Yahoo News Elon Musk Sued By Former Twitter Executives for $128M in Latest Lawsuit Over Alleged Nonpayment
The list of former Twitter employees, landlords and vendors suing the social media platform and Elon Musk is growing, with four ex-executives filing a lawsuit collectively seeking more than $128 million in unpaid severance.
The executives, including former chief executive Parag Agrawal and other top officers who engineered a lawsuit against Musk after he tried to back out of the $44 billion deal, allege in a complaint filed Monday in California federal court that they were fired for gross negligence or willful misconduct in a bid to deprive them of benefits. They accuse Musk of holding a “special ire” against them for forcing him to follow through with the acquisition.
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The lawsuit is believed to be at least the 30th against X (formerly known as Twitter) over refusal to pay. After taking the helm, Musk proceeded to clean house by ousting several executives and roughly half of the employees. Several ex-employees have sued, claiming that they were not paid severance on their way out, as well as vendors for nonpayment.
“This is the Musk playbook: to keep the money he owes other people, and force them to sue him,” states the complaint from Agrawal, which also names former company executives Ned Segal, Vijaya Gadde and Sean Edgett as plaintiffs. “Even in defeat, Musk can impose delay, hassle, and expense on others less able to afford it.”
According to the complaint, Musk devised a scheme to stiff the officers of severance by accelerating the deal’s close and manufacturing fake “cause” terminations before they could resign and collect their benefits. Their termination letters asserted that they were being fired for failure to cooperate with a government or internal investigation but did not identify specific claims.
But unknown to Musk, the executives’ contracts contained standard “good reason” provisions that triggered their rights to benefits, the suit says. One of those conditions included Twitter becoming a privately held company.
Last year, the company denied the executives’ claims for severance, according to the complaint. They were told that they were fired for gross negligence and willful misconduct, primarily for paying retention bonuses and success fees to an unidentified and redacted party in the complaint for “their work in negotiating, litigating and closing the acquisition.” The party is likely to be Wachtell Lipton Rosen & Katz, which represented the company in forcing Musk to follow through with his acquisition of the platform. Last year, Twitter sued the firm for allegedly taking advantage of a client “left unprotected by lame duck fiduciaries who had lost their motivation to act in Twitter’s best interest pending its imminent sale.” It seeks restitution for a $90 million bill.
The complaint brings claims for violations of the Employee Retirement Income Security Act. The executives are represented by Dave Anderson, who served as the top prosecutor for the Northern District of California from 2019 to 2021.
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