Elon Musk Fails to Get Ex-Twitter CEO’s Severance Claim Dismissed

Elon Musk was dealt what was a significant setback late Friday in a court fight over compensation sought by the top Twitter Inc. executives he fired when he took over the company in 2022.

A judge ruled that former Twitter CEO Parag Agrawal and other officers can proceed with claims that Elon Musk wrongly fired them just before he closed the 2022 deal to buy the company, Bloomberg News reports.

The executives assert that Musk fired them in order to deny giving them severance, making the terminations before they could submit resignation letters.

The former executives filed the complaint in March, citing Walter Isaacson’s 2023 biography of Musk in which he is quoted as rushing to complete his acquisition in order to avoid triggering payouts. The tech CEO is quoted telling Isaacson that there was a “$200 million differential in the cookie jar between closing tonight and doing it tomorrow morning.”

The lawsuit by the execs is one of thousands that former Twitter staffers have filed, claiming they were denied back pay in the wake of the $44 million deal to acquire Twitter, since renamed X. 

Musk won a case decided in July that alleged former employees were owed at least $500 million in severance pay under provisions of the federal Employee Retirement Income Security Act.

However, U.S. District Judge Maxine Chesney rejected arguments by Musk’s lawyers who argued for dismissal of the case filed by Agrawal, as well as Twitter’s former legal and policy adviser Vijaya Gadde, chief financial officer Ned Segal and general counsel Sean Edgett.

Those executives claim to be owed one year’s salary, plus unvested stock awards valued at the company’s acquisition price.

X representatives have yet to comment on the judge’s decision. The case is Agrawal v. Musk, 24-cv-01304, U.S. District Court, Northern District of California (San Francisco).