Twitter is facing yet another lawsuit as former employees allege that the micro-blogging platform has failed to fulfil its promise of paying over $500 million in severance to thousands of employees who were laid off following Elon Musk’s acquisition of the company.
The lawsuit, filed as a proposed class action in San Francisco federal court, was initiated by Courtney McMillian, who served as Twitter’s “head of total rewards” responsible for employee benefits programs before being laid off in January.
According to McMillian’s claims, Twitter introduced a severance plan in 2019 that outlined specific compensation for laid-off workers. Under this plan, most employees were promised two months of their base pay along with an additional week of pay for each full year of service. However, senior employees like McMillian were entitled to six months of base pay.
The lawsuit alleges that the social media platform only provided a maximum of one month of severance pay to the laid-off workers, and many received no compensation at all.
The legal action accuses both the company and Elon Musk of violating a federal law that governs employee benefit plans. Other previous lawsuits against Twitter regarding severance payments were based on breach of contract claims rather than violations of the benefits law.
Twitter, on its part, has stated that it has fully paid the severance to former employees. Although, according to reports, the social media company no longer maintains a media relations department and responded to a request for comment with a poop emoji.
Read Also: Twitter sued by employees for refusing to pay 2022 cash performance bonus
Other lawsuits Twitter has faced this year
Twitter laid off more than half of its workforce as a cost-cutting measure after Musk acquired the company in October 2022. But the social media company has been in the news for different reasons since the acquisition,
The media company has struggled with platform glitches, and indecisiveness in its product actions. It has also been hit with numerous lawsuits for allegedly failing to pay its bills, including rent, and by former employees for severance and back pay.
Just last month, a group of its employees filed a lawsuit against the social media company, alleging that it failed to fulfil its promise of paying its 2022 bonuses. Despite assurances that the bonuses would be paid out at 50% of the target amounts, the employees claimed that the company backed out on its commitment.
The lawsuit, which claims a breach of contract and promissory estoppel, was filed by Mark Shobinger who held the position of senior director of compensation at Twitter until recently, on behalf of both current and former employees who worked during the first quarter of 2023 but did not receive their bonuses.
Last month also, a group of 17 music publishers sued Twitter for copyright infringement on about 1,700 songs and is seeking as much as $250 million in damages. Also, since Elon Musk’s takeover, the company has faced different lawsuits from landlords of its offices for unpaid rent. Its U.S. advertising revenue, went down by 59%, a huge decline from the previous year.
Twitter is currently embroiled in multiple lawsuits resulting from layoffs initiated in the previous year. These legal actions include allegations that the company specifically targeted women and employees with disabilities during the layoff process. However, Twitter has refuted these accusations and denied any wrongdoing in the cases for which it has submitted formal responses.
The outcome of these lawsuits holds significant implications for the social media company as they will determine whether the company violated employee benefits laws. If found guilty, Twitter may face severe financial consequences as a result of its actions.
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