US court allows Twitter's ex-CEO Parag Agrawal, other dismissed execs to sue Elon Musk for severance

In a decision issued late on Friday, November 1 (US time), the judge determined that the ousted executives could sue Musk, claiming he dismissed them during his acquisition of Twitter to avoid paying severance benefits, despite their intention to resign.

According to the Bloomberg report, the lawsuit, filed by Agrawal, former CFO Ned Segal, former legal and policy head Vijaya Gadde, and ex-general counsel Sean Edgett, argues that Musk terminated their roles before their resignations could take effect.

Musk took control of Twitter in a high-profile buyout in 2022, later rebranding it as "X."

The executives’ complaint, filed in March 2024, references Musk’s biography by Walter Isaacson, in which Musk reportedly mentioned a "$200 million gap in the cookie jar" between closing the acquisition that night or the following morning.

The former executives are demanding one year’s salary in severance and unvested stock awards at the acquisition price.

X’s representatives did not immediately comment, according to Bloomberg.

The case, titled "Agrawal v. Musk," is filed under case number 24-cv-01304 in the US District Court for the Northern District of California, San Francisco.

This lawsuit is one of several Musk faces after his sweeping layoffs at Twitter.

Judge Chesney, who is presiding over two other cases involving former Twitter executives, also declined on November 1 to dismiss a lawsuit filed by Nicholas Caldwell, Twitter’s former general manager of core technology, who seeks $20 million in severance compensation.

In other legal developments, an ex-employee secured severance pay through arbitration in September 2024, setting a precedent.

However, in July 2024, Musk and X won a case that sought $500 million in severance for approximately 6,000 laid-off workers.