US judge finds Twitter breached contract by not paying millions of dollars to employees

A federal judge determined Friday that Twitter had breached contracts by neglecting to pay millions of dollars in bonuses that the social media company—now known as X Corp—had promised its workers.

As per reports, before leaving Elon Musk’s company in May, Mark Schobinger served as Twitter’s senior director of compensation. In June, he filed a lawsuit against the company, alleging breach of contract.

According to Schobinger’s lawsuit, Twitter promised its staff 50% of their 2022 target bonuses both before and after the billionaire Musk purchased the company last year, but it never fulfilled this promise.

U.S. District Judge Vince Chhabria denied Twitter’s move to dismiss the case, finding that Schobinger had a valid claim of breach of contract under California law and that the claim was supported by a bonus plan.

“Once 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 violated that contract,” the judge wrote.

X no longer has a media relations office. The company did not immediately respond to a request for comment to its X account outside business hours.

Twitter’s lawyers argued that the company made only an oral 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 contrary arguments all fail.”

X has been hit with numerous lawsuits by former employees and executives since Musk bought the company and culled more than half of its workforce.

The lawsuits make a range of claims, including that X discriminated against older employees, women and workers with disabilities, and failed to give advance notice of mass layoffs. The company denies wrongdoing.

(with inputs from Reuters)