X Corp., Musk Sued Again for Severance by Former Twitter Workers

X Corp. and Elon Musk are facing another lawsuit by former Twitter employees who say they were wrongly denied more than $53 million in severance benefits in the wake of Musk’s takeover of the company.

The plaintiffs, three former high-level Twitter employees who reported to the chief executive officer, say they resigned from their positions once it became clear their duties would be “materially and irreversibly changed” following Musk’s acquisition. These “good reason” resignations entitle them to severance benefits, but the defendants engaged in bad faith and deceptive tactics to avoid their obligations, according to a complaint filed Thursday in the US District Court for the Northern District of California.

“Mr. Musk and Twitter abruptly shut Plaintiffs out of the Twitter offices and computer systems, insisted that until a certain date they remained employees who needed to participate in an internal investigation while not paying them or treating them like employees, and strung them along with promises of providing their separation benefits until abruptly, hours before the end of their notice period on the Sunday evening of Thanksgiving weekend, he terminated them ‘for Cause’ while not specifying a single piece of evidence demonstrating such ‘Cause,’” they said in the complaint.

Plaintiffs Sarah Personette, James Sullivan, and Dalana Brand say they’re each owed a severance payment ranging between about $14 million and $21.8 million. They also seek payments under under their restricted stock unit agreements.

Musk and X have been sued multiple times by former Twitter employees seeking severance benefits. In July, a federal judge dismissed a case seeking at least $500 million in severance on behalf of about 6,000 laid-off employees. The workers have appealed to the US Court of Appeals for the Ninth Circuit.

Melissa Hill, an attorney with Morgan Lewis & Bockius LLP who represented Musk and X in the prior severance litigation, didn’t immediately respond to a request for comment on the new lawsuit.

Personette, Sullivan, and Brand are represented by Renaker Scott LLP and Frankfurt Kurnit Klein & Selz PC.

The case is Personette v. Musk, N.D. Cal., No. 3:24-cv-06266, complaint 9/5/24.