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X's 0 million unpaid severance case dismissed, but it may not be over

X's $500 million unpaid severance case dismissed, but it may not be over

X (formerly Twitter) And its owner Elon Musk survived a $500 million unpaid severance lawsuit, successfully petitioning a California court to dismiss the case. However, this does not mean that the matter is over.

District Court Judge Class action suit dismissed. On Tuesday, accepting the defendants' argument that X was not governed by the severance plan. Employee Retirement Income Security Act (ERISA). As the plaintiffs alleged that X and Musk had violated ERISA, it barred their case because it did not even apply.

However, the court did not rule on the facts of the case. Indeed, the judge expressly stated that the plaintiffs could amend their complaint and assert other claims such as breach of contract or Promise closed.

It was initially filed in July last year. Trial Accuses X and Musk of failing to fulfill severance obligations to nearly 6,000 former employees. Kasturi started famously. holding on a large scale Dismissal Only days later Acquiring Twitter in October 2022Reduction of its workforce by At least 70 percent.

The complaint alleges that the fired employees were offered only one month of severance pay, which was less than the benefits outlined in the company's severance plan. The said plan had been in place since at least 2019, with Musk's merger agreement stating that employees would be offered severance and benefits “no less favorable than those” offered prior to his takeover.

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Thus, the plaintiffs alleged that X and Musk violated ERISA by denying benefits, breach of fiduciary duty, and failure to provide complete and accurate information about the severance plan.

X and Musk did not specifically deny allegations that it withheld employee rights. Instead, the defendants successfully raised jurisdictional issues.

For a severance plan covered by ERISA, it must include an “ongoing administrative program” that determines severance claims and benefits. The court found that X's plan did not include such a program because it determined severance by applying set formulas and mathematical calculations rather than requiring discretionary analysis on a case-by-case basis. Thus, ERISA does not apply.

Basically, the dismissal of the case does not necessarily mean that X has paid all the deductions legally owed to the plaintiffs. It simply means that they may have to come to X with claims such as breach of contract rather than violations of federal labor laws. Plaintiffs have three weeks to file an amended complaint detailing any of their claims that are unrelated to ERISA.

Regardless of whether plaintiffs pursue their grievance, X's legal woes surrounding his Musk-ordered layoff are far from over. A group of former Twitter executives previously filed a $128 million severance lawsuit. In March, The second brought in $19.3 million in April, and last September Musk agrees to settle unpaid severance claims from nearly 2,000 former employees. Tuesday's order noted that at least six lawsuits have been brought against X regarding severance, as well as five related to wages and discrimination.

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