Elon Musk and his company ‘X’ (the site formerly known as Twitter), are currently facing more than two lawsuits due to mass layoffs, cost-cutting measures by “any means necessary,” and owing high-ranking employees millions of dollars.
On the 12th of July, the first lawsuit against Musk and one of the social media giants was filed due to violations of the Employee Retirement Income Security Act (ERISA) and owing former employees of around $500 million. On July 18th, the second lawsuit was filed due to allegations of fraud, breach of contract, and different forms of discrimination. X was accused of laying off former employees who were women, older people, and people of color.
Recently, another lawsuit was filed due to the firing of high-ranking employees. According to Ethan Sutin, a former engineering manager at Twitter and co-founder of the social app “Squad” which was acquired by the former, the mass firing was based on false reasoning to support a predetermined result. He was fired last May despite his excellent work performance and with this, he claimed that X was just avoiding paying him in full and giving him his part as the co-founder of Squad.
Based on the case, Sutin and his co-founder Esther Crawford decided to sell their app to X (Twitter) in 2020 for $36 million in cash and stock. X must also give Sutin $1 million for cash compensation and 44,769 shares for equity compensation. He then signed an agreement to work with X (Twitter) for four years. He then received 30,943 restricted stock units on Twitter and an additional 5,346 in January 2021 and March 2022 respectively. However, when he was fired in 2022, the company refused to give him approximately two-thirds of his equity compensation plan.
Moreover, Sutin is asking for compensatory damages and a law order forcing X to create his firing without any cause.
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