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“X” Didn’t Pay Severance. Now It’s Facing 2,200 Cases—and Big Fees (www.motherjones.com)
submitted 1 year ago by MicroWave@lemmy.world to c/news@lemmy.world
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Elon Musk’s alleged penchant for not paying bills is catching up with him. In the wake of numerous lawsuits claiming the world’s richest man failed to pay severance owed to many of the 6,000 employees he fired after acquiring Twitter. On Monday, CNBC reported that the tech company now known as X is facing some 2,200 arbitration cases filed by ex-employees, which come with $3.5 million in required fees—an amount that doesn’t even include the actual severance owed to those Musk let go.

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. Thousands claim that they haven’t received a single dime, and ex-employees have since filed several lawsuits seeking their promised benefits.

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[-] papalonian@kbin.social 119 points 1 year ago

You guys are failing to see that this was a simple misunderstanding.

Musk was told he needed to pay severance to all the ex employees, but he was confused why he was paying severance to "X employees" if they were still employed, so he simply didn't.

It's an easy mistake. Anyone could've done it.

[-] spider@lemmy.nz 12 points 1 year ago

Hence the rename from Twitter -- more five-dimensional chess from that crafty bastard.

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[-] bradorsomething@ttrpg.network 105 points 1 year ago

I worked at a company (as briefly as possible) where an advisor came in and did this. He started listing off who we actually needed to pay on our rotating debts and who we could put off and how long. When I left, within 3 months several very important vendors were calling asking if I could do anything to help them out. I told them if they stopped sending supplies that would probably help the process.

[-] ChickenLadyLovesLife@lemmy.world 34 points 1 year ago

I told them if they stopped sending supplies that would probably help the process.

Somebody running a business actually needed to be told this?

[-] NotYourSocialWorker@feddit.nu 51 points 1 year ago

Many sub contractors live on the mercy of the companies they supply. That forces them to show more goodwill than they want.

I remember a couple years back when Ericsson unilaterally decided that they would stop paying their bills after a month and instead changed it to three months. So, do you want to piss off the biggest company in the region or do you just say "Thank you, sir"?

As an aside, what kind of amoral sod goes around teaching companies what bills they can ignore and how morally bankrupt must you be to listen to them?

[-] bradorsomething@ttrpg.network 11 points 1 year ago

Capitalism has no moral component. In fact, quite the opposite in its purest form.

[-] ChaoticEntropy@feddit.uk 8 points 1 year ago

When your neck is on the chopping block anyway, I guess you see how long you can spin out your last words.

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[-] fiat_lux@kbin.social 67 points 1 year ago

Elon Musk’s alleged penchant for not paying bills is catching up with him.

Citation required. It's not having any effect on him personally, the businesses are the ones which are affected. And when you're not depending on your businesses to eat and live, there are zero consequences.

They're all his shitty decisions, but as usual, he doesn't pay for it. The profits are privatised while the losses are socialised. And I'm pretty sick of the media counting eggs before they hatch, because they usually don't hatch at all.

[-] Chozo@kbin.social 44 points 1 year ago
[-] fiat_lux@kbin.social 35 points 1 year ago

Yes, the business he bought (with not only his money) has been sued and evicted. The only time Musk has personally ever been on the hook was when he tried to wriggle out of buying said business, and the business sued him personally. Otherwise, he can walk away consequence-free from everything else.

[-] Chozo@kbin.social 10 points 1 year ago* (last edited 1 year ago)

Yes, the business he bought (with not only his money)

That's literally part of the problem. He hadn't paid interest on the loan he took out to buy Twitter.

But also, he was CEO when these things all happened. He is the one who made the decisions not to make payments toward rent on two of his offices, toward his loan, or toward his consulting firm. I'm not sure what sort of mental gymnastics you're doing to say that he isn't responsible for these things. Twitter wasn't having those problems pre-Musk, and is only having these problems as a direct result of Musk's decision-making. That's kinda part of what being a CEO entails.

Not sure why one would ask for citations and then dismiss them.

[-] Armok_the_bunny@lemmy.world 26 points 1 year ago

They aren't saying he pays his bills, they're saying there are effectively no consequences for him personally every time he does it. He's not the one footing the bill for these Xitter lawsuits, it's his company.

[-] Chozo@kbin.social 6 points 1 year ago* (last edited 1 year ago)

Yes, but he's also the sole owner of the company. They went private after the acquisition, so there are no more shareholders. It's his company now, so he is the one directly responsible for it at this point.

If you're the sole owner of a taco truck and you crash into an orphanage with it, you are responsible, not the LLC you registered.

[-] merridew@feddit.uk 10 points 1 year ago

LLC literally means Limited Liability Company.

The owners of the LLC are protected from some or all liability for acts and debts of the LLC, depending on state shield laws.

[-] FlyingSquid@lemmy.world 6 points 1 year ago

When it comes into crashing into an orphanage, that's definitely some and not all.

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[-] ChickenLadyLovesLife@lemmy.world 22 points 1 year ago

I think they meant citation required for the "is catching up with him" part.

[-] kitonthenet@kbin.social 9 points 1 year ago

If I lit your house on fire you wouldn’t spend much time arguing that it doesn’t hurt you directly, just your personal property

[-] fiat_lux@kbin.social 15 points 1 year ago

That would be a key difference between personal property and private property. Not that I own my own house.

Even if Musk was at personal risk of losing the entire amount of money Twitter cost, which he isn't, it would have no effect on his ability to live or conduct business.

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[-] PrinceWith999Enemies@lemmy.world 48 points 1 year ago

I haven’t yet seen an article where a reporter totals up the numbers and associated dollar amounts associated with Musk’s mismanagement. In terms of general classes - and I’m just going off the top of my head here - we’re looking at (including only the twitter related ones):

  1. Failure to pay agreed upon payouts for fired employees
  2. Age discriminatory termination lawsuits
  3. Violation of employment contracts re: return to work and other conditions
  4. Failure to pay rents and infrastructure fees
  5. Failure to moderate content according to legally required regulations
  6. Allocation of TSLA employees to work at Twitter, a different company with different shareholders, thus robbing Peter to pay Paul on investors’ dimes

There were also potential suits over mass terminations contrary to state and national laws, but I haven’t heard as much about those recently.

[-] remotelove@lemmy.ca 16 points 1 year ago

In the event that Twitter files for bankruptcy, would it partially shield them from all that debt? Yeah, it's a dirty play and would totally expect Elon to do it if he could.

[-] originalucifer@moist.catsweat.com 6 points 1 year ago* (last edited 1 year ago)

its so much worse than just that. there are so many financial mechanisms to avoid liability its not even funny. most of the unwashed are unfamiliar with them because they are specifically written to keep rich people rich.

money flows to the top, accountability... not so much. and that is 100% the design.

the twist here is a callous, idiotic billionaire using this lack of responsibility for his own enjoyment. he will never, ever personally suffer for any of the harm caused to all humans affected by his terrible business practices. he is shielded by money, or what we call money these days.

twitter will cost him billions in personal funds when it goes under, and it will not affect him at all.

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[-] jjjalljs@ttrpg.network 47 points 1 year ago

I still don't understand why no one has just pushed this guy out a window yet.

[-] gullible@kbin.social 47 points 1 year ago

I don’t mean this as a threat, but as plain kinetic question. How do billionaires stay so safe with so many enemies? It’s a bit baffling to me. Security is fascinating to me.

[-] Shadywack@lemmy.world 36 points 1 year ago

In this present day, we're barely steps or even a half step away from having absolutely tyrannically-dictator type behaviors from billionaires. It's almost as bad as the Roman Emperors that were batshit crazy, and their own Praetorian Guard eventually took those motherfuckers out. It baffles me how we had Presidential assassination attempts as recently as the 80's in the US but wasting billionaires just isn't a thing. It's very amazing power structure.

[-] FaeDrifter@midwest.social 6 points 1 year ago

Zuckerberg spends about $30 million per year on personal security, I would guess the rest of the billionaires do the same.

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[-] PersnickityPenguin@lemm.ee 21 points 1 year ago

It's because people like this around themselves with a cadre of yes men. Apparently Elon is known to have a large group of Tesla and SpaceX groupies essentially. To use them to replace key positions at X.

[-] shuzuko@midwest.social 17 points 1 year ago

On that's easy, it's because he's still on Putin's good side.

As to why no one has... encouraged him into any other "mysterious accident", though, your guess is as good as mine.

[-] OutlierBlue@lemmy.ca 12 points 1 year ago

Because you don't get your money back if you kill him. That's why the mob just breaks kneecaps.

[-] Thetimefarm@lemm.ee 10 points 1 year ago

No you just put a cut on the end of their pointer finger on their dominant hand. That way every time they touch something it reminds them who their money belongs to. You save kneecapping for someone who you've lost all hope of paying you back and now their value to you is as an example for others.

[-] TheGiantKorean@lemmy.world 6 points 1 year ago

... you sound like you have experience

[-] FlyingSquid@lemmy.world 9 points 1 year ago

He took a big loan from the Saudis to pay for Twitter, so that could still happen.

[-] XTornado@lemmy.ml 10 points 1 year ago

Not out of a window I guess. They have other style.

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[-] Godric@lemmy.world 33 points 1 year ago

X just might mark the spot for treasure here

[-] assassinatedbyCIA@lemmy.world 26 points 1 year ago

X is not gonna give it to ya

[-] MrFlamey@lemmy.world 24 points 1 year ago

So was the rebranding of Twitter to X just so Elon could say "U fuckin' wot m8? This company is X, and your employment contract is with Twitter, so it looks like you were never employed here."?

[-] TechnoBabble@lemm.ee 23 points 1 year ago

Fortunately that doesn't work.

Even if Musk totally shut down Twitter, then opened an identical platform named X, the contracts Twitter held are still enforceable under the law.

There might be stipulations in the contracts where severance isn't payable if the company fails, but if I remember correctly, this severance is something mandated by state law, and not just a contractual perk.

So bottom line, Musk is liable unless his lawyers are able to worm their way into a settlement.

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[-] aegisgfx877@kbin.social 22 points 1 year ago* (last edited 1 year ago)

Couldnt happen to a nicer dbag

[-] ewe@lemmy.world 16 points 1 year ago* (last edited 1 year ago)

Smart. Flush money down the toilet trying to impersonate Trump by not paying your bills. Maybe he should run for president.

[-] dmonzel@lemmy.world 18 points 1 year ago

Thankfully he can't.

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[-] NewPerspective@lemmy.world 14 points 1 year ago

This sounds like purposeful sabotage, but then again I've been saying that daily since Musk took over.

[-] nucleative@lemmy.world 8 points 1 year ago

Waiting like this was smart. Unfortunately.

Options:

  1. Stall as long as possible. Twitter makes a bunch of money. Have money to pay severances. All good.

  2. Twitter fails anyways. No money to pay anybody but had as long a runway as possible. Bankrupt and a financial guy nominated by a judge sorts it out.

[-] FlowVoid@midwest.social 5 points 1 year ago* (last edited 1 year ago)

When a company files for bankruptcy, employees who are owed money get first dibs on the liquidated assets.

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[-] TheGiantKorean@lemmy.world 6 points 1 year ago

What's that come out to, around? 4 weeks pay per employee?

[-] dmonzel@lemmy.world 5 points 1 year ago

Literally the post:

... X is facing some 2,200 arbitration cases filed by ex-employees, which come with $3.5 million in required fees-an amount that doesn't even include the actual severance owed to those Musk let go.

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[-] audiomodder 5 points 1 year ago

Well, minimum 2 months per employee plus the 4 weeks. Let’s figure an average salary of $80k. 6000 employees with an average tenure of 4 years. Let’s go ahead and round that to 3 months salary. So he’s paying the equivalent of 1500 employee’s average salary. That works out to about $120m.

I think my salary estimate is low there, and I have no idea what the tenure of the employees would be. Either way, not a small sum for a company that’s barely treading water.

[-] TheGiantKorean@lemmy.world 9 points 1 year ago

I am gyessing that engineers at Twitter were probably making around $150k per year, give or take.

[-] mosiacmango@lemm.ee 7 points 1 year ago* (last edited 1 year ago)

I would guess 150-250k.

Twitter was known for lower pay (and a lower pace) than the big names, but it's still the bay area.

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this post was submitted on 04 Sep 2023
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