Elon Musk and X Corp., formally known as Twitter, reached a settlement with former employees in a San Francisco court on Wednesday.
A court filing released Wednesday shows both parties reached an agreement for an undisclosed amount in principle, and requested that a Sept. 17 hearing be postponed while they worked out a deal.
The class-action lawsuit was led by two former Twitter employees, Courtney McMillian and Ronald Cooper, who requested $500 million on behalf of their colleagues.
When Musk bought Twitter for $44 billion in 2002, he fired 6,000 employees.
The class-action lawsuit stems from that turnover, after former Twitter employees say they did not receive their severance benefits or information about their severance package.
Twitter’s merger agreement states that severance, among other former employee benefits, would be honored for up to a year after the merger. The lawsuit claims that those promises were made to prevent a mass resignation that would threaten the merger deal.
The severance package included at least two months’ salary, six months’ pay plus one week for each year of service for senior employees and a cash contribution for continued health care, according to the suit.
McMillian’s severance package included six-and-a-half months’ pay, six months of continued health insurance coverage and any bonuses. She was offered severance equal to one month’s pay, according to the suit.
Copper’s severance allegedly included six months and one week of pay, six months of health insurance coverage, and any bonuses. He was also offered severance equal to one month’s pay.
Some employees received nothing, the suit said.
McMillian said in the suit that she was informed that Musk and the company decided to deny employees their severance after reviewing how much it would cost the company.
The suit also stated that after the merger, Twitter would shut down Slack and emails to prevent employees from seeking information or communicating amongst themselves about their benefits.
When employees asked about the severance plan or other work policies, the company would refer them to view Musk’s personal X account and listen to the “All In” podcast, hosted by his friends Jason Calacanis and David Sacks.
The lawsuit claimed the fired employees were entitled to no less than $500 million.
A federal judge dismissed the class action lawsuit in 2024, but McMillian and Cooper appealed.
Attorneys representing the former employees and Elon Musk did not yet respond to a request for comment about the settlement. The CEO has yet to post about the settlement on X.
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