In the wake of Elon Musk’s colossal $44 billion acquisition of Twitter, legal battles have become the order of the day, with former executives of the social media giant filing lawsuits against Musk and his company, X, alleging breach of contract and unpaid severance.
Nick Caldwell, a former high-ranking executive at Twitter, is among those leading the charge, alleging that X failed to honor contractual obligations following his resignation in 2022. In a lawsuit filed in a California federal court, Caldwell contends that he and other executives were cheated out of a staggering $200 million in severance benefits.
The crux of Caldwell’s claim rests on accusations that X falsely accused him and others of misconduct, thereby justifying their dismissals without proper compensation.
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“This is a matter of principle and fairness,” Caldwell’s legal team stated.
Caldwell’s legal pursuit echoes similar grievances voiced by ex-CEO Parag Agrawal and other former Twitter executives, who have also lodged lawsuits against X, claiming millions in unpaid severance.
Caldwell, who now holds prominent positions at Peloton and various other tech ventures, played a pivotal role in managing a substantial engineering team at Twitter before the acquisition. He was the general manager of the Red Bird, also known as the core tech, organization.
Court documents reveal his efforts to retain crucial talent during the transition period, culminating in his resignation “for good reason” in October 2022, shortly after Musk’s publicized entrance into Twitter’s headquarters.
Twitter’s acceptance of Caldwell’s resignation should have triggered the “Twitter Change of Control and Involuntary Termination Protection Policy,” entitling him to severance benefits. However, Caldwell alleges that X abruptly terminated communication and falsely accused him of misconduct, effectively denying him rightful compensation.
“With no factual basis, Musk simply accused Mr. Caldwell of misconduct as a ploy to evade paying him millions of dollars in severance benefits,” his attorneys asserted.
The lawsuit implicates not only Musk but also several individuals associated with his other ventures, including SpaceX and Tesla. Allegations suggest a concerted effort by Musk’s associates “to deny the severance claims filed by Mr. Caldwell and the other executives as part of the severance benefit plan administration process.”
The lawsuit includes Brian Bjelde and Lindsay Chapman, who are employed at SpaceX, and Dhruv Batura, a former finance worker at Tesla, as defendants alongside Musk.
Caldwell’s legal team has meticulously calculated his owed benefits, totaling around $19.3 million plus interest, in addition to the value of restricted stock units and attorney fees.
Besides the legal confrontation of former employees, Musk’s quest to transform Twitter into an “everything app” has been met with a series of obstacles, including the exodus of users due to concern about unchecked hate speech and cyberbullying.
Last month, a federal judge named Charles Breyer threw out a lawsuit brought by Elon Musk’s company, X, against an organization called the Center for Countering Digital Hate (CCDH). Judge Breyer said that X’s lawsuit seemed to be more about punishing CCDH for criticizing X than about any real legal issue.
The CCDH is a group that works to stop hate speech online. They found that X wasn’t doing enough to deal with hateful posts on their platform. They said that X didn’t act quickly enough against racist and antisemitic posts.
X sued CCDH in July 2023, claiming that the organization was scaring away advertisers and costing them millions of dollars. They also said that CCDH broke the rules by scraping data from data from X’s platform and using it to make reports.
But Judge Breyer didn’t buy it. He said that X didn’t prove they had actually lost money because of CCDH, and he didn’t see any evidence that CCDH did anything wrong by using data from X’s platform.
“If CCDH’s publications were defamatory, that would be one thing, but X Corp. has carefully avoided saying that they are,” the court document reads.