Twitter failed to pay millions in bonuses, violating a contract

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

Before departing Elon Musk's firm in May, Mark Schobinger served as Twitter's senior director of pay. In June, he filed a lawsuit against the company, alleging breach of contract. According to Schobinger's lawsuit, Twitter guaranteed its staff 50% of their 2022 goal incentives both before and after the billionaire Musk purchased the company last year, but it never fulfilled this promise.

US District Judge Vince Chhabria denied Twitter's move to dismiss the lawsuit, finding that Schobinger had a valid claim of breach of contract under California law and that he was covered by a bonus scheme. "Twitter's commitment to provide Schobinger a bonus in exchange for complying with its requests became legally enforceable in California after he fulfilled them. Additionally, Twitter allegedly broke that agreement by not giving Schobinger the bonus that was promised," the judge ruled.

There is no longer a media relations office for X. When contacted outside of regular business hours for comment on its X account, the corporation did not immediately reply. Courthouse News was the first outlet to report on the decision. Twitter's attorneys said that the lawsuit should be handled under Texas law as the business had just made an oral commitment that did not constitute a contract. Twitter's opposing arguments are all deemed to be invalid by the judge, who declared that California law applied to the case.

Since Musk acquired the business and fired more than half of its staff, X has been the target of many lawsuits from former executives and workers. Numerous allegations are made in the complaints, such as that X neglected to notify workers in advance of mass layoffs and discriminated against women, older workers, and workers with disabilities. The business disputes any misconduct.