Fired Twitter manager sues over stock-option cancellation

An former Twitter Inc. manager fired as part of billionaire Elon Musk’s revamping of the social-media platform after he bought it earlier this year claims the company improperly canceled some stock options he had.

Fired Twitter manager sues over stock-option cancellation. (Bloomberg)

An former Twitter Inc. manager fired as part of billionaire Elon Musk's revamping of the social-media platform after he bought it earlier this year claims the company improperly canceled some stock options he had.

John Barnett, whose Chroma Labs start-up was bought by Twitter, argues the company violated a restricted-stock agreement he got in the Chroma buyout, according to a Delaware Chancery Court lawsuit unsealed Wednesday.

Barnett, a staff-product manager, was terminated by email in November after expressing support for other colleagues fired in Musk's efforts to cut costs. He claims Twitter is losing $4 million per day. The lawsuit was originally filed Dec. 16.

“Twitter wrongfully cancelled Barnett's” options in violation of the pact linked to the Chroma deal, “which caused Barnett to suffer, and continue to suffer, irreparable harm,” according to the 23-page complaint. Twitter officials didn't immediately return an email for comment sent Wednesday after regular business hours.

The suit is among a number of legal actions taken by former Twitter employees who were fired after Musk took over the company in October. Some of Barnett's ex-colleagues contend in a California suit Twitter failed to give proper layoff notices and is shortchanging them on severance pay.

After Musk bought the social media company for $44 billion, he fired half the workforce, asked some essential employees to return, rolled back its expansive work-from-home policy, and called on workers to sign a pledge to remain “extremely hardcore” at Twitter or quit. He's threatened to put the company into bankruptcy because of more than $3 billion in losses.

Chroma Labs Deal

Barnett – an ex-Facebook programmer best known for creating apps with photo and video-editing features – joined Twitter in 2020 as part of the Chroma Labs acquisition. As part of the deal, he was awarded Twitter stock options that couldn't be canceled unless he was fired for wrongdoing, according to the Delaware suit. The number of options were blacked out in the suit.

Under the agreement, Barnett was supposed to be able to get $54.20 per unvested option, the suit said. That's what Musk paid Twitter shareholders for their stock when he acquired the company.

After Barnett expressed support for Eric Frohnhoefer, a Twitter software engineer fired after getting into a public spat with Musk over the app's alleged slowness in some countries, the manager said Twitter sent his termination notice to his wife's email address. “Twitter never sent this email to Barnett himself,” his lawyers said. Barnett's wife wasn't a Twitter employee, they added.

That notice said any unvested options would be canceled as part of the company's decision to fire Barnett, according to the suit. Barnett wants a Delaware judge to order Twitter to abide by the terms of the stock-award agreement and pay him for his unvested options.

The case is John Barnett v. Twitter, 2022-1163, Delaware Chancery Court (Wilmington).