A tentative deal to end a proposed class action against X Corp. and Elon Musk alleging Twitter Inc. ex-workers are owed some $500 million in severance has hit a stumbling block, with attorneys representing individual ex-employees disputing how to proceed in federal court in dueling briefs.

Attorneys with Lichten & Liss-Riordan PC and Sanford Heisler Sharp McKnight LLP outlined divergent views of how the former employees' dispute seeking additional severance benefits should proceed. The briefs responded to an order from U.S. District Judge Trina L. Thompson docketed Nov. 14.

Judge Thompson asked the plaintiffs' attorneys from different firms for briefing by Thursday on how to move forward on a motion from Sanford Heisler to withdraw as counsel, which comes after Twitter ex-workers Courtney McMillian and Ronald Cooper retained Lichten & Liss-Riordan in October. McMillian and Cooper sued on behalf of a proposed class of former Twitter employees in July 2023, appealing to the Ninth Circuit after a California federal court in July 2024 tossed allegations that X and Musk violated the Employee Retirement Income Security Act by stiffing workers on severance.

A complicating factor stems from how a settlement in principle was reported in August, when the ex-workers were solely represented by Sanford Heisler, to the Ninth Circuit, not the federal district court. The Ninth Circuit is now considering a motion to intervene in the appeal by Sanford Heisler attorneys — representing different members of the proposed class that was previously led by McMillian and Cooper.

Judge Thompson asked in her order Nov. 14 for parties to answer in their briefs whether deferring a motion to withdraw from Sanford Heisler, which sought to intervene at the Ninth Circuit in October on behalf of other class members, would slow down the case or prejudice McMillian and Cooper.

McMillian and Cooper said in a brief filed on Wednesday that there was no reason for delaying the federal district court's consideration of the withdrawal motion from Sanford Heisler. That's because they substituted Lichten & Liss-Riordan with Sanford Heisler as their counsel in October at the Ninth Circuit, and the two ex-workers no longer wished to represent a proposed class, they said. Instead, they wanted to pursue their severance claims against Twitter's successor companies and Musk individually, McMillian and Cooper said in their brief.

McMillian and Cooper in Wednesday's brief also said they were seeking additional relief from the Ninth Circuit to clarify there was no settlement. That was in response to "widespread misreporting in the press that this case had settled for $500 million," they said.

"In fact, no such settlement existed, and plaintiffs were very concerned that former putative class members were confused by this misreporting, which would lead them to think there was nothing further they needed to do in order to recover on their claims that Twitter owed them severance payments that had been promised but never paid," the Wednesday brief from the two ex-workers said.

In a brief filed late Thursday, Sanford Heisler told the federal district court there would be minimal delay from waiting for the Ninth Circuit to make a move on the firm's intervention motion before deciding the motion to withdraw.

"It is appropriate to hold the motion to withdraw in abeyance until the Ninth Circuit rules on the pending motions to intervene. Doing so will enable the court to assess whether granting the motion to withdraw will prejudice potential class members," Thursday's brief from Sanford Heisler said.

Kate Mueting of Sanford Heisler said in a statement to Law360 on Thursday: "We remain committed to pursuing class-wide relief on behalf of the employees terminated in the wake of Elon Musk's takeover of Twitter."

Counsel for the proposed class with Lichten & Liss-Riordan didn't immediately respond to a request for comment. Representatives of X Corp. and Musk didn't immediately respond to requests for comment.

McMillian, Cooper and the proposed class are represented by Shannon Liss-Riordan of Lichten & Liss-Riordan PC and by Kate Mueting, Charles Field and Kristi Stahnke McGregor of Sanford Heisler Sharp LLP.

X and Musk are represented by Mark A. Feller, Melissa D. Hill, Jared R. Killeen and Sean K. McMahan of Morgan Lewis & Bockius LLP.

The district case is McMillian et al. v. Musk et al., case number 3:23-cv-03461, in the U.S. District Court for the Northern District of California. The appeal is McMillian et al. v. Musk et al., case number 24-5045, in the U.S. Court of Appeals for the Ninth Circuit.