Elon Musk and X resolve $500 million lawsuit from dismissed Twitter employees

Musk’s Company Reaches Tentative Settlement Over Lawsuit

Elon Musk and his social media firm, X Corp., have reached a preliminary agreement to settle a lawsuit brought by a former Twitter employee.

Attorneys for X Corp. and the former employee reported the development in a legal filing on Wednesday. Both parties requested that the U.S. Court of Appeals postpone upcoming court hearings to finalize the settlement, which would compensate the dismissed employee and conclude the lawsuit. The financial specifics of the agreement remain undisclosed.

After acquiring Twitter in 2022, Musk laid off approximately 6,000 workers and rebranded the platform as X. This led several former employees to file lawsuits over wrongful terminations and retirement benefits, with additional cases still active in courts in Delaware and California.

This settlement addresses a proposed class action lawsuit in California. The plaintiff, Courtney McMillian, previously served as Twitter’s “Director of Total Rewards,” managing employee benefits alongside Operations Manager Ronald Cooper.

A federal judge in San Francisco dismissed McMillian’s case in July 2024. She subsequently filed her appeal with the San Francisco-based U.S. Court of Appeals. The 9th Circuit was slated to hear oral arguments on September 17th.

The lawsuit claimed that a 2019 retirement plan guaranteed Twitter employees a week’s salary per year—on top of their base salary—if laid off. However, senior employees like McMillian asserted they were entitled to six months’ worth of base salary upon termination. Yet, according to the suit, many former employees received little to no retirement benefits; some were limited to just a month’s worth. Following Musk’s takeover, more than half of Twitter’s workforce was reportedly let go as part of cost-cutting measures.