Yet another former Twitter/X exec is suing Elon Musk for millions in unpaid severance
Another day, another unpaid severance lawsuit against Twitter/X and Elon Musk. Former Twitter executive Nick Caldwell is suing the social media platform for approximately $ 19.3 million in withheld entitlements, joining a slew of similar claims which have arisen since Musk took over in 2022.
Filed in a California District Court on Wednesday, the lawsuit states that Caldwell resigned from his former role as Twitter’s General Manager for Core Technologies on Oct. 22, 2022 — mere days before Musk officially took the reigns as its new owner. At the time, Twitter’s termination policy stated that executives such as Caldwell were entitled to severance packages if they resigned for “Good Reason” or were fired without cause.
Caldwell contends that his resignation fulfilled this requirement because Twitter going private meant he would no longer directly report to the CEO of a publicly traded company. Such a circumstance was specifically listed as a “material adverse change” and “Good Reason” for resigning under the company’s termination policy. Twitter was officially delisted from the New York Stock Exchange on Oct. 28.
In response to Caldwell’s resignation, Twitter/X allegedly told him that he would serve out his notice period until Nov. 27, but did not provide its standard separation agreement despite repeated requests. Musk subsequently fired Caldwell on Nov. 27, terminating him for alleged “failure to comply with the Company’s written policies or rules, including its code of conduct,” as well as “gross negligence or willful misconduct in the performance of [his] duties.”
This meant that, in Musk’s assessment, Caldwell had been fired with cause and was thus no longer entitled to his $ 19.3 million severance package. Caldwell disputes this, claiming that he resigned for “Good Reason” before he was ostensibly fired, and that Twitter/X failed to provide any facts or proof to substantiate its accusations against him.
“Tellingly, Musk’s termination letter, like those of the other executives, did not include any facts demonstrating any misconduct or grounds for termination for ‘Cause,'” the lawsuit reads (emphasis original). “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.”
In addition to his $ 19.3 million severance entitlements, Caldwell is seeking interest, attorney’s fees, and almost $ 490,000 for the value of the restricted stock units Twitter/X should have vested when his employment ended.
Twitter/X and Musk have been accused of withholding severance from over 2000 people
This is far from the only case of unpaid severance plaguing Twitter/X. The company has been inundated with a deluge of severance claims since Musk’s acquisition in late 2022, with the billionaire having laid off approximately 80 percent of its staff. Last September the company agreed to settlement talks with approximately 2,000 former employees, all of whom have accused Twitter/X of withholding their entitlements.
Caldwell isn’t even the only former Twitter/X executive chasing millions in severance. In a similar lawsuit filed last month, Twitter/X’s former Chief Executive Officer Parag Agrawal, Chief Financial Officer Ned Segal, Chief Legal Officer Vijaya Gadde, and General Counsel Sean Edgett accused the company of withholding a combined total of over $ 128 million in unpaid severance. Like Caldwell, these former executives also accused Musk of fabricating reasons to fire them in order to avoid paying out their entitlements.
“Because Musk decided he didn’t want to pay Plaintiffs’ severance benefits, he simply fired them without reason, then made up fake cause and appointed employees of his various companies to uphold his decision,” the plaintiff’s complaint read. “He claimed in his termination letters that each Plaintiff committed ‘gross negligence’ and ‘willful misconduct’ without citing a single fact in support of this claim.”
Basically, there seem to be two possibilities. Either Twitter/X’s entire executive suite was engaging in gross negligence and willful misconduct, egregious behaviour which went completely undetected until Musk figured it out within mere hours of taking over the company. Or Musk was attempting a clumsy, ill-conceived scheme to stop haemorrhaging money into a $ 44 billion acquisition he did not want but was legally obligated to go through with.