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Legal Battle Unfolds as Nick Caldwell Sues Elon Musk and X for Unpaid Severance

Ex-Twitter GM sues Elon Musk and X for breach of contract, claiming $200 million in unpaid severance for executives.

By Jack Wilson

4/3, 18:32 EDT
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Key Takeaway

  • Nick Caldwell sues Elon Musk and X for breach of contract, claiming $200 million in unpaid severance for executives.
  • Caldwell alleges wrongful termination to avoid severance, seeking $19.3 million plus interest and additional benefits.
  • Lawsuit highlights Musk's recruitment of associates to deny severance claims amidst Caldwell's personal tragedy.

Legal Battle Ensues

Former Twitter executive Nick Caldwell has initiated legal action against Elon Musk and X, formerly known as Twitter, citing breach of contract and alleging failure to provide owed severance and benefits. The lawsuit, lodged in a California federal court, accuses the company of depriving Caldwell and other executives of approximately $200 million in severance benefits by falsely alleging misconduct to terminate their employment for 'Cause.' This legal challenge mirrors a similar lawsuit by ex-Twitter CEO Parag Agrawal and other former executives, who assert they are owed $128 million in unpaid severance.

Caldwell's Claims

Nick Caldwell, who now holds the position of chief product officer at Peloton and serves on the boards of various tech ventures, managed a significant engineering team at Twitter as the general manager of the Red Bird organization. His lawsuit details efforts to retain essential talent at Twitter until the completion of Musk's $44 billion acquisition. Caldwell submitted his resignation on October 28, 2022, citing "good reason," shortly after Musk publicized his takeover of Twitter's headquarters. Twitter's acceptance of Caldwell's resignation ostensibly activated a severance policy for executives departing in good standing, yet Caldwell alleges that Twitter ceased communication and unjustly terminated him for cause without a factual basis, aiming to avoid severance payments.

Severance Dispute

The complaint elaborates on the severance dispute, highlighting Musk's recruitment of associates from SpaceX and Tesla to Twitter, some of whom allegedly participated in denying Caldwell's severance claims. Caldwell's legal team asserts he is entitled to approximately $19.3 million in severance benefits plus interest, around half a million dollars representing the value of restricted stock units due in November 2022, and additional interest and attorneys' fees. The defendants named in the suit include Brian Bjelde and Lindsay Chapman of SpaceX, and Dhruv Batura, formerly of Tesla's finance department, alongside Musk.

Personal Tragedy

Amidst the unfolding legal drama, the lawsuit references a personal tragedy for Caldwell, noting the sudden passing of his wife, Tia Caldwell, on October 15, 2022. This event occurred shortly before Caldwell's resignation from Twitter, adding a poignant backdrop to the legal proceedings. Caldwell had shared a tribute to his late wife on social media, celebrating her life and accomplishments.