, in the San Francisco federal court.
According to McMillian’s lawsuit, Twitter has violated its own severance plan which was established in 2019 that entailed giving two months of base pay and one week of pay for each full year of service to the laid-off workers. 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, and many received no severance at all.
Following Musk’s acquisition of the company in October, Twitter underwent a massive layoff citing it as a cost-cutting measure. During this time, the company lost more than half of its employees. The lawsuit also accuses Twitter and Elon Musk of violating federal regulations governing employee benefit plans. Previous lawsuits against Twitter regarding severance payments focused on breach of contract claims and did not involve the benefits law. Twitter has asserted that it has fully paid former employees in accordance with their severance agreements.
With inputs from Reuters
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