Four former Twitter executives, including ex-CEO Parag Agrawal, have filed a lawsuit against Elon Musk, alleging that he failed to fulfill severance payments totaling over $128 million after they were removed from the company.
The former executives claim that Musk harbored animosity towards them after assuming control of the social media platform in 2022. They assert that Musk publicly declared his intention to withhold their severance payments to recoup approximately $200 million from the $44 billion deal. The lawsuit, filed in federal court in northern California, alleges that Musk’s actions constitute a breach of contract.
Twitter, now renamed X under Musk’s ownership, has faced multiple lawsuits alleging labor and workplace violations, including the failure to pay severance to thousands of laid-off workers post-acquisition. The company has also been accused of failing to settle debts with vendors and landlords while attempting to maintain financial stability.
Lawyers representing Agrawal and the other former executives described Twitter under Musk’s control as flouting rules and obligations, accusing Musk of leveraging his wealth and power to circumvent dissenting voices.
A spokesperson for X declined to provide a comment, while Musk did not immediately respond to requests for comment.
Upon assuming control of Twitter, Musk terminated several other high-ranking executives, including Vijaya Gadde (former legal and policy chief), Ned Segal (former CFO), and Sean Edgett (former general counsel).
The dismissals of the executives were not unexpected at the time, given their roles in Twitter’s lawsuit against Musk during the summer of 2022, aimed at compelling him to finalize his acquisition of the platform after he attempted to withdraw.
Each executive was slated to receive substantial payouts as part of Musk’s agreement to purchase Twitter, which included provisions to accelerate their unvested stock awards. Agrawal, in particular, was anticipated to receive approximately $50 million in severance payments.
In October, Agrawal, Gadde, and other former executives obtained a ruling from a Delaware judge mandating that X pay $1.1 million in legal fees they incurred while employed by the company.
In early December, X was unsuccessful in court-mandated mediation aimed at resolving claims from thousands of former Twitter employees who allege they were deprived of severance payments.
Furthermore, in December, a San Francisco judge rejected X’s motion to dismiss a lawsuit filed by employees who asserted they were denied bonuses for the year 2022, despite assurances in the months leading up to Musk’s acquisition that they would receive 50% of their target amounts.
The case is identified as Agrawal v. Musk, 24-cv-01304, in the US District Court for the Northern District of California (San Francisco).