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Twitter acquired Squad, a screen sharing app, in 2020.
Its co-founders Ethan Sutin and Esther Crawford went on to high-ranking roles at Twitter.
Sutin says he's still owed at least $1 million from the acquisition after his unjust firing.
Soon after Elon Musk became involved in the future of Twitter, it began forcing out high-ranking employees and cutting costs by "any means necessary," according to a new lawsuit.
Ethan Sutin, who became an engineering manager at Twitter after the company acquired Squad, an app he co-founded, is suing the platform now named X over his termination in May of last year. He claims that not only was his firing "pretextual," or based on false reasoning to support a predetermined outcome, it was designed to avoid paying him out in full for what he's owed as part of the Squad deal and his subsequent employment.
The actions of Twitter, or X, are "unfortunately, part of a widespread pattern of avoiding its financial obligations," according to the lawsuit filed Friday in a San Francisco court.
Twitter acquired Squad at the end of 2020, in a cash and stock deal worth $36 million, Sutin said. The price of the acquisition has not been previously reported. The other founder of the app is Esther Crawford, who became a director at Twitter after the acquisition. Crawford went viral online after Musk took control of Twitter in late October for a photo showing her in a sleeping bag on the floor of the company's headquarters, as some employees attempted to meet Musk's new "hardcore" demands and keep their jobs. Crawford was let go a few months later.
Squad was a video chat platform founded in 2016 that allowed users to share their screens with other users. It became more popular during the first months of the Covid-19 pandemic when people around the world were forced to avoid in-person work and public gatherings. Squad's rise in popularity "caught the attention" of Twitter, according to the lawsuit, and it was acquired not long after.
Sutin said his termination last year came shortly after Parag Agrawal, Twitter's previous CEO, let go of other high ranking employees and executives. As he was told his firing was "for cause," under the Squad acquisition agreement Twitter said it was not obligated to pay him $1.3 million in cash compensation related to the acquisition or pay him out for more than 80,000 shares of restricted stock. Sutin claims his firing was merely part of an effort at Twitter "to cut costs by any means necessary."
A few weeks before Sutin's termination, Musk had offered to buy Twitter for $44 billion, immediately plunging the company into a now infamously chaotic corporate takeover. Agrawal, still running the company at the time, was already pulling back on expenses by freezing hiring, travel and other costs. Talk of "mass layoffs" was taking place as well, according to the lawsuit.
As soon as Musk officially acquired Twitter, he ousted its entire C-suite including Agrawal. Musk has since claimed the firings were "for cause" and refused to honor large payouts Agrawal and his C-suite were set to receive. He has also refused to pay severance out to rank and file employees whom he's laid off by the thousands.
Sutin's performance reviews were consistently positive, and he was praised by Kayvon Keykpour, one of the executives Agrawal dismissed last May, as "the most productive engineering leader" at the company, according to the lawsuit. Sutin said he led the creation of the "tipping" feature on Twitter, its first creator monetization tool, as well as the underlying payment processing system (using Stripe) that allowed for the creation of Ticketed Spaces, Super Follows and Twitter Blue. Sutin said he also built the application for creators to apply for Ticketed Spaces and Super Follows, and the verification process for NFTs.
When Sutin was let go on May 16 of last year, he was told it was because of "problematic interpersonal conduct," including a "curt and aggressive" manner toward coworkers and making "undue insistent demands" on his teams. Sutin denied all such claims, arguing in detail instances where he was a "manager required to manage" employees, and his actions never met Twitter's own definition of "abusive conduct" in its Respectful Workplace Policy.
In addition to payment of what he is still owed in cash and equity payouts as part of the Squad acquisition, Sutin is asking the court for compensatory damages and an order forcing Twitter to characterize his firing as without cause.
A spokesperson for X could not be reached for comment.
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Read the original article on Business Insider