Elon Musk’s firm X has reached a preliminary settlement with ex-Twitter staff who brought a lawsuit seeking around $500 million in owed severance. Both sides informed a U.S. appeals court they were suspending the case in order to complete documents for the agreement. The court accepted delaying a scheduled hearing in September.
Court documents indicate the sides “have reached a settlement agreement in principle” and are drafting a long-form deal. The amount of money involved and who gets what hasn’t been disclosed. The agreement still must be approved formally by a court before it is finalized.
Why the Lawsuit Started and Who Filed It
The lawsuit was initiated by former Twitter staff who alleged the company violated its severance policy after Musk acquired Twitter in 2022 and laid off around 6,000 employees, over half of the employees. The suit, which was filed by Courtney McMillian and Ronald Cooper, alleged that numerous employees were deprived of the severance pay Twitter promised them under Twitter’s 2019 plan. Plaintiffs alleged that some of the senior employees were due up to six months of pay, while others got one month or nothing.
A case had been dismissed by a federal judge in 2024, but the employees appealed and the case was pending a hearing this fall. The filing of the settlement requested the appeals court to suspend that hearing while both sides complete the deal.
What That Means and What’s Coming Next
If approved by the court, the settlement would settle the big class-action lawsuit against severance pay related to the 2022 layoffs. Other lawsuits related to Twitter layoffs are pending in other courts. Scrutiny of the mass layoffs is not eradicated by the settlement, and additional suits regarding severance and stock-based compensation are pending.
Both X and the lawyers for the plaintiffs will have to sign off on detailed paperwork and request the court to bless the terms. The settlement remains “tentative” until the paperwork has been filed and signed off on by a judge. Neither Musk nor X has publicly addressed the result yet.
FAQs
- What did the workers claim?
They contended Twitter’s 2019 severance policy guaranteed certain payments, as much as six months’ compensation for top employees, but numerous workers who were let go received little or no money. The lawsuit demanded the repayment of around $500 million in unpaid severance.
- How many individuals were terminated?
Around 6,000 employees were fired following Musk’s acquisition in 2022, based on the lawsuit and reports.
- Is this settlement final?
Not yet. The parties negotiated an agreement in principle and requested the appeals court to postpone a hearing to complete the formal documents. The settlement must be approved in court.
- Will Elon Musk or X speak?
Through the filing, neither Musk nor X had publicly spoken. Court documents unveiled the settlement, but the complete details weren’t disclosed.
- Are there other lawsuits about the layoffs?
Yes. Individual lawsuits involving dismissals, unpaid stock bonuses, and severance continue elsewhere in other courts.
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