Former senior executives of Twitter are suing Elon Musk and X Corp., saying they are entitled to a total of more than $128 million in unpaid severance payments.
Twitter’s former CEO Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Counsel Vijaya Gadde and General Counsel Sean Edgett claim in the lawsuit filed Monday that they were fired without a reason on the day in 2022 that Musk completed his acquisition of Twitter, which he later rebranded X.
Because he didn’t want to pay their severance, the executives say Musk “made up fake cause and appointed employees of his various companies to uphold his decision.”
The lawsuit says not paying severance and bills is part of a pattern for Musk, who’s been sued by “droves” of former rank-and-file Twitter employees who didn’t receive severance after Musk terminated them by the thousands.
“Under Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others,” says the lawsuit, filed in federal court in the Northern District of California. “Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him.”
Representatives for Musk and San Francisco-based X did not immediately respond to messages for comment Monday.
The former executives claim their severance plans entitled them to one year’s salary plus unvested stock awards valued at the acquisition price of Twitter. Musk bought the company for $44 billion, or $54.20 per share, taking control in October 2022.
They say they were all fired without cause. Under the severance plans, “cause” was narrowly defined, such as being convicted of a felony, “gross negligence” or “willful misconduct.”
According to the lawsuit, the only cause Musk gave for the firings was “gross negligence and willful misconduct,” in part because Twitter paid fees to outside attorneys for their work closing the acquisition. The executives say they were required to pay the fees to comply with their fiduciary duties to the company.
“If Musk felt that the attorneys’ fees payments, or any other payments, were improper, his remedy was to seek to terminate the deal — not to withhold executives’ severance payments after the deal closed,” the lawsuit says.
X faces a “staggering” number of lawsuits over unpaid bills, the lawsuit says. “Consistent with the cavalier attitude he has demonstrated towards his financial obligations, Musk’s attitude in response to these mounting lawsuits has reportedly been to ‘let them sue.’”
Several former Twitter executives have filed a lawsuit against Tesla CEO Elon Musk, alleging that they were unfairly fired from their positions at the electric car company and are seeking $128 million in severance pay. The lawsuit, which was filed in a California court, accuses Musk of wrongful termination and breach of contract.
The executives claim that they were let go from their positions at Tesla without just cause and without being given proper notice or severance pay. They allege that Musk’s actions were in violation of their employment contracts and California labor laws.
According to the lawsuit, the executives were fired shortly after Musk took over as CEO of Tesla in 2018. The plaintiffs claim that Musk wanted to bring in his own team of executives and that they were unfairly targeted and terminated as part of a larger restructuring effort.
The former executives are seeking $128 million in severance pay, which they argue is the amount they would have been entitled to under their employment contracts had they been terminated without cause. They are also seeking damages for emotional distress and other losses resulting from their firings.
Musk has not publicly commented on the lawsuit, but Tesla has issued a statement denying the allegations and vowing to vigorously defend against the claims. The company maintains that the executives were terminated for legitimate business reasons and that their firings were in compliance with their employment agreements.
This lawsuit is just the latest legal battle for Musk, who has faced numerous lawsuits and controversies throughout his career. It remains to be seen how this case will play out in court, but it serves as a reminder of the potential legal risks that come with being a high-profile CEO in today’s business world.
