Terminations at Twitter

I started writing this post last week.  It is already hopelessly out of date.  Elon Musk’s acquisition of Twitter generates news on a daily basis.  We might need to start a standard feature: Contracts News at Twitter.  Here’s a summary.  It would be a full-time job to track down all of the news items and verify their veracity.  Consider this something between reporting and rumor-mongering.  

Various sources report that Elon Musk is engaged in shenanigans to avoid making severance payments to the Twitter employees and executives whom he has fired.  In a now-deleted Tweet, Mr. Musk declares that these reports are false.  

There are two different or overlapping versions of the story.  According to Ryan Hogg at The Business Insider, Musk is fired Twitter’s former executives “for cause,” entitling him to avoid paying them $122 million in golden parachute payments.  It seems like we may not learn the outcome of any challenges to the action, as the executives’ contracts (here is former CEO’s Parag Agrawal’s) provide for arbitration.  According to the New York Times‘ Dealbook reporters, Andrew Ross Sorkin, Ravi Mattu, Bernhard Warner, Sarah Kessler, Stephen Gandel, Michael J. de la Merced, Lauren Hirsch and Ephrat Livni, the fired execs will have to bear their own costs, but may be able to recover them from Twitter in the (likely) event that their challenges are successful.  

In the another version, departing Twitter employees would be entitled to Twitter shares upon their departure after November 1st, and so Mr. Musk (right) fired them in October.  According to media reports, this action would save Mr. Musk nothing, as he is obligated under the terms of his agreement to acquire Twitter to either pay out the shares or the cash equivalent of their value.  According to Lora Kolodny of CNBC, Twitter is now reassuring workers that they will be paid in the first half of November.  

Then there are the mass lay-offs of Twitter’s staff, which apparently did not go smoothly, but how can it go smoothly when you lay off half a company while also trying to introduce massive changes in that company?  Kate Conger and Ryan Mac describe the ensuing chaos in The New York Times.  As Jules Roscoe of Vice.com reports, threats of class action lawsuits followed.  However, as Kate Conger, Ryan Mac and Mike Isaac report in a follow-up in The New York Times, Mr. Musk has committed to paying three months’ severance, which is one month more than his contractual obligations.  It is not clear what there would be to sue over if Mr. Musk makes good on that pledge.  Meanwhile, according to Kurt Wagner, Edward Ludlow and Bloomberg, reporting in Fortune.com, Twitter is having to rehire some fired workers.

Meanwhile, Twitter users, annoyed by Mr. Musk’s antics, are threatening to move on mass to Mastodon.  Early reports are unenthusiastic, but it takes a critical mass to make a move like that work.  Will this take us back to the days when blogs were where the action is?

That’s how things stand for now.