A federal judge in Washington has ruled that Twitter, now operating under the name X Corp, breached contracts by failing to fulfill promised bonuses worth millions of dollars for its employees, according to a decision made on Friday.
Mark Schobinger, Twitter’s former senior director of compensation, who departed from the company after Elon Musk’s acquisition last year, filed a lawsuit in June alleging breach of contract. Schobinger claimed that despite assurances by Twitter, now known as X Corp, to pay employees 50% of their 2022 target bonuses, these payments were never made.
In response to Twitter’s motion to dismiss the case, U.S. District Judge Vince Chhabria rejected the motion, asserting that Schobinger had validly presented a breach of contract claim under California law, being covered by a bonus plan.
Judge Chhabria outlined that once Schobinger fulfilled Twitter’s requirements, the offer made by Twitter to pay him a bonus constituted a binding contract under California law. By allegedly failing to deliver Schobinger’s promised bonus, Twitter/X Corp was deemed to have violated that contract.
Although X Corp no longer maintains a media relations office and did not immediately respond to a request for comment, the company is facing a series of legal actions from former employees and executives following Musk’s acquisition. These lawsuits encompass various claims, including allegations of discrimination against older employees, women, and workers with disabilities, as well as accusations of insufficient notice regarding significant layoffs. X Corp has consistently denied any wrongdoing.
Twitter’s legal defense argued that the promise made was solely oral and not legally binding as a contract, advocating for Texas law to govern the case. However, the judge determined that California law should apply and dismissed Twitter’s arguments against this decision.
