Elon Musk Likely To Face Multiple Lawsuits As He Revamps Twitter

Multiple lawsuits are likely to be filed shortly against Elon Musk following his takeover of TwitterTWTR
Inc. on Friday. The first in the queue is likely to be from one of the four (or perhaps all four banding together) of the top executives who were let go shortly after the transaction closed.

Although it was well known that CEO Parag Agrawal, CFOCFO
Ned Segal, General Counsel Sean Edgett and Chief Legal Officer Vijaya Gadde, were unliked by Musk and unlikely to survive the merger, Musk’s reported assertation that they were all fired for “cause” opens up a legal hornets nest.

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It completely changes the terms of their payout via their Golden Parachute agreements as well as severance and possibly even the value of unvested stock options of the executives.

However, given the fact that Musk has only owned the company for a few days, it’s going to be difficult to justify in court that they can be fired for cause unless Musk can get some long-time key employees at the company that the executives have not lived up to their job expectations.

Twitter is headquartered in California which is notoriously pro-employee in any type of labor dispute, so in order to successfully argue that key executives meet the “cause” definition for termination Musk will have to show HR files showing a pattern of underpeformance.

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With layoffs that have been reported in the range of 75% of the company’s staff looming, Musk will have to choose carefully who he will allow to stay on who might testify on his behalf that the key executives didn’t meet up to their performance targets.

In addition, there are reportedly thousands of people involved in the massive Twitter layoffs which may have their own disputes with Twitter management over the terms of their separation.

Yes, Musk is a billionaire. However, whether he wants to face the labor board and other venues deciding the fairness of payout terms to various employees, remains to be seen. Clearly this would be a huge distraction for a company that Musk is trying to mend.

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