Twitter Allegedly Owes Ex-Employees $500 Million In Severance

(Reuters) – Twitter Inc was on Wednesday hit by a lawsuit accusing it of refusing to pay at least $500 million in promised benefits to thousands of workers who were laid off after Elon Musk acquired the company.

Courtney McMillian, who ran Twitter’s employee benefits programs as its “head of total rewards” before she was fired in January, filed the proposed class action in San Francisco federal court.

McMillian claims that under a compensation plan created by Twitter in 2019, most workers were promised two months of their base pay plus one week of pay for each full year of work if they were laid off. Senior employees like McMillian are owed six months of base pay, according to the lawsuit.

But Twitter gave laid-off workers at most one month of severance, and many received nothing, McMillian said.

Twitter cut more than half its workforce as a cost-cutting measure after Musk acquired the company in October.

Twitter no longer has a media relations department. The company responded to a request for comment with an emoticon.

The lawsuit accuses Twitter and Musk of violating a federal law governing employee benefit plans. Twitter has already been sued for alleged failure to pay damages, but those cases involve breach of contract claims, not tort law. The company said it has paid its former employees in full.

A pending lawsuit filed last month accuses Twitter of also failing to pay millions of dollars in bonuses it owes other employees. Twitter said the allegations were baseless.

The company also faces a series of other lawsuits stemming from layoffs that began last year, including allegations that it targeted women and disabled workers. Twitter has denied wrongdoing in the cases in which it has filed responses.

Reporting by Daniel Wiesner in Albany, New York Editing by Alexia Garamfalvi and Bill Berkrot