Judge blocks Elon Musk’s bid to avoid severance payments to former Twitter executives, including ex-CEO Parag Agrawal

A federal judge has ruled against Elon Musk’s attempt to avoid severance payments to former Twitter executives, including ex-CEO Parag Agrawal, who was fired upon Musk’s acquisition of the social media platform in 2022. The ruling paved the way for Agrawal and others to pursue their claims for damages, alleging that Musk deliberately terminated them to avoid contractual payouts.

The case, filed in March, hinges on the timing of Musk’s decision to fire Agrawal, along with former Twitter executives Vijaya Gadde, Ned Segal and Sean Edgett. According to court documents, the executives claim that Musk’s decision to terminate them immediately after the acquisition was aimed at denying them substantial severance packages. In his biography, Musk reportedly told writer Walter Isaacson that he would like to get the deal done quickly to avoid a “$200 million difference in the cookie jar between closing tonight and tomorrow morning.”

This case adds to the growing list of legal disputes Musk faces over employee compensation following the acquisition of Twitter, now renamed X Corp. Musk’s aggressive restructuring of the company included the layoff of thousands of employees, some of whom have filed claims for unpaid severance. . They state that Musk has not fulfilled the compensation agreements made before the takeover.

While Musk and X Corp. won a $500 million class action lawsuit in July from former Twitter employees seeking severance pay under the Employee Retirement Income Security Act, other cases have gone in the employees’ favor. In September, a closed arbitration session awarded severance to a former staff member, potentially setting a precedent for others pursuing similar claims.

The recent ruling by U.S. District Judge Maxine Chesney also blocked Musk’s attempt to dismiss a related claim from former “core tech” chief executive Nicholas Caldwell. Caldwell, who claims he was denied termination, is seeking $20 million for lost compensation.