Twitter violated contract by failing to pay millions in bonuses, US judge rules

By Kanishka Singh

WASHINGTON (Reuters) – Twitter violated contracts by failing to pay millions of dollars in bonuses that the social media company, now called X Corp, had promised its 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, sued Twitter in June, claiming breach of contract.

Schobinger’s suit alleged that before and after billionaire Musk bought Twitter last year, it promised employees 50% of their 2022 target bonuses but never made those payments.

In denying Twitter’s motion to dismiss the case, U.S. District Judge Vince Chhabria ruled that Schobinger plausibly stated a breach of contract claim under California law and he was covered 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.