Elon Musk’s X has reached a tentative settlement with former employees who sued the company, then known as Twitter, for $500 million in unpaid severance, pausing one of the largest legal battles stemming from Musk’s 2022 takeover, according to the Boston Herald.
The deal was disclosed in a Wednesday court filing, and a federal appeals court in San Francisco agreed the following day to postpone a Sept. 17 hearing while both sides complete the agreement.
Terms of the settlement were not revealed.
The lawsuit was filed by former Twitter employees Courtney McMillan and Ronald Cooper, who alleged that the company failed to honor a severance plan it had offered in 2019.
That plan, they said, entitled most laid-off workers to two months of base pay plus one week for every full year of service, while senior staff such as McMillan were owed six months’ worth of base pay.
Instead, according to the lawsuit, Twitter provided at most one month of severance pay, and many employees received no severance pay at all. Musk slashed more than half the workforce after acquiring Twitter in late 2022, cutting entire teams dedicated to trust and safety, human rights, and accessibility.
The settlement marks progress in Musk’s lengthy legal battles with more than 2,000 former employees, though other lawsuits remain unresolved. One case was filed by top executives, including former Twitter CEO Parag Agrawal, who assert that they were also denied payouts.
Musk’s aggressive restructuring of Twitter became a model for his role earlier this year, leading to the creation of the Department of Government Efficiency, or DOGE. That federal initiative eliminated tens of thousands of government jobs.
As with his corporate overhaul, Musk’s approach to downsizing the federal workforce has triggered court challenges, though the circumstances differ from those at Twitter.
In a separate case, Musk was ordered on Wednesday to face a lawsuit accusing him of misleading voters in a political giveaway tied to the 2024 election.
U.S. District Judge Robert Pitman in Austin, Texas, ruled that plaintiff Jacqueline McAferty plausibly alleged Musk and his political action committee, America PAC, deceived participants into providing personal information by offering a chance to win part of his “$1 million a day” Constitution campaign.
The complaint alleges that the scheme amounted to fraud, drawing another legal battle for the billionaire even as he moves to close disputes from his Twitter acquisition.
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