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Published 23:19 IST, November 2nd 2024

Elon Musk Faces Legal Setback, Loses Bid to Dismiss ex-Twitter CEO’s Severance Lawsuit

The former executives filed their complaint in March, referencing a quote from Walter Isaacson’s biography of Musk.

Reported by: Digital Desk
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10 Elon Musk Quotes For Business Owners
The former executives filed their complaint in March, referencing a quote from Walter Isaacson’s biography of Musk. | Image: Instagram

Elon Musk suffered a notable setback in a legal battle regarding the termination of top executives at Twitter Inc. following his acquisition of the company in 2022. A judge ruled late Friday that former CEO Parag Agrawal and several other high-ranking officials can move forward with their claims, asserting that Musk terminated them to avoid paying severance before they could submit resignation letters.

The former executives filed their complaint in March, referencing a quote from Walter Isaacson’s biography of Musk. In it, Musk reportedly expressed urgency to finalize the acquisition, stating there was a “200-million differential in the cookie jar between closing tonight and doing it tomorrow morning.”

Musk has been contesting various legal claims for back pay from thousands of Twitter employees he laid off during his $44 billion acquisition of the social media platform, now rebranded as X Corp. Recently, a former employee won an arbitration case for unpaid severance, potentially setting a precedent for similar claims.

In July, Musk and X Corp. successfully dismissed a lawsuit that sought at least $500 million in severance for about 6,000 laid-off employees under the federal Employee Retirement Income Security Act.

U.S. District Judge Maxine Chesney rejected Musk's legal team’s attempts to dismiss Agrawal's claims. Agrawal is joined in the lawsuit by Vijaya Gadde, the former top legal and policy executive; Ned Segal, the ex-chief financial officer; and Sean Edgett, the company’s former general counsel. The plaintiffs contend they are owed severance benefits equivalent to one year’s salary plus unvested stock awards at the acquisition price.

Updated 23:19 IST, November 2nd 2024