Elon Musk’s X Faces ERISA Violation Allegations

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Elon Musk's X (formerly Twitter) faces allegations of ERISA violations.

The Case: Courtney McMillan v. X Corp.

The Court: U.S. District Court, Northern California

The Case No.: 3:23-cv-03461

The Plaintiff: Courtney McMillan v. X Corp.

The plaintiff in the case, Courtney McMillan, alleges X violated the Employee Retirement Income Security Act (ERISA). In the California ERISA lawsuit filed July 12th, the former Twitter (now X) employee claims the company owes former employees more than $500 million.

The Defendant: Courtney McMillan v. X Corp.

The defendant in the case, X (formerly known as Twitter), allegedly agreed to distribute severance pay as determined by the employees' initial offer letters. The company also allegedly later confirmed that employees' severance pay would be equitable or better than the pre-merger terms put in place by old Twitter management. According to the severance plan, laid-off workers were entitled to:

  • A minimum of two months of base salary plus pro-rated performance bonuses (as if the triggers for all such bonuses were met) plus

  • The cash value of any restricted stock units that would have been vested within three months of separation plus

  • A cash contribution for health care coverage continuation

However, according to the lawsuit, the company offered two months base salary (in compliance with the notice requirements of the Federal Worker Adjustment and Retraining Notification (WARN) Act plus one month of severance pay.

The Case: Courtney McMillan v. X Corp.

Like retirement and group health plans, corporate severance plans can be subject to ERISA. According to the U.S. Department of Labor, severance benefits are not a pension plan if the payments are not contingent on retirement, the payments do not exceed double the employee's annual compensation, and the payments are completed within two years of the employee's layoff or termination. Companies that violate ERISA can face steep consequences.

If you have questions about how to file a California ERISA lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced ERISA attorneys are ready to assist you in various law firm offices in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.