Musk's X won't settle ex-workers' lawsuit seeking $500 million in severance pay

Lawyers for X and former engineer Chris Woodfield inform the court that talks failed to lead to an agreement

By Reuters

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'X' logo is seen on the top of the headquarters of the messaging platform in downtown San Francisco. — Reuters file

Published: Thu 29 Feb 2024, 10:19 PM

Settlement talks have failed in a lawsuit accusing X and owner Elon Musk of refusing to pay more than $500 million in severance to employees who were laid off after he acquired the company, according to a court filing.

Lawyers for X and former engineer Chris Woodfield, who filed the proposed class action last year, said in a joint filing in Delaware federal court on Wednesday that talks failed to lead to an agreement earlier this month.

The social media company, formerly known as Twitter, made an identical filing in the same court in a separate case that was brought by six former senior managers at the company who are also seeking severance pay.

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The lawsuits were paused in December so X and the plaintiffs' lawyers could pursue settlement negotiations. The stays expired on Tuesday.

X and lawyers for the plaintiffs did not immediately respond to requests for comment.

Both lawsuits claim that the company promised employees severance pay if they were laid off at various times, including when they were hired and after Musk acquired the company for $44 billion in 2022.

But after Musk culled the company's workforce, ultimately laying off more than half of the employees, those payments were never made, the plaintiffs allege.

Musk rebranded Twitter as X last July. The company has denied wrongdoing and has moved to send the proposed class action case to individual arbitration, a tactic it has employed in several other lawsuits stemming from the mass layoffs.

Hundreds of laid off employees, in turn, have accused X of stalling arbitration cases by refusing to pay initial filing fees.

Former Twitter employees have accused the company of targeting women, minorities and workers with disabilities for layoffs, failing to give the advance notice required by federal and state laws, and refusing to pay promised bonuses, among other claims. The company has generally denied wrongdoing.