Elon Musk faced a major legal setback on Friday, with a US judge ruling that several former Twitter executives, including ex-CEO Parag Agrawal, can move forward with a lawsuit against Musk and X Corp. The former executives argue that Musk intentionally terminated their positions during his Twitter acquisition in 2022 to avoid paying millions in severance benefits.
The former executives—Agrawal, Vijaya Gadde, Ned Segal, and Sean Edgett—allege they were fired just as Musk was finalising the acquisition, preventing them from formally resigning and claiming their severance. They seek compensation equal to one year’s salary and stock awards at the acquisition price. Agrawal and his colleagues cited a statement in Musk’s biography by Walter Isaacson, in which Musk reportedly calculated a $200
R3,551.57 million saving by closing the Twitter deal immediately rather than delaying it.
This ruling adds to Musk’s legal challenges as he faces claims from thousands of former Twitter employees, laid off when he purchased the platform for R777 billion in 2022, over unpaid severance. At least one ex-employee was awarded back pay in a private arbitration case in September, potentially setting a precedent for other former staff members.
In July, Musk’s legal team won a separate case involving an alleged R8.8 billion in severance pay, in which laid-off employees claimed compensation under the US Employee Retirement Income Security Act. However, Friday’s ruling means that Agrawal, alongside former executives like Nicholas Caldwell, who is pursuing a R353 million severance claim, will continue their fight for compensation.
The verdict highlights the legal complexities surrounding Musk’s high-profile acquisition of Twitter, now X Corp, and could pave the way for further rulings in favour of ex-employees. As of now, representatives of X Corp have not commented on the case.
Comments