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1Repair Windows errors before they cause bigger problems2Scan for outdated or missing drivers - takes under a minute3Clear out junk files and repair common Windows errorsOn July 9, 2024, a federal judge dismissed former Twitter employees’ ERISA claims against X Corp. and Elon Musk because their complaint did not adequately allege an ongoing, ERISA-covered severance plan. The ruling was a win on that legal theory in one case—not a finding that employees had received all severance they were owed or that every related dispute was over.
What did the court decide?
In a proposed class action, former Twitter employees Courtney McMillian and Ronald Cooper alleged that after the October 27, 2022 takeover and layoffs, Twitter offered them one month of severance even though they said they were entitled to more under an alleged plan. Those were the plaintiffs’ claims, not facts established by the dismissal ruling.
The employees sued under the Employee Retirement Income Security Act (ERISA), the federal law that governs many employer benefit plans. The U.S. District Court for the Northern District of California focused on whether the severance arrangement described in the complaint qualified as an ERISA plan. On July 9, 2024, Judge Joseph C. Spero granted X Corp. and Musk’s motion to dismiss the ERISA claims. Read the court’s order.
Why did the ERISA claims fail?
The court said the complaint did not sufficiently describe an ongoing administrative scheme—the kind of continuing administration that can bring an employer benefit arrangement under ERISA. As pleaded, the alleged severance used set formulas and appeared to involve a one-time calculation and payment, rather than ongoing discretionary administration.
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That distinction matters because an employer’s promise to pay severance is not automatically an ERISA plan. The court decided that the allegations did not establish ERISA coverage; it did not decide that the employees had no contractual or other right to additional money, nor did it determine that the alleged benefit amounts were correct or incorrect.
What did the dismissal leave unresolved?
The judge allowed the plaintiffs to amend only claims that were not governed by ERISA. In other words, the order closed the door to the ERISA claims as pleaded, while leaving a limited opportunity to pursue non-ERISA theories. It was not a ruling that every possible claim arising from Twitter’s severance practices lacked merit.
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A later amended complaint states that the plaintiffs voluntarily dismissed their appeal in the earlier action on December 10, 2025. That statement appears in the later pleading; it is not a ruling on whether any employee was owed additional severance. Read the later amended complaint.
How did the broader severance litigation develop?
| Date | Event | What it does—and does not—show |
|---|---|---|
| July 9, 2024 | The Northern District of California dismissed McMillian and Cooper’s ERISA claims. | The court found the complaint did not adequately allege an ERISA-covered ongoing administrative scheme; it did not resolve every possible severance claim. Court order. |
| August 2025 | The Associated Press reported that parties in a $500 million severance case had disclosed a tentative settlement and asked to postpone a scheduled hearing while they worked to finalize it. | The $500 million figure described the claimed scale of the suit, not a court award. AP said the settlement terms were not disclosed; the report alone does not establish final approval or payment. Associated Press report. |
| December 10, 2025 | A later amended complaint says the appeal in the earlier action was dismissed on the plaintiffs’ motion. | This is the later pleading’s account of the appeal’s status, not a decision on the merits of severance entitlement. Amended complaint. |
| January 30, 2026 | Plaintiffs filed an amended complaint in a later Northern District of California case against Musk and X. | The complaint renews ERISA allegations and seeks monetary and injunctive relief. These are allegations and requested remedies, not findings by a court. Amended complaint. |
| April 14, 2026 | The plaintiffs’ counsel case page lists an opposition to defendants’ motion to dismiss in the later case. | The page identifies a filing, not the court’s decision on the motion. Counsel’s case page. |
The available case page lists the April 14, 2026 opposition but does not establish a later ruling on the motion. The tentative-settlement report and the later case are separate procedural developments; neither should be treated as proof that the July 2024 court found the alleged benefits were or were not owed.
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How is the Delaware case different?
A separate Delaware action involved a different legal route. In 2025, the court rejected employees’ argument that they could enforce severance terms in the Twitter merger agreement as third-party beneficiaries, while allowing a separate contract claim based on direct communications to proceed past dismissal. That case addressed distinct claims and does not change what the California court decided about ERISA. Read the Delaware court’s decision.
What the ruling means for former employees
The outcome turned on how the plaintiffs framed and supported their ERISA theory, not on a broad ruling that severance disputes are invalid. For employees evaluating a severance disagreement, the practical questions remain specific to the documents and claims involved: what the employer promised, how the alleged plan was administered, and which legal theory applies. This ruling alone does not answer those questions for other workers or other lawsuits.
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