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Ex-Twitter Workers Say Musk Owes Them Severance

By David Minsky

Law360 (May 17, 2023, 9:40 PM EDT) -- Six former Twitter employees have sued the company
and CEO Elon Musk in Delaware federal court, alleging they did not receive severance that was
promised to them after they resigned or were fired following his acquisition of the company last
year.

In the lawsuit filed Tuesday in Delaware federal court, ex-Twitter employees Wolfram Arnold, Erik
Froese, Tracy Hawkins, Joseph Killian, Laura Chan Pytlarz and Andrew Schlaikjer, who are referred
to as "Tweeps," said they were induced to stay with Twitter through the merger with Musk's other
companies but were instead fired or "constructively discharged" without their contractually
required severances.

"This was severance that Twitter and Musk had — in order to induce Tweeps to stay through the
close of the merger — promised would be paid if Musk conducted a layoff, and which Twitter and X
Holdings I had bound themselves to pay under the terms of the merger agreement," the lawsuit
said. "Indeed, it is clear that neither Musk nor X Holdings I ever intended to comply with that
obligation. As to employee obligations specifically, Musk proceeded in line with the principle on
which he generally operates: that keeping his contractual promises is optional."

Attorneys representing the former Twitter employees and representatives from Twitter and X
Holdings did not immediately return requests for comment Wednesday.

The employees' lawsuit stemmed from Musk's disclosure that he had purchased a 9.2% stake in
Twitter in 2022, followed by his intention to purchase the company and take it private. Twitter's
board agreed to approve the sale of the company in April 2022, and the transaction included a
merger agreement with Musk's X Holdings I Inc. and X Holdings II Inc. that would provide
remaining employees with "severance payments and benefits" that were "no less favorable" than
those Twitter had before the merger, according to the suit.

The plaintiffs said they were reassured they'd be able to keep some of their "unvested equity
awards," or RSUs, if they were laid off within the year after the merger and that severance would
include two months of base or incentive-based salary, prorated performance bonuses, cash value
of their RSUs that "would have vested within three months of separation," and a cash contribution
for the continuation of health care coverage — severance provisions that the plaintiffs said Twitter
put in writing via email.

There was a period of uncertainty over whether Musk would actually acquire Twitter, but the
plaintiffs said in their lawsuit that the severance communications were made to "assuage" any
concern and keep them on as employees.

In addition, they said, a final merger agreement obligated Twitter to maintain its pre-merger
benefits, including the severance, for at least one year following the acquisition and that Musk
intended to make good on that promise in order to retain employees so the company would
continue to run smoothly through the acquisition promise.

Toward the end of October 2022, after the Twitter deal closed, Musk walked into the headquarters
in San Francisco carrying a porcelain plumbing fixture and called himself "Chief Twit," and soon
after he reneged on the severance promise, according to the lawsuit.
Over several days in November, the plaintiffs said, Musk began laying off employees, including
Froese and Pytlarz, who were notified via email that they were let go and would receive a
severance package worth far less than what they were promised.

Killian and Hawkins said they weren't among the thousands of employees "chosen" for layoffs by
Musk but instead they were forced to resign after Twitter drastically changed the terms and
conditions of their employment, according to the suit.

Hawkins alleged Musk forced her to resign when she refused to violate professional ethics by
causing Twitter to intentionally breach leases and other contracts, according to the suit.

Killian, who was Twitter's global head of construction and design, said he was immediately
assigned Hawkins' duties and was instructed to break Twitter's leases and was told by Musk that
Twitter would only pay rent "over his dead body," according to the suit. Killian quit the company in
December 2022.

"Musk's instruction to simply ignore Twitter's contractual obligations and force Killian to breach
contracts and destroy relationships he had spent more than a decade building would have been
more than enough to render it impossible for Killian — or any reasonable employee — to remain
employed at Twitter," the suit said.

The plaintiffs are represented by Joseph L. Christensen of Christensen & Dougherty LLP and Akiva
Cohen, Dylan M. Schmeyer and Michael D. Dunford of Kamerman Uncyk Soniker & Klein PC.

Counsel information for the defendants could not be immediately determined Wednesday.

The case is Arnold et al. v. X Corp. et al., case number 1:23-cv-00528, in the U.S. District Court
for the District of Delaware.

--Editing by Gemma Horowitz.

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