8 ms·
“X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases – and Big Fees
- vlovich123 3y agoIs severance something that’s legally required?
- deleted 3y ago[deleted]
- aquova 3y agoHe famously and publicly promised severance to all the employees he fired, as well as an incentive to get more of them to leave.
- deleted 3y ago[deleted]
- 542458 3y agoHeavily depends on locale and what the employment contract says. https://en.m.wikipedia.org/wiki/Severance_package 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.
- xienze 3y agoArticle 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 severance (“universally refused to pay severance in all markets”). Seems like there’s a lot of uncertainty here.
- fbdab103 3y agoThe 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.-Twitter-Complaint.pdf https://variety.com/wp-content/uploads/2023/07/McMillian-v.-...
- talaketu 3y agoNote that Employees were not a party to the merger agreement. Does an acquisition FAQ bind the company? I believe the argument is that it was effectively an offer to employees to stick around, and employees who did so effectively accepted the offer, at the cost of other opportunities in the market, and hence this was a binding contract. This doesn't seem so solid to me.
- lmm 3y ago> I believe the argument is that it was effectively an offer to employees to stick around, and employees who did so effectively accepted the offer, at the cost of other opportunities in the market, and hence this was a binding contract. This doesn't seem so solid to me. That's established law, it's the only way to hold companies to any of their promises.
- mlyle 3y ago
- dmoy 3y agoNot 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.
- hughesjj 3y agoDoesn't the WARN act require 60 days notice minimum (or 60 days worth of pay and vesting off all rewards in such period) in the case dog layoffs?
- naveen99 3y agoDon’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.
- lukevp 3y agoGiving up a large portion of your life to work for a company isn’t enough of a party to a contract in this regard? Someone could conceivably take this job over others, or not leave as early, if they have assurances of severance. It’s not a gift any more than paying someone for employment is a gift, so I don’t see how this has anything to do with charity.
- thaumasiotes 3y agoThat wasn't done in exchange for Elon Musk's severance offer. Existing employees when he took over were... already employees when he took over.
- lmm 3y agoUnder at-will employment, merely continuing to work for an employer amounts to consideration. This is well established.
- mlyle 3y ago
- deleted 3y ago[deleted]
- ceejayoz 3y agoWhen you promise it, sure. https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/twitter-severance-lawsuit.aspx https://www.shrm.org/resourcesandtools/legal-and-compliance/... > X agreed to pay severance in employees' initial offer letters and later confirmed workers would receive severance at least as favorable during the post-merger period as they had under the old management. The severance plan entitled laid-off workers to at least two months of base salary, pro-rated performance bonuses as though all triggers for such bonuses had been hit, the cash value of any restricted stock units that would have vested within three months of separation, and a cash contribution for the continuation of health care coverage. Instead, the company paid two months of base salary to comply with the notice requirements of the federal Worker Adjustment and Retraining Notification (WARN) Act, plus one month of severance pay, according to court documents.
- deleted 3y ago[deleted]
- jurassic 3y agoThese lawsuits are about enforcing contract terms. In business, if you don't honor agreements you get sued (and lose).
- lostlogin 3y ago> In business, if you don't honor agreements you get sued (and lose). Unless you want future options with the person you are suing. Unless you need a reference. If you can afford it and if you are prepared to burn bridges.
- Paul-Craft 3y agoOr, you don't want a public record of having previously sued a similar entity (e.g. employer, landlord).
- dragonwriter 3y ago> Is severance something that’s legally required? (1) In some jurisdictions, some amount of severance is legally required in some circumstances, but the count at issue here is all in US jurisdictions where I don’t think that applies (to severance narrowly; there’s been some conflation of pay during a no-duty employment period that was used to comply with state and/or federal WARN Act notice requirements as “severance”, and while full pay and benefits for that time is legally required, its not severance in the strict sense), (2) In most US jurisdictions, there is no general legal mandate for severance, but severance that is embodied as a term in the employment contract or otherwise part of a legally binding commitment or promise is required, and these cases involve specific allegations of such contracted or otherwise bindingly-committed-to severance.
- hactually 3y agoSurely there's a "change of control" clause in their contractuals?
- deleted 3y ago[deleted]
- wmf 3y agoWho do you think that clause would benefit and how?
- malshe 3y agoThis reminds me, did Parag and other in the top management get their money? I didn't see any update on that.
- bern4444 3y agoEvery shareholder got their money at the buyout price: $54.20 per share.
- hn_throwaway_99 3y agoThat's not what the parent comment was referring to. Senior execs had golden parachutes they were due if they were terminated.
- DonHopkins 3y agoWhy don't the people who actually do the work get golden parachutes?
- Uvix 3y agoBecause they don’t negotiate for it.
- replyifuagree 3y ago[flagged]
- jonathankoren 3y agoWe’re not even talking about golden parachutes. Literally every employee had a severance package specified and agreed to in the sales contract. Musk straight up violated the agreement the first week. The amount is negligible to the world’s richest man. He just violated it because he could. http://www.businesstoday.in/technology/news/story/elon-musk-accused-of-not-paying-500-million-in-severance-pay-to-ex-twitter-employees-gets-sued-389529-2023-07-13 http://www.businesstoday.in/technology/news/story/elon-musk-...
- Waterluvian 3y agoIt’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?
- deleted 3y ago[deleted]
- janalsncm 3y agoHow about prison time for executives who use the legal system in bad faith? Refusing to pay is not permissible.
- revscat 3y agoThis is America. Wage theft rarely gets punished, if ever.
- TulliusCicero 3y agoSorry, wage theft is done by people in corporations, therefore it doesn't count as real theft, so going to jail for it is almost impossible. If you wanna get away with a crime, do it in a company.
- jen20 3y agoIt need not be that way, as Sarbanes-Oxley demonstrates.
- TulliusCicero 3y agoAgreed, it doesn't have to be that way, but for most crimes, it's currently that way. The kinds of things that would get an individual sent to jail usually get a corporation hit with a fine.
- KingMob 3y agoI have this vague recollection that back in the 90's, some culture jamming collective tried to do adbusting defacement of billboards as an LLC, to avoid jail time. Might have been a CrimethInc. cell, I don't recall.
- hn_throwaway_99 3y agoWhen 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.
- andsoitis 3y ago> I hope all these folks get their severance, and hopefully with interest, legal fees and penalties. I wonder what percentage the legal team will take. I doubt this is happening pro bono.
- saghm 3y agoSounds like a good argument for Twitter/X to have to pay the legal fees; the laid off employees should get their full severance, and in order for that to happen, they shouldn't have to spend it on the lawyers
- epistasis 3y agoAnd it certainly should not be pro bono. It is a serious amount of work to take people to work, requiring years of education and a ton of skill. Particularly when the opposition has pockets as deep as X/Twitter/Musk. Hopefully there are large damages that go to those who have been wronged in addition to restitution and repayment of the legal fees I can not understand why some body like Musk who has such as easy ability to do the right thing would instead choose a far loser costly and damaging right. It's absolutely idiotic, absolutely damaging to the word as a whole, and fuck Musk. Only the worst sort of shit bag steals money at this level. If somebody steals baby formula out of desperation, they will feel far more drastic legal consequences than Musk will.
- deleted 3y ago[deleted]
- 3y ago
- _delirium 3y agoNot 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 https://news.ycombinator.com/item?id=22798118
- ttul 3y agoI’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.
- ip26 3y agoIs he known for plotting financial exploits like that? He certainly isn’t playing to make friends, but I’m not sure we’ve seen that kind of thing out of him before.
- nocoiner 3y agoI know having to say it’s sarcasm ruins the joke, but it’s so hard to tell on the internet sometimes. But… this is sarcasm, right?
- ip26 3y agoNot sarcasm, he is a jerk but I am trying to figure whether it would be in character or not. It sounds more like a play from the “vulture capitalist” toolbox. Although I suppose it could fit with a vision of unburdening a company to allow rebuilding.
- nocoiner 3y agoCheck out the time he bailed out his brother and Solar City at the expense of Tesla shareholders. Definitely some sharp financial engineering type shenanigans going on in that deeply conflicted transaction.
- jlmorton 3y ago
- iancmceachern 3y agoClassy
- tayo42 3y agoSomehow people are still trusting musk run companies? Especially with major public infrastructure stuff and government subsidies. What is the logic. He's backing out of all the promises and shown him self to be unreliable and vindictive but surely that won't happen to us?
- wmf 3y agoThe former employees who are suing for unpaid severance certainly aren't trusting anyone; that's why they're suing.
- WhereIsTheTruth 3y agoLaw doesn't apply to secret service special agents! Just like with Tesla/SpaceX, it'll get the help it needs from the government https://www.businessinsider.com/elon-musk-tesla-spacex-secret-service-special-agent-filing-donation-2021-4 https://www.businessinsider.com/elon-musk-tesla-spacex-secre...
- romusha 3y agoAnybody who still uses X (formerly Twitter) is supporting their behavior
- andsoitis 3y agoThe world is shaded in more than black and white.
- 000ooo000 3y agoThis line is a low-effort, cliché dismissal that does not engage the statement in a meaningful way.
- KingMob 3y agoThe original statement is also low-effort and cliché, so why should a comment require more effort?
- elaus 3y agoBecause we should strive to improve discussions and pull them up to a higher level if possible. Especially on HN, where the comment section is actually useful instead of a cesspool of empty arguments and insults.
- KingMob 3y agoBut saying "This line is a low-effort, cliché dismissal that does not engage the statement in a meaningful way" does none of the things you're hoping for, either. A much better idea is to down vote and move on.
- 000ooo000 3y agoIf I downvote a comment, how is the author to know why? If I want to promote thoughtful discussion on HN, downvoting without explaining why does absolutely nothing to serve that goal.
- evbogue 3y agoHow did we get to this place that so much of our media landscape was centralized within one failing company on Market Street in San Francisco?
- bemusedthrow75 3y agoI have long held that Twitter should have been bought by a consortium of media companies and run as a market utility. It’s been the media internet’s comment section for long enough that the BBC, MSNBC, Sinclair and even OANN ought to have understood the value of sharing it.
- hotnfresh 3y agoTwitter always should have been an Internet protocol. But we don’t make those anymore. Haven’t for a while. If we didn’t already have email, I doubt we could create it (and have it take off) today.
- dagw 3y agoIf we didn’t already have email, I doubt we could create it Hell we've pretty much 'uncreated' email over the past decade. How many people do you know who don't get their email via Google or Microsoft? I used to work for a very large university. Back when I was there, there was a team of Unix greybeards hosting all of the Universities email off of a bunch of Solaris boxes. It worked pretty flawlessly, end when it didn't they knew how to fix it. Today it's all been handed over to Microsoft and when something doesn't work, the help desk can just shrug and say "nothing we can do, it's Microsoft" Running your own email server in any practical meaning is more or less impossible.
- cropcirclbureau 3y agoMost of the world only got online and owned personal computers for the first time in the past decade through the meteoric spread of smartphones. Twitter was just there when they arrived and I suppose it was good enough. Twitter was also a famously mediocre implementation of a "great" idea but again, it was just at the right place at the right time.
- kaliqi_ 3y ago"X is not, in fact, gonna give it to ya" Nice.
- lost_tourist 3y agoI hope the judge awards them all 3X what they were promised as a punitive measure.
- threeseed 3y agoMeta question: Does anyone know why negative Twitter/X stories tend to drop off the front page so quickly. It is now ranked 65 despite having a lot of votes in such a short time period. Just wondering if it's because it is heavily flagged or if the mods are intervening like they have in the past ?
- decremental 3y ago[dead]
- adra 3y agoIt went from top of page 1 to page 3 by the time I came back to read the comments (less than an hour later). It's definitely someone playing games.
- qzx_pierri 3y ago[dead]
- nickthegreek 3y agoDang has specifically said recently that Musk content is hit with a penalty as it has a habit of taking over and discourse around these articles falls.
- aaron695 3y ago[dead]
- cropcirclbureau 3y agoIt's incredible just how comically bad the saga of Musk's acquisition of Twitter and his general fall from public grace has turned out. You really can't come up with this shit. Next thing you know, he's going to walk into a rake.
- floppiplopp 3y agoI'll just add this to the endless list of evidence, that true capitalists like lil' musky over there really just want stuff for free and hence not pay for anything.
- drcongo 3y agoWould any of the people defending Musk in this thread care to explain why? Every single time there's a thread about his abhorrent behaviour a percentage of people turn up to defend him, no matter what he's done. I honestly can't even begin to understand why.