Is severance something that’s legally required?
These lawsuits are about enforcing contract terms. In business, if you don't honor agreements you get sued (and lose).
“X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
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Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#22It’s basically a scumbag move to try to wear the former employees down. I imagine Twitter will just stonewall for as long as they possibly can.
What real consequences could the officers of the company actually face that would encourage them to behave like adults?
Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#23Earlier quoted context omitted.
Heavily depends on locale and what the employment contract says. https://en.m.wikipedia.org/wiki/Severance_package But Musk did publicly promise severance, then didn’t deliver. That would almost certainly be breach of contract. And also given that Twitter universally refused to pay severance in all markets, including those with mandatory severance, I suspect Twitter’s decision isn’t coming from a legally sound place.
Article is not clear. For instance: > In October, shortly after taking Twitter’s reins, Musk laid off more than half of its employees, promising most at least two months’ salary plus a week’s pay for every year they’d worked at the firm. Key word here is the severance was promised to “most”, not “all” employees. Was that how it went down? I dunno, the article doesn’t say. Now you’re saying that no one was paid severa…
The July 12th lawsuit has some choice quotes[0] on exactly what was said.
>38. Section 6.9 of the Merger Agreement provided that for one year following the closing of the merger, Twitter would continue to provide Plan participants with “Severance payments and benefits . . . no less favorable than” those provided under Twitter’s policies immediately prior to the merger.
> 39. The same day the Merger Agreement was announced, Twitter’s then-CEO, Parag Agrawal and its then-Chairman Bret Taylor met with all Twitter employees and informed them that Twitter would continue to provide the severance Plan benefits for at least one year following the change in company ownership.
>42. The Acquisition FAQs relied on the Merger Agreement and stated that “[t]he terms of the agreement specifically protect Tweep [Twitter employees] benefits, base salary, and bonus plans (short/long term incentive plans) so they cannot be negatively impacted for at least one year from the closing date.” The FAQ specifically stated that, “[i]n the event of a layoff, any employee whose job is impacted would be eligible for severance.”
That final sentence in 42 is pretty solid.
[0] https://variety.com/wp-content/uploads/2023/07/McMillian-v.-...
Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#24Is severance something that’s legally required?
Not in most of the US, but as detailed in the article, telling people you're paying two months severence (presumably in writing no less) and then not paying it is likely a breach of contract law.
Don’t contracts have to be two sided ? Like a promise to donate no strings attached, and then not donating is no breach of contract. If there are strings attached to donation and the other side promises signs off on the strings, then you have a contract but it’s not a one sided donation.
Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#25When do they start straight up garnishing X's bank accounts? This behavior is so shitty, indefensible and beyond absurd. I think we need stronger laws that force billionaires to pay when they think the rules just don't apply to them - it's clear they often feel that the sheer expense of the legal system is often a deterrent for poorer folks to get what they are owed.
I hope all these folks get their severance, and hopefully with interest, legal fees and penalties.
Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#26It’s basically a scumbag move to try to wear the former employees down. I imagine Twitter will just stonewall for as long as they possibly can. What real consequences could the officers of the company actually face that would encourage them to behave like adults?
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Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#27Not on the same case, but a previous HN discussion on the general subject of large volumes of arbitration cases being a kind of double-edged sword for the companies that originally decided to contractually compel arbitration: https://news.ycombinator.com/item?id=22798118
Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#28I’m not an employment lawyer, but it seems these former employees have a decent shot. They will eventually win their severance in court. But will they ever be paid?
By the time they win, will “X” even exist in its current corporate form? Or will it have gone bankrupt, only to have its assets purchased, leaving the employees standing in line with all the other creditors.
Indeed, I wonder whether Elon Musk structured the deal with a heavy layer of debt precisely so that the firm could be taken through Chapter 11 and reorganized under a fresh cap table. It wouldn’t be the first time in corporate history that a leveraged buyout resulted in existing stakeholders getting screwed over.
Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#29Earlier quoted context omitted.
Heavily depends on locale and what the employment contract says. https://en.m.wikipedia.org/wiki/Severance_package But Musk did publicly promise severance, then didn’t deliver. That would almost certainly be breach of contract. And also given that Twitter universally refused to pay severance in all markets, including those with mandatory severance, I suspect Twitter’s decision isn’t coming from a legally sound place.
Article is not clear. For instance: > In October, shortly after taking Twitter’s reins, Musk laid off more than half of its employees, promising most at least two months’ salary plus a week’s pay for every year they’d worked at the firm. Key word here is the severance was promised to “most”, not “all” employees. Was that how it went down? I dunno, the article doesn’t say. Now you’re saying that no one was paid severa…
So, another comment detailed other legal aspects, I'll tackle the "most" part. Even if no other contract exists, that means at least 50.1% of all laid off employees should receive some type of severance. Said severance can be anywhere from a penny to millions.
We don't know what went down. Musk could have actually paid 50.1% (or greater) employees severance. It doesn't matter, because in the U.S. you can sue anyone else for anything, illegal or not. I can sue you because your username sucks, for example. Oh and if you don't show up, I win a default judgement, so there is that.
Re: “X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
#30It’s basically a scumbag move to try to wear the former employees down. I imagine Twitter will just stonewall for as long as they possibly can. What real consequences could the officers of the company actually face that would encourage them to behave like adults?
How about prison time for executives who use the legal system in bad faith? Refusing to pay is not permissible.