(Bloomberg) — Elon Musk suffered a major setback in a legal battle over damages sought by top Twitter executives, whom he fired when he took over the company in 2022.
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A judge ruled late Friday that former CEO Parag Agrawal and other top officials can move forward with claims that Musk validly terminated them because he was closing the deal to cheat them out of severance packages before they could submit resignation letters.
In the complaint filed by the former executives in March, they cited a passage in Walter Isaacson’s biography of Musk, in which the billionaire is quoted as telling the author as he rushed to complete the acquisition that there was “a $200 million difference in the cookie jar between he closes tonight and he does.” That’s tomorrow morning.”
Musk is facing legal claims for back wages filed by thousands of Twitter employees who he laid off when he acquired the social media company for $44 billion two years ago and renamed it X Corp.
At least one former employee was awarded unpaid severance pay in September in a closed arbitration that could set a precedent for other similar cases, the worker’s lawyer told Bloomberg News.
In July, Musk and
U.S. District Judge Maxine Chesney on Friday rejected arguments made by Musk’s lawyers that Agrawal’s claims should be dismissed. Agrawal was joined in the lawsuit by Vijaya Gadde, who was Twitter’s top legal and political officer; Ned Segal, CFO; and Sean Edgett, the company’s general counsel.
They claim they are entitled to severance pay equal to one year’s salary plus unvested stock awards valued at the acquisition price.
Chesney is overseeing two other lawsuits brought by Twitter executives, including that of Nicholas Caldwell, who was general manager of “core technology” and is seeking $20 million in compensation for the loss of severance pay. A judge on Friday denied Musk’s request to dismiss Caldwell’s lawsuit, which mirrors Agrawal’s claims.
Representatives for X did not respond outside normal business hours to a request for comment.
The case is Agrawal v. Mosk, 24-cv-01304, U.S. District Court, Northern District of California (San Francisco).
(Updates with link to ruling in second paragraph.)
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