A major legal battle is brewing between Elon Musk and former top executives of Twitter, the social media platform he acquired for $44 billion in a contentious takeover last year. The ex-Twitter leaders have filed a lawsuit accusing Musk of unlawfully denying them over $128 million in severance pay they claim is owed to them.
The allegations from the former executives paint a troubling picture of Musk’s leadership and business practices since taking over the company, now rebranded as X. They say he has consistently flouted laws and contractual obligations by refusing to pay millions owed to employees he fired.
Leading the Charge Against Musk Spearheading the lawsuit are four of Twitter’s most powerful pre-Musk executives – former CEO Parag Agrawal, ex-Chief Financial Officer Ned Segal, former top legal chief Vijaya Gadde, and former general counsel Sean Edgett.
In the legal filing submitted to a federal court in California, they allege that Musk fired them for “no reason” within minutes of finalizing his $44 billion acquisition of Twitter in October 2022. He then fabricated accusations of “gross negligence and willful misconduct” as a pretext to avoid paying out their negotiatedseverance packages totaling over $128 million.
Agrawal alone says he is owed over $57 million, while Segal claims over $44 million, Gadde over $20 million, and Edgett over $6 million under the company’s executive compensation plan.
Pattern of Refusing to Pay Debts The former executives cast Musk’s actions as part of a “larger pattern” of stiffing Twitter’s employees and vendors of money they are contractually owed. They accuse the billionaire of believing “the rules don’t apply to him” and using “his wealth and power to run roughshod over anyone who disagrees with him.”
“Musk’s refusal to pay…is part of a larger pattern of refusing to pay Twitter’s former employees the benefits and other compensation they are due,” the lawsuit alleges.
Their legal salvo aligns with claims made in other lawsuits saying Twitter has failed to pay hundreds of millions in severance owed to fired workers. Recently departed employees in Ghana reported only receiving overdue severance in February, over a year after being let go.
Musk Tried to Back Out of Twitter Deal The lawsuit sheds light on the fractious relationship between Musk and Twitter’s executive ranks dating back to when he attempted to back out of his agreement to acquire the company for $54.20 per share.
It claims Musk was angered at being forced to consummate the deal after trying to exit it, and retaliated by firing the top leadership team he inherited after taking over. It alleges he dishonestly accused them of misconduct as a cover for breaching their severance agreements.
Among the purported misconduct cited by Musk’s team was the executives approving retention bonuses for employees, many of whom were soon after laid off en masse by Musk in cost-cutting downsizing.
Violation of Labor Laws Claimed By denying the agreed-upon severance, the lawsuit contends Musk ran afoul of laws and contracts protecting employee compensation.
It accuses him of turning Twitter into “an entity that flouts the law and does not pay its debts” under his stewardship. The legal action aims to make him honor the multi-million dollar severance packages negotiated years ago for when executives depart involuntarily.
Musk’s defense team and Twitter’s current management have not publicly responded to the specific allegations. However, the company has previously stated that all employees were paid what they were owed upon separation.
Ongoing Controversies at Twitter The severance dispute represents just the latest controversy engulfing Twitter since Musk took over in a deal he was forced to complete after trying to walk away.
He immediately sparked chaos by gutting much of the staff, upending content moderation, unbanning previously suspended accounts, and rolling out and then retracting new policies rapidly.
His ownership has been combative, featuring public dust-ups with advertisers and prominent users over his changes to the platform’s operations and business model.
The lawsuit from former executives promises to further shine a light on Musk’s leadership of the newly-rebranded X, and how he has chosen to manage the people and finances of one of the world’s most influential social networks since acquiring it.
