Ex-Twitter leaders sue Musk for $128 million in unpaid severance. Lawsuit alleges breach of contract.

Four former top executives at Twitter, including ex-CEO Parag Agrawal, are suing Elon Musk for a combined $128 million in severance pay. They claim they were wrongfully terminated after Musk’s acquisition of Twitter and that the terms of their exit packages were not honored.

What Happened?

In October 2022, Elon Musk’s tumultuous acquisition of Twitter finally closed for a whopping $44 billion. Part of the deal often involves severance packages for outgoing executives. However, it appears things haven’t gone smoothly on that front.

Four former Twitter executives – Parag Agrawal (ex-CEO), Ned Segal (ex-CFO), Vijaya Gadde (ex-Legal Chief), and Sean Edgett (ex-General Counsel) – have filed a lawsuit against Elon Musk. They claim they were assured of receiving specific severance payments as part of their contracts, but these haven’t been paid out. The lawsuit alleges a total of $128 million owed to them.

Why They’re Suing

The lawsuit argues that the terms of the executives’ employment contracts were violated. These contracts typically guarantee severance packages under certain conditions, like a change in ownership. The executives believe they meet those conditions and are entitled to the agreed-upon severance pay.

What Does This Mean?

This lawsuit adds another layer of complexity to the ongoing saga of Twitter under Elon Musk. It’s a legal battle that could drag on for some time. Here are some potential outcomes:

  • Settlement: Both parties might reach a settlement agreement outside of court.
  • Court Ruling: A judge could rule in favor of the executives, requiring Musk to pay the severance packages.
  • Appeal: Either side could appeal the decision, potentially leading to a lengthy legal process.

Is There a Comparison Here?

While it’s not exactly an apples-to-apples comparison, there have been other high-profile cases of executive severance disputes.

For instance, in 2018, ousted Uber CEO Travis Kalanick was embroiled in a legal battle over his severance package after a series of scandals.

These situations highlight the importance of clear and ironclad contracts for both employers and employees, especially when dealing with major acquisitions and leadership changes.

This is a developing story, and it will be interesting to see how it unfolds. Here are some resources to keep you informed: