Former Twitter executives including CEO Parag Agrawal, Chief Financial Officer Ned Segal, head of legal Vijaya Gadde and General Counsel Sean Edgett sued Elon Musk and X Corp. in federal court arguing that they are owed $128 million in unpaid severance. Four twitter executives including former chief Parag Agrawal sues Elon Musk and said he fired them as he took over Twitter, now X, “without reason, then made up fake cause” to avoid handing over the severance package.
The ex-Twitter CEO said the move was part of a “larger pattern” of refusing to pay former staff what they were due. The accusations of Musk’s retaliatory actions against the executives following his acquisition of Twitter raise concerns about the treatment of employees and adherence to contractual commitments under his leadership.
Musk did not immediately comment.
Ex-Twitter executives sues Musk
Former Twitter CEO Mr. Agrawal filed the lawsuit with other 3 executives. In the lawsuit against Musk the former Twitter CEO contend that under a years-old severance package they are owed one year’s salary and stock awards. That would total more than $57m for Mr. Agrawal; more than $44m for Mr. Segal; more than $20m for Ms. Gadde; and more than $6m for Mr. Edgett.
Twitter acquisition by Musk
Musk purchased Twitter in 2022 for $44bn. The billionaire attempted to get out of the acquisition, but he eventually went ahead with the contentious agreement under threat of a lawsuit.
He then moved within minutes of the deal closing to fire key leaders, which included the four executives.
Lawsuit against Elon Musk
According to the lawsuit, the four men were told they had been sacked for “gross negligence and willful misconduct”. Examples that were given included signing off on retention bonuses for Twitter employees, thousands of whom were also fired in the wake of the takeover.
But the lawsuit alleges Musk was angry about being forced to complete the purchase. It further claims he has attempted to avoid paying the millions he owed the leaders, dismissing the severance package that laid out compensation if the executives lost their jobs without cause.
The two sides have been fighting over the money ever since and have now exhausted the administrative process, the lawsuit said.
X has previously said staff were paid in full. the ex-Twitter executives sues Musk as he was turning the company into an entity that flouts the law and does not pay its debts.
“Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him,” according to the filing in federal court in California.
The four executives’ lawsuit has attempted to paint Musk as an individual who avoids paying his debts and treats his employees poorly.
“Musk’s refusal to pay … is part of a larger pattern of refusing to pay Twitter’s former employees the benefits and other compensation they are due,” Mr. Agrawal and his former colleagues alleged in the lawsuit.
Other lawsuits against Musk
Last year, a former human resources officer at the platform filed a class action lawsuit accusing the company of failing to pay roughly $500m (£385m) in severance pay owed to former staff.
As per roughly 20 people working for the company in Ghana at the time of the takeover, which took place roughly 16 months ago, they had only recently received the money they were due.
The suit, Agrawal et al v. Musk et al, was filed in California’s Northern District and follows news that settlement talks between X Corp. and ex-Twitter managers broke down in a related case in Delaware, Woodfield v. Twitter Inc., where $500 million in unpaid severance to former Twitter managers and engineers is in dispute.
Implications of the lawsuits against Musk
The remakes made by the ex-Twitter CEO could further damage Musk’s reputation and credibility as a business leader. The outcome of this legal battle could have implications not only for Musk and X Corp. but also for the broader tech industry, as it underscores the importance of upholding contractual obligations and treating employees fairly in corporate transactions.
Overall, this news that ex-Twitter CEO sues Musk reflects the challenges and controversies that can arise in the dynamic world of technology and corporate acquisitions, and it will be interesting to see how the legal proceedings unfold and the potential impact on Musk’s reputation and X Corp.’s operations.
