Former Twitter executive, Nick Caldwell, has filed a lawsuit against Elon Musk and X, alleging a breach of contract and failure to pay severance and benefits he was owed after resigning from the company in 2022.
Allegations of Breach of Contract
In the lawsuit, filed in a California federal court, Caldwell’s attorneys claimed that after Musk’s $44 billion acquisition of Twitter, the company “cheated Mr. Caldwell and other executives out of a combined $200,000,000 in severance benefits by falsely accusing them of misconduct and purporting to fire them for ‘Cause.'”
This lawsuit mirrors a similar one filed by former Twitter executives, including ex-CEO Parag Agrawal, who claim they are owed $128 million in unpaid severance.
Caldwell’s Role at Twitter and Current Position
Caldwell, who is now the chief product officer for Peloton and sits on the board of several other tech ventures, previously managed a team of hundreds of engineers at Twitter as general manager of the Red Bird, or core tech, organization.
According to the complaint, Caldwell worked to retain key talent at Twitter up to the completion of the buyout. He then sent a letter to the company on Oct. 28, 2022, indicating that he was resigning “for good reason.” Twitter accepted Caldwell’s resignation, which triggered a “Twitter Change of Control and Involuntary Termination Protection Policy,” for executives leaving the company in good standing, Caldwell’s attorneys argued.
Claims of Unfair Termination
Twitter informed Caldwell that his last day of employment would be Nov. 27, a month after his resignation letter. The company cut off his access to internal systems immediately and didn’t stay in communication with him, the complaint says. By Nov. 27, Twitter was claiming that Caldwell was terminated for cause.
“With no factual basis, Musk simply accused Mr. Caldwell of misconduct as a ploy to evade paying him millions of dollars in severance benefits that Musk/Twitter owed to Mr. Caldwell,” his attorneys wrote.
Demands for Severance Benefits
The lawsuit states that Caldwell is owed around $19.3 million in severance benefits plus interest, and around half a million dollars, which represents the value of restricted stock units that he should have been paid in November 2022, and interest of around $3 million, plus attorneys’ fees.
