United States District Judge Trina Thompson in San Francisco, California ruled that the federal Employee Retirement Income Security Act governing benefit plans did not cover the former employees' claims, and therefore she lacked jurisdiction. The judge said the post-buyout severance plan offered only cash payments, without any ongoing administrative scheme or additional benefits such as continued health insurance or outplacement services.
The lawsuit was one of many accusing Musk of breaking promises to former Twitter employees, including ex-CEO Parag Agrawal, and vendors after he acquired the company for $44 billion in October 2022. Musk, who is the world's richest person according to Forbes magazine, also runs the electric car company Tesla.
The plaintiffs' lawyers expressed disappointment with the ruling and said they are considering their legal options. Lawyers for Musk and X, the new name for Twitter, did not immediately respond to requests for comment.
According to the complaint, Twitter's pre-buyout severance plan called for employees who stayed on after the acquisition to receive two or six months of pay, plus one week of pay for each year of employment, if they were laid off. However, the plaintiffs alleged that Twitter instead offered fired employees just one month of pay as severance, with no benefits.
The judge's decision means the former Twitter employees can only try to amend their complaint for claims not governed by ERISA. The case is McMillian et al v Musk et al, US District Court, Northern District of California, number 23-03461.
