Elon Musk suffered a major setback Friday night in a court battle over compensation sought by top executives at Twitter, which he fired when he took over the company in 2022.
A judge ruled that former Twitter CEO Parag Agrawal and other officials can pursue claims that Elon Musk wrongfully fired them before the 2022 deal to buy the company. Bloomberg News reported.
The executives allege that Musk fired them for refusing to give them severance pay, resulting in them being fired 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 having rushed to complete the acquisition to avoid generating payments. The CTO was quoted as telling Isaacson that there was “a $200 million difference between closing tonight and closing tomorrow morning.”
The lawsuit filed by the executives is one of thousands of lawsuits filed by former Twitter employees, alleging they were denied back pay stemming from the $44 billion acquisition of Twitter, which has since been renamed X.
Musk won a case decided in July, in which the alleged former employees were owed at least $500 million in severance pay under the provisions of the federal Employee Retirement Income Security Act.
However, U.S. District Judge Maxine Chesney rejected arguments made by Musk’s lawyers who argued in favor of dismissing the case brought by Agrawal, as well as Twitter’s former legal and policy counsel Vijaya Gadde, CFO Ned Segal and general counsel Sean Edgett.
These executives claim they are entitled to a year’s salary, as well as unvested stock awards estimated at the company’s acquisition price.
Representatives of X have not yet commented on the judge’s decision. The case is Agrawal v. Musk, 24-cv-01304, United States District Court, Northern District of California (San Francisco).
A source