The employees had not demonstrated that their claims were covered by federal law, according to Judge Trina Thompson.
The decision is a victory for Mr. Musk, who bought Twitter in 2022 and started implementing reforms right once, which included firing hundreds of employees.
Former employees and suppliers filed many lawsuits in response to the changes, alleging that the business had withheld promised payments.
The former “head of total rewards” at the social media platform, Courtney McMillian, filed this complaint in 2023 in a federal court in San Francisco.
She claimed in the case that the company had promised significantly more substantial benefits, such as at least two months’ salary and payments to health insurance, but had only given employees one month’s worth of pay as severance.
On the grounds that the Employee Retirement Income Security Act of America did not apply as stated, Mr. Musk’s attorneys had asked the judge to dismiss the complaint.
Standards for private health and pension plans are established under the act.
A representative for Ms. McMillian’s team stated, “We are disappointed in the ruling and considering our options for moving forward.”
