Probably true on both counts, but I feel this is another of times Elon either acted against the advice of his lawyers, or was advised after he did it without consulting anyone.
I’m sure you’re right. The definition of ‘cause’ is likely to be very narrow indeed, and probably requires that the conduct is practically a crime.
JoshL
1612
I haven’t read the contracts (and probably wouldn’t understand them if I did), but California is an “at-will” work state. That means you can quit your job at any time with no notice for any or no reason, and your employer can fire you with no notice, at any time, for any or no reason (except for certain disallowed reasons like you can’t fire someone because they’re Black, for example).
However, large companies generally don’t take advantage of this because it opens them up to unlawful termination lawsuits. Generally they wait until they are doing a layoff of 50+ people, which makes it clear that people were laid off due to general conditions, not anything specific to that employee.
Presumably, the executive’s contracts were written so that if they were fired for no reason (which is totally legal), they would get their parachutes. “For cause” is just a way of saying they were fired for a a reason which doesn’t activate that clause; generally speaking “for cause” always means “you were shitty at your job”, which may or may not include actual illegal behavior. When California corporations do this, they usually have the employee’s manager document the employee’s behavior for many months before actually terminating them, so when the employee inevitably sues for unlawful termination, they have something to show that the termination was justified.
In this case, since, as far as I know, nobody was planning on firing these executives before Elon took over, there’s probably no specific documentation, so I’d guess Elon is going to have a hard time defending against the unlawful termination lawsuits. But, I’m not a lawyer. Who knows.
Probably doesn’t take an employment lawyer or actual reading of the contracts to surmise Musk does not have justification for firing for cause when he’s owned the company for all of a couple days.
This is correct but also probably irrelevant. The execs aren’t going to sue for wrongful termination. They’re going to sue because these payouts were specific provisions of a formal agreement, which almost certainly spelled out the rules for the terms under which they could be denied the payouts, i.e. what constitutes a for-cause reason to cancel the obligation to pay.
It’s not clear to me whether these are existing agreements the execs had with Twitter, or they are part of the acquisition agreement, but it probably doesn’t matter. In either case, the payments are all but guaranteed so long as the exec avoids a microscopically small range of bad behavior; as I said, usually something that might actually be a crime. Just being bad at their work isn’t going to do it.
If he was clever, cause can be manufactured that fast. All it takes is a management meeting where he trots out batshit insane demands and provokes them into documented (this is key) pushback about how they don’t do X or can’t do Y.
However, this being Musk, I suspect it was as ready-fire-aim as the rest of his brilliant Twitter takeover plan.
This would IMO be very unlikely to constitute ‘cause’ when it comes to termination payout provisions in an executive contract.
I thought that documented insubordination was generally enough to establish for-cause dismissal, but I freely admit I’ve not personally dealt with a lot of executive compensation contracts. I could be wrong.
I can’t read their agreement, but I’d be surprised if it were that simple to get around it. Nobody would ever be paid. It’s the sort of trick that might work with the serfs, but not with people who have deep pockets and good lawyers.
Honestly, I can’t recall anyone in my entire career being terminated for cause for ‘insubordination’. The business world isn’t really the military. Disagreements happen all the time among exec teams. Either you compromise and work them out, or you let time smooth them over, or you pay someone to go away. You don’t terminate them for cause, because you generally can’t make that stick.
I seem to recall there was at least one high profile FANG insubordination firing in the last few years (maybe even that Twitter security guy, or that Google ethics person), but it’s very hard to see how it would apply here.
“See guys, how I’m trying REALLY hard to save the company budget, but I am just handicapped by these previous employment terms. Surely you see why we are forced to renegotiate everyone’s terms and compensation.”
LeeAbe
1623
The changes are beginning. It sounds like verification is going to be included in Twitter Blue, and it is going up in price.
JonRowe
1624
Hell yeah.
The current verification system is an absolute stupid system catering to the influential, and creates a sort of caste system of interaction on the site.
It is arguably why it is so popular, because the blue check crowd get perks beyond the typical user. These perks likely are what attract these influential users to the site. They get to stand out, get preferential filtering options, and faster support.
Making them pay for that service is great, as it adds an actual revenue stream to the platform, but it might kill the platform as these power users will scoff at having to pay for their extra features, and having “normals” with the same power as them.
It is a nice way to democratize the platform as well, because smaller accounts like local businesses or journalists can get verified as well.
The current verification system is completely contrary to the stated aims of the system. It is currently a status symbol of clout, and not really a verification platform. You can already see the gnashing of teeth with the verified crowd, and as a spectator, it is hilarious.
It will probably be the death of the platform though, because it attracts the influential by specifically catering to them.
I would suspect there will be a “verified+” system or something I. The works too.
I suspect verification under the new system will be “the funds transferred” rather than the current half-to-three quarters assed “yep, they’re who they say they are”.
This is Musk we’re talking about after all.
Seems like it is changing to a more explicit “pay to distribute posts” model, which I would have guessed to put it at risk of being classified as a publisher losing any veneer or common carrier?
LeeAbe
1627
And there I thought it was just a way to see if this real semi-famous person was not some rip off alt pretending to be them.
JonRowe
1628
I mean it still will, if they don’t change how verification works. You have to provide ID to be verified. You just have to be famous enough to even get the opportunity. People who impersonate accounts lose verification now.
LeeAbe
1629
Already seeing people like small app developers say that’s too rich for them. Then again, I guess they don’t really need it.
/cdn.vox-cdn.com/uploads/chorus_asset/file/23926016/acastro_STK050_07.jpg)
