What federal law is Twitter accused of violating in the lawsuit?

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Twitter Accused of Violating Federal Law Regarding Employee Benefit Plans

A lawsuit filed against Twitter alleges the company violated a federal law that governs employee benefit plans. The legal action was initiated by Courtney McMillian, a former employee who claims Twitter failed to disburse promised severance packages to thousands of staff members following Elon Musk's acquisition. The suit asserts that these alleged failures constitute a breach of the Employee Retirement Income Security Act (ERISA).
Severance Promises Under Scrutiny

The core of the lawsuit revolves around a severance plan established by Twitter in 2019. This plan reportedly guaranteed most employees two months of their base salary, supplemented by an additional week of pay for each year of service upon layoff. For senior personnel, including McMillian, the commitment was reportedly six months of base pay. However, the legal filing contends that Twitter provided a maximum of one month's severance, with many former employees receiving no payment at all.
Mass Layoffs Post-Acquisition

Following Elon Musk's takeover of Twitter in October, the company implemented significant cost-cutting measures that resulted in the dismissal of more than half of its workforce. This large-scale layoff is the backdrop against which the alleged non-payment of severance is occurring. McMillian, who was laid off in January, oversaw the company's employee benefits programs as its "head of total rewards" prior to her dismissal.
Legal Precedents and Company Response

This lawsuit specifically targets alleged violations of a federal law regulating employee benefit plans, distinct from previous legal actions that focused on breach of contract claims related to severance payments. While Twitter has previously stated it has paid former employees in full, this new litigation introduces a different legal framework. The company has also faced other lawsuits stemming from the layoffs, including accusations of discrimination, which it has denied.

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What federal law is Twitter accused of violating in the lawsuit?

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