Twitter breaches contract by failing to pay multi-million dollar bonus, US judge rules By Reuters
© Reuters. FILE PHOTO: Twitter’s new logo is seen in this picture taken on July 24, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
Kanishka Singh
WASHINGTON (Reuters) – Twitter breached its contract when the social media company, now called X Corp, failed to pay millions of dollars in bonuses it had promised to employees, a federal judge ruled on Friday.
Mark Schobinger, who was Twitter’s senior director of compensation before leaving Elon Musk’s company in May, filed a lawsuit against Twitter in June, alleging breach of contract.
Schovinger’s lawsuit alleges that billionaire Musk promised to pay employees 50% of his target 2022 bonuses before and after acquiring Twitter last year, but never paid them.
In denying Twitter’s request to dismiss the case, U.S. District Judge Vince Chhabria ruled that Schobinger plausibly made a breach of contract claim under California law and was covered by the bonus plan.
“Twitter’s offer to pay Schöbinger a bonus after he did as Twitter demanded constituted a binding contract under California law,” the judge said. “By refusing to pay Schöbinger the promised bonus, Twitter violated that contract.” “I did,” he said.
X no longer has a press office. The company did not immediately respond to a request for comment on the X account outside business hours.
Twitter’s lawyers argued that the company only made a verbal promise, not a contract, and that Texas law should govern the case, according to Courthouse News, which first reported the ruling. The judge ruled that California law applies in the case and that “all of Twitter’s claims to the contrary fail.”
X has faced numerous lawsuits from former employees and executives since Musk took over the company and eliminated more than half of its employees.
The lawsuit made various claims, including that X discriminated against older employees, women, and disabled workers and failed to provide advance notice of mass layoffs. The company denies any wrongdoing.
