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 as a result of Musk’s 2022 takeover of the social media platform. The decision cleared the way for Agrawal and others to file claims for compensation, alleging that Musk intentionally terminated them to avoid contract payments.

The case, filed in March, hinges on when Musk fires Agrawal along with former Twitter executives Vijaya Gadde, Ned Segal and Sean Edgett. According to court filings, the executives claim that Musk’s decision to fire them immediately after the acquisition was intended to deprive them of significant severance benefits. In his biography, Musk reportedly told writer Walter Isaacson that he was eager to complete the deal as quickly as possible to avoid “a $200 million difference in the cookie jar between closing tonight and tomorrow morning.”

The case adds to a growing list of legal disputes Musk faces over employee benefits following his acquisition of Twitter, now renamed X Corp. Musk’s aggressive restructuring of the company included laying off thousands of employees, some of whom filed claims for unpaid severance pay. . They claim Musk failed to honor compensation agreements made before the acquisition.

Although 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 tilted in favor of employees. In September, a private arbitration panel awarded severance pay to the former employee, potentially setting a precedent for others making similar claims.

A recent ruling by U.S. District Judge Maxine Chesney also blocked Musk’s attempt to dismiss a related lawsuit by former Core Technologies CEO Nicholas Caldwell. Caldwell, who claims he was denied severance pay, is seeking $20 million in damages.