Elon Musk Settles! The Billionaire Reaches Agreement to Resolve $128 Million Severance Lawsuit from Former Twitter Executives – Update
Elon Musk's recent efforts to mend fences with Donald Trump might be just getting started, but the tech mogul has already managed to strike a deal with some of Twitter’s former top brass.
A federal court filing in San Francisco dated September 30 reveals that the parties involved have agreed to terms, with certain conditions needing to be fulfilled soon. This development effectively brings closure to the $128 million lawsuit filed in March 2024 by ex-Twitter CEO Parag Agrawal, former CFO Ned Segal, ex-Chief Legal Officer Vijaya Gadde, and former General Counsel Sean Edgett. The filing also notes that postponing the current court deadlines will help both sides meet settlement requirements and save time and resources for everyone involved, including the court.
As is typical with such settlements, the specifics remain confidential, but it appears Musk — known for his combative legal style — likely had to part with a substantial sum of money to resolve the dispute.
A settlement conference is set for November 6 with Magistrate Judge Nathanael M. Cousins. While Musk himself probably won’t appear in court, his influence and finances certainly will be felt.
Here’s a flashback to March 4, 2024: The lawsuit from the four former Twitter executives was far more than just a tweet-length grievance. They demanded Musk pay the severance and benefits he allegedly refused to honor following their abrupt dismissals.
The complaint, lodged in a Northern California federal court, demanded a staggering $128 million. It accused Musk of terminating these executives without valid cause after refusing to pay agreed severance benefits, then manipulating others within his companies to justify his decision—essentially fabricating reasons to deny their rightful payouts.
The complaint is rich with detail, painting a picture of widespread legal battles erupting across industries, involving vendors, service providers, and thousands of former Twitter employees since Musk's high-profile $44 billion acquisition of the company in 2022 under considerable pressure.
The former execs argue this lawsuit highlights what they call “the Musk playbook”: hoarding money owed to others and forcing them into costly, drawn-out legal battles. Even when he ends up losing, Musk’s strategy appears to drag out proceedings and burden those less capable of fighting back financially.
Represented by the law firm Sidley Austin from San Francisco and Chicago, the plaintiffs cited Musk’s own words from his official biography by Walter Isaacson, wherein Musk is quoted boasting about his relentless pursuit of Twitter’s former executives and directors. According to the complaint, Musk openly admitted plans to cheat those former leaders out of their severance, hoping to save himself $200 million.
A critical factor in this case involved “good reason” clauses in the contracts of Agrawal, Segal, Gadde, and Edgett. These clauses guaranteed a full severance payout if Twitter ceased to be publicly traded — a status that ended when Musk privatized the company in October 2022. Despite these protections, Musk and his team apparently overlooked or disregarded these contractual guarantees when terminating the executives, which became the basis of their legal challenge.
While Musk has been publicly vocal on other issues—sharing concerns about immigration and celebrating recent SpaceX missions—he remained silent on the severance lawsuit. Representatives for X Corp, Twitter’s parent company, declined to comment on the suit filed by former CEO Agrawal and his colleagues.
Should Musk or X Corp respond to this suit officially in the future, updates will be provided.
But here’s where it gets controversial: Was Musk’s approach to excusing these severance obligations a calculated business move or a breach of ethical responsibility to former employees? Did the executives get shortchanged unfairly, or was Musk justified in his actions considering the complexities of privatizing and restructuring the social media giant?
What do you think? Was this just business as usual in Silicon Valley’s cutthroat world, or did Musk cross a line? Share your thoughts below!
