A federal judge ruled on Friday that Twitter, now operating as X Corp, violated contracts by failing to fulfill promised bonuses to its employees, according to a lawsuit filed by Mark Schobinger, the former senior director of compensation at Twitter.
Schobinger claimed breach of contract, asserting that despite assurances, Twitter failed to pay employees 50% of their 2022 target bonuses before and after Elon Musk’s acquisition of the company last year.
U.S. District Judge Vince Chhabria denied Twitter’s motion to dismiss the case, affirming that Schobinger had validly stated a breach of contract claim under California law and was covered by a bonus plan.
The judge emphasized that once Schobinger fulfilled Twitter’s requirements, the promise of a bonus constituted a binding contract under California law. By allegedly reneging on this commitment, Twitter was found to have violated the contract.
Despite the absence of a media relations office for X, the company has not provided a comment on the ruling as of yet.
Twitter’s defense contended that the promise was merely oral and not legally binding and that Texas law should apply. However, Judge Chhabria ruled in favor of California law, stating that Twitter’s counterarguments lacked merit.
Since Elon Musk acquired the company, X has faced multiple lawsuits from former employees and executives, resulting in allegations ranging from age and gender discrimination to lack of notice for mass layoffs. However, X denies any wrongdoing in these cases.