Elon Musk and his social media company X are sued by former Twitter executive Nick Caldwell for allegedly failing to pay him millions in severance and benefits.
What Happened: As per the lawsuit filed in a California federal court on Wednesday, after Musk acquired Twitter for $44 billion in October 2022, the microblogging site “cheated Mr. Caldwell and other executives out of a combined $200,000,000 in severance benefits by falsely accusing them of misconduct and purporting to fire them for ‘Cause.'”
Caldwell resigned from Twitter in 2022 and is now the chief product officer for Peloton. He is seeking $19.3 million in severance benefits, plus interest, and around half a million dollars, representing the value of restricted stock units that he should have been paid in November 2022, and interest of around $3 million, plus attorneys' fees.
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The suit said that Caldwell actively worked on retaining crucial talent at Twitter until the acquisition was finalized. Subsequently, on Oct. 28, 2022, he submitted a resignation letter citing “for good reason.”
Twitter acknowledged Caldwell’s resignation, triggering the “Twitter Change of Control and Involuntary Termination Protection Policy,” which, according to Caldwell’s legal team, applied to executives departing under favorable circumstances.
Twitter informed Caldwell that his employment would conclude on November 27, a month following his resignation. However, the complaint said the company immediately revoked his access to internal systems and failed to communicate with him. By Nov. 27, Twitter alleged that Caldwell was terminated due to cause.
“With no factual basis, Musk simply accused Mr. Caldwell of misconduct as a ploy to evade paying him millions of dollars in severance benefits that Musk/Twitter owed to Mr. Caldwell,” his attorneys wrote.
The lawsuit identifies Brian Bjelde and Lindsay Chapman, currently employed at SpaceX, and Dhruv Batura, formerly in finance at Tesla, as defendants alongside Musk.
Why It Matters: This lawsuit is similar to one filed by other former Twitter executives, including ex-CEO Parag Agrawal, who also alleges unpaid severance. Last month, four former Twitter executives, including Agrawal, filed a lawsuit against Musk for allegedly withholding over $128 million in severance payments.
These lawsuits are the latest in a series of legal challenges that Musk and his social media company face. In 2023, when Musk changed Twitter’s name to X, the decision drew mixed reactions from investors and users, leading to a lawsuit against Musk and Twitter.
Moreover, the tech billionaire has been facing multiple lawsuits for failing to pay bills, with four cases filed against the company in February 2023 last year.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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