Twitter owes ex-employees $500 million in severance, lawsuit claims

[1/2] Elon Musk's Twitter profile is seen on a smartphone placed on printed Twitter logos in this picture illustration taken April 28, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

July 12 (Reuters) - Twitter Inc on Wednesday was hit with a lawsuit accusing it of refusing to pay at least $500 million in promised severance to thousands of employees who were laid off after Elon Musk acquired the company.

Courtney McMillian, who oversaw Twitter's employee benefits programs as its "head of total rewards" before she was laid off in January, filed the proposed class action in San Francisco federal court.

McMillian claims that under a severance plan created by Twitter in 2019, most workers were promised two months of their base pay plus one week of pay for each full year of service if they were laid off. Senior employees such as McMillian were owed six months of base pay, according to the lawsuit.

But Twitter only gave laid-off workers at most one month of severance pay, and many of them did not receive anything, McMillian claims.

Twitter laid off more than half of its workforce as a cost-cutting measure after Musk acquired the company in October.

Twitter no longer has a media relations department. The company responded to a request for comment with a poop emoji.

The lawsuit accuses Twitter and Musk of violating a federal law regulating employee benefit plans. Twitter has already been sued for allegedly failing to pay severance, but those cases involve breach of contract claims and not the benefits law. The company has said it has paid ex-employees in full.

A pending lawsuit filed last month accuses Twitter of also failing to pay millions of dollars in bonuses it owes to remaining employees. Twitter has said the claims lack merit.

The company is also facing a series of other lawsuits stemming from the layoffs that began last year, including claims that it targeted women and workers with disabilities. Twitter has denied wrongdoing in the cases in which it has filed responses.

Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Bill Berkrot

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