Musk defeats ex-Twitter staff seeking US$500m in severance

A US judge has dismissed a case brought by former Twitter staff, who had accused billionaire Elon Musk of unlawfully denying roughly US$500 million (NZ$822m) in severance payments owed to workers fired after his takeover of the company.

Judge Trina Thompson said the employees had not proven that their claims were protected by federal law.

The ruling is a win for Musk, who purchased Twitter in 2022 and immediately set about making changes, including sacking thousands of staff.

The moves sparked multiple lawsuits from former staff and vendors, accusing the company of withholding payments that had been promised.

This complaint was filed in 2023 in a federal court in San Francisco by Courtney McMillian, the former "head of total rewards" at the social media site, which Musk renamed X.

In the complaint, she said the firm had provided staff only one month's worth of pay as severance instead of the far more generous benefits, including at least two months of salary and contributions toward health insurance, that had been promised.

Musk's team had urged the judge to reject the complaint, saying that America's Employee Retirement Income Security Act did not apply as claimed.

The act sets standards for private health and pension plans.

"We are disappointed in the ruling and considering our options for moving forward," a spokesperson for McMillian's team said.

Other cases, including one brought by former leaders of the company, are still working their way through the courts.

In her ruling, Judge Thompson gestured to those disputes, noting that workers might have opportunities elsewhere to prove their claims.

"The Court lacks jurisdiction. However, plaintiffs are not without recourse. Indeed, there are other cases brought against Twitter for the failure to pay wages or provide employee severance benefits during the same or overlapping period," she wrote.

This story was first published by the BBC.