Twitter Found Guilty of Violating Legal Expense Duties by Delaware Court
Former Twitter CEO Parag Agrawal, along with former lead policy officer Vijaya Gadde, have won a legal battle against their previous employer. Delaware Chancery Court Judge Kathaleen St. J. McCormick ruled in favor of Agrawal and Gadde, stating that Twitter had violated its duties to cover their legal expenses.
The controversy began in April when Agrawal and Gadde filed a lawsuit against Twitter, accusing the company of failing to pay for their legal bills. This included bills for Gadde’s appearance before the House Committee on Oversight and Reform. According to Bloomberg, Twitter has only paid approximately $600,000 of the owed amount. The company’s lawyer claimed that Twitter officials were surprised and taken aback by the “quite excessive” $1.1 million legal bill from Gadde’s attorneys.
Despite acknowledging that $1.1 million is a significant sum, Judge McCormick ruled in favor of the former Twitter executives. She stated, “I have reviewed the amount in question, and although it is high and probably higher than most humans would like to pay, it’s not unreasonable,” as reported by Bloomberg.
This ruling highlights the obligation of companies to cover legal expenses for their executives, particularly when the expenses arise from their work for the company. Failure to do so can result in legal consequences, as seen in this case.
Twitter’s legal battle with Agrawal and Gadde raises questions about how companies handle legal bills and their responsibilities toward their executives. It remains to be seen how this ruling will impact future cases and the practices of other companies in similar situations.
This situation serves as a reminder for companies to carefully assess their duties and obligations towards their executives and ensure they fulfill their responsibilities, including covering legal expenses incurred during the course of their work. Failing to do so may result in legal battles and reputational damage.