Washington:
Twitter breached contracts by not paying out millions of dollars in bonuses that the social media company, now called X Corp, had promised its employees, a federal judge ruled Friday.
Mark Schobinger, Twitter's senior compensation director before leaving Elon Musk's company in May, sued Twitter in June for breach of contract.
Schobinger's lawsuit alleged that billionaire Elon Musk bought Twitter last year, promising employees 50% of their target bonuses for 2022, but never made those payments.
In denying Twitter's request to dismiss the case, U.S. District Judge Vince Chhabria ruled that Schobinger had plausibly asserted a breach of contract claim under California law and that he was covered by a bonus plan.
“When Schobinger did what Twitter asked, Twitter's offer to pay him a bonus in return became a binding contract under California law. And by allegedly refusing to pay Schobinger his promised bonus, Twitter breached that contract,” wrote the judge.
X no longer has a media relations office. The company did not immediately respond to a request for comment on its after-hours X account.
Twitter's lawyers argued that the company had only made a verbal promise that was 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 governed the case and that “Twitter's opposing arguments all fail.”
X has been hit with numerous lawsuits from former employees and executives since Elon Musk bought the company and cut more than half of its workforce.
The lawsuits make a series of claims, including that X discriminated against older workers, women and workers with disabilities and failed to provide advance notice of mass layoffs. The company denies wrongdoing.
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