Musk's Legal Battle Over Former Twitter Executives’ Severance Claims Continues

Overview of the Legal Conflict

Elon Musk faced a significant court setback recently, as a federal judge ruled that ex-Twitter CEO Parag Agrawal, along with other former top executives, could proceed with a lawsuit claiming they were denied severance pay. Musk, who acquired Twitter in 2022 for $44 billion and rebranded it as X Corp, had terminated these executives soon after finalizing the acquisition, allegedly preventing them from claiming their severance packages.

Severance Dispute and Accusations

In their March complaint, the former executives cited a statement from Musk's biography by Walter Isaacson, where Musk allegedly mentioned a "$200-million differential" in potential expenses between finalizing the deal immediately and delaying it until the following day. The plaintiffs argue that Musk orchestrated their terminations to avoid severance obligations.

Musk’s legal challenges have extended to claims from thousands of ex-employees who also allege unpaid severance following layoffs in the wake of the acquisition. Some employees have received compensation through closed-door arbitrations, which could set precedents for other severance claims.

Court’s Latest Ruling

US District Judge Maxine Chesney ruled that Agrawal and his fellow executives’ claims could move forward. Chesney dismissed Musk’s argument to throw out the case. Other former Twitter executives, such as Vijaya Gadde (former legal and policy chief), Ned Segal (former CFO), and Sean Edgett (former general counsel), have joined Agrawal in the suit. They are seeking compensation equal to one year's salary and stock awards based on Twitter’s acquisition value.

Further Legal Cases Underway

Judge Chesney is also handling other cases from former Twitter executives, including a $20 million compensation claim from Nicholas Caldwell, Twitter’s former general manager for core technology. The court’s decisions in these cases could establish critical precedents for severance disputes within the tech industry.

No Comment from X Corp.

Representatives from X Corp. have not yet responded to requests for comments outside regular business hours.