US judge allows dismissed Twitter execs, including ex-CEO Parag Agrawal, to sue Elon Musk for severance

A California district court judge in the United States has allowed ex-Twitter executives, including former CEO Parag Agrawal, to pursue lawsuits against Elon Musk for severance pay, Bloomberg reported on November 2.

In a ruling made late on November 1 (US time), the judge ruled that dismissed Twitter executives can sue the billionaire for terminating their roles with the social media company during his acquisition and before they could resign, in order to cheat them of their severance, it added. Agrawal, ex-CFO Ned Segal, ex-legal and policy chief Vijaya Gadde, and the company's former general counsel Sean Edgett have filed the lawsuit.

Musk took over Twitter in a much publicised buy-out in 2022 and soon re-branded the social media platform as ‘X’.

‘200 Million Differential’

According to the complaint filed in March 2024, the former high-ranking officers cited Musk's biography by Walter Isaacson, in which Musk told the author there was a "200 million differential in the cookie jar between closing tonight and doing it tomorrow morning" when referring to the rush in Twitter's $44 billion acquisition.

The ex-execs claim that they are owed severance benefits equal to one year’s salary and unvested stock awards valued at the acquisition price.

Representatives of X didn’t immediately respond to queries, the report added. The case is Agrawal v. Musk, 24-cv-01304, US District Court, Northern District of California (San Francisco).

Future Course for Other Lawsuits

This is among many legal claims against Musk, who suddenly fired thousands of Twitter staff after acquiring the company.

Judge Chesney is overseeing two other lawsuits brought by Twitter executives, including one by Twitter's former core tech general manager Nicholas Caldwell, who is seeking $20 million as lost severance compensation. The judge on November 1 also denied a request by Musk's lawyers to dismiss Caldwell's claims.

In September 2024, one such ex-employee won unpaid severance through closed-door arbitration, setting a precedent for other cases, lawyers told Bloomberg. And in July 2024, Musk and X successfully fought off a suit for $500 million in severance pay for around 6,000 laid-off employees.

(With inputs from Bloomberg)