Musk on the hook for $500M to former Twitter employees

Elon Musk will be digging deep into his pockets to pay former Twitter employees $500 million, Knewz.com can reveal. The billionaire has agreed to settle a lawsuit brought by some of the social media platform’s ex-staffers, who accused Musk of failing to pay their severance after he took over the company in 2022 and rebranded it as X.

“The parties have reached a settlement agreement in principle and began negotiating the terms of a long-form settlement agreement,” a legal filing in the case noted. “If the district court approves the proposed distribution, the agreement will resolve the litigation in its entirety and moot this appeal.” Two former staffers, Courtney McMillian and Ronald Cooper, had filed the original lawsuit against Musk, claiming Twitter’s 2019 severance plan promised most employees at least two months of base pay plus a week of pay for every year of service. Senior staff were owed six months of base pay. According to the lawsuit, most workers didn’t see a penny. While a federal judge dismissed the suit in July 2024, McMillian and Cooper appealed. The case was set to go to trial before the agreement was made. Musk bought Twitter for $44 billion in 2022, changed the popular platform’s name to X and cut around 6,000 jobs. It is not yet known how much money each worker will receive.

Musk was recently ordered by a judge to face another suit that claims he ran an illegal $1 million election lottery during President Donald Trump’s 2024 White House run. The class-action lawsuit alleges that Musk and his political action committee, America PAC, induced voters into signing a petition supporting the U.S. Constitution by offering what appeared to be a lottery-style chance to win cash, in exchange for personal information.

Arizona resident Jacqueline McAferty claimed Musk and his political action committee, America PAC, encouraged voters in several battleground states to sign the petition and provide personal information including their addresses and phone numbers, promising to choose one person per day to win $1 million. The lawsuit alleges voters never had a chance to collect the winnings. The Tesla and SpaceX boss did his best to have the suit dismissed, listing “red flags” as proof he had not run the alleged illegal lottery. Despite his pushback, U.S. District Judge Robert Pitman, who was appointed by President Barack Obama, pointed to other statements suggesting the defendants were “awarding” the money and that the $1 million could be “won.” “It is plausible that plaintiff justifiably relied on those statements to believe that defendants were objectively offering her the chance to enter a random lottery, even if that is not what they subjectively intended to do,” the judge said.

Musk’s “lottery” faced criticism in other corners, too. Philadelphia District Attorney Lawrence Krasner tried to block the contest. “I’ll be seeking a lot more money than that for what Elon Musk and America PAC have done,” Krasner said. Pennsylvania Judge Angelo Foglietta, however, ruled Musk’s sweepstakes was not illegal at the time.