> X agreed to pay severance in employees' initial offer letters and later confirmed workers would receive severance at least as favorable during the post-merger period as they had under the old management. The severance plan entitled laid-off workers to at least two months of base salary, pro-rated performance bonuses as though all triggers for such bonuses had been hit, the cash value of any restricted stock units that would have vested within three months of separation, and a cash contribution for the continuation of health care coverage. Instead, the company paid two months of base salary to comply with the notice requirements of the federal Worker Adjustment and Retraining Notification (WARN) Act, plus one month of severance pay, according to court documents.
But Musk did publicly promise severance, then didn’t deliver. That would almost certainly be breach of contract.
And also given that Twitter universally refused to pay severance in all markets, including those with mandatory severance, I suspect Twitter’s decision isn’t coming from a legally sound place.
> In October, shortly after taking Twitter’s reins, Musk laid off more than half of its employees, promising most at least two months’ salary plus a week’s pay for every year they’d worked at the firm.
Key word here is the severance was promised to “most”, not “all” employees. Was that how it went down? I dunno, the article doesn’t say. Now you’re saying that no one was paid severance (“universally refused to pay severance in all markets”). Seems like there’s a lot of uncertainty here.
The July 12th lawsuit has some choice quotes[0] on exactly what was said.
>38. Section 6.9 of the Merger Agreement provided that for one year following the closing of the merger, Twitter would continue to provide Plan participants with “Severance payments and benefits . . . no less favorable than” those provided under Twitter’s policies immediately prior to the merger.
> 39. The same day the Merger Agreement was announced, Twitter’s then-CEO, Parag Agrawal and its then-Chairman Bret Taylor met with all Twitter employees and informed them that Twitter would continue to provide the severance Plan benefits for at least one year following the change in company ownership.
>42. The Acquisition FAQs relied on the Merger Agreement and stated that “[t]he terms of the agreement specifically protect Tweep [Twitter employees] benefits, base salary, and bonus plans (short/long term incentive plans) so they cannot be negatively impacted for at least one year from the closing date.” The FAQ specifically stated that, “[i]n the event of a layoff, any employee whose job is impacted would be eligible for severance.”
Note that Employees were not a party to the merger agreement.
Does an acquisition FAQ bind the company? I believe the argument is that it was effectively an offer to employees to stick around, and employees who did so effectively accepted the offer, at the cost of other opportunities in the market, and hence this was a binding contract. This doesn't seem so solid to me.
> I believe the argument is that it was effectively an offer to employees to stick around, and employees who did so effectively accepted the offer, at the cost of other opportunities in the market, and hence this was a binding contract. This doesn't seem so solid to me.
That's established law, it's the only way to hold companies to any of their promises.
So, another comment detailed other legal aspects, I'll tackle the "most" part. Even if no other contract exists, that means at least 50.1% of all laid off employees should receive some type of severance. Said severance can be anywhere from a penny to millions.
We don't know what went down. Musk could have actually paid 50.1% (or greater) employees severance. It doesn't matter, because in the U.S. you can sue anyone else for anything, illegal or not. I can sue you because your username sucks, for example. Oh and if you don't show up, I win a default judgement, so there is that.
Not in most of the US, but as detailed in the article, telling people you're paying two months severence (presumably in writing no less) and then not paying it is likely a breach of contract law.
Don’t contracts have to be two sided ? Like a promise to donate no strings attached, and then not donating is no breach of contract. If there are strings attached to donation and the other side promises signs off on the strings, then you have a contract but it’s not a one sided donation.
Giving up a large portion of your life to work for a company isn’t enough of a party to a contract in this regard? Someone could conceivably take this job over others, or not leave as early, if they have assurances of severance. It’s not a gift any more than paying someone for employment is a gift, so I don’t see how this has anything to do with charity.
> In business, if you don't honor agreements you get sued (and lose).
Unless you want future options with the person you are suing. Unless you need a reference. If you can afford it and if you are prepared to burn bridges.
(1) In some jurisdictions, some amount of severance is legally required in some circumstances, but the count at issue here is all in US jurisdictions where I don’t think that applies (to severance narrowly; there’s been some conflation of pay during a no-duty employment period that was used to comply with state and/or federal WARN Act notice requirements as “severance”, and while full pay and benefits for that time is legally required, its not severance in the strict sense),
(2) In most US jurisdictions, there is no general legal mandate for severance, but severance that is embodied as a term in the employment contract or otherwise part of a legally binding commitment or promise is required, and these cases involve specific allegations of such contracted or otherwise bindingly-committed-to severance.
https://www.shrm.org/resourcesandtools/legal-and-compliance/...
> X agreed to pay severance in employees' initial offer letters and later confirmed workers would receive severance at least as favorable during the post-merger period as they had under the old management. The severance plan entitled laid-off workers to at least two months of base salary, pro-rated performance bonuses as though all triggers for such bonuses had been hit, the cash value of any restricted stock units that would have vested within three months of separation, and a cash contribution for the continuation of health care coverage. Instead, the company paid two months of base salary to comply with the notice requirements of the federal Worker Adjustment and Retraining Notification (WARN) Act, plus one month of severance pay, according to court documents.