Elon Musk could indeed face multiple lawsuits related to policies and actions taken after his acquisition of Twitter, now rebranded as X. Since Musk bought the platform in 2022, significant changes in workforce and company policies have triggered legal challenges, primarily from former employees but also from regulatory bodies.
One of the most prominent legal issues involves a class-action lawsuit brought by thousands of former Twitter employees who were laid off after Musk drastically reduced the workforce from about 7,500 to 2,000. These employees claimed that Musk and X failed to honor severance agreements that were part of their employment contracts or promised during the acquisition. The lawsuit alleged that the company owed approximately $500 million in severance payments, including up to six months’ salary for some workers. Initially, X provided only one month’s pay or sometimes no severance at all, which led to the dispute. After years of litigation, including a dismissal by a federal judge and an appeal pending before the Ninth Circuit Court, X agreed to a tentative settlement covering most of the severance claims, though the exact terms remain confidential and require court approval. This settlement also extends to arbitration cases involving about 2,000 employees, indicating a broad effort to resolve these employment disputes comprehensively.
In addition to the mass layoffs lawsuit, smaller groups of former employees have filed separate suits alleging breaches of contractual obligations tied to Musk’s acquisition deal. For example, nearly 70 former staffers accused X of failing to honor severance promises, leading to another tentative settlement. These lawsuits highlight ongoing tensions around how the company handled workforce reductions and employee rights during the transition period.
Beyond employee-related lawsuits, Musk is also contending with regulatory scrutiny. The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit accusing Musk of misleading investors by failing to properly disclose information about Twitter stock transactions. Musk has pushed back, seeking to dismiss the SEC’s claims, but this legal battle remains unresolved. The SEC’s allegations suggest that Musk’s handling of Twitter’s stock disclosures could have financial and legal repercussions separate from the employment disputes.
Furthermore, lawsuits involving former senior Twitter executives continue, with claims for severance payments estimated at around $128 million still pending. These cases underscore the complexity and scale of legal challenges Musk faces related to his management and restructuring of Twitter/X.
In summary, Elon Musk’s ownership of Twitter/X has led to a series of lawsuits primarily focused on severance payments and contractual obligations to former employees, alongside regulatory actions concerning stock disclosures. While some
