(CTN News) – A federal judge ruled on Friday that Twitter, now called X Corp, violated contracts by failing to pay millions of dollars in bonuses that it, Mark Schobinger, formerly senior director of compensation, filed a lawsuit against the company for breach of contract after he departs from Elon Musk’s organization in May.
Schobinger’s lawsuit claimed that Twitter had promised employees 50% of their 2022 target bonuses, but never made those payments. The U.S.
District Judge Vince Chhabria denied the motion to dismiss the case, stating that Schobinger had plausibly stated a breach of contract claim under California law and was covered by a bonus plan.
The judge concluded that Twitter’s offer to pay Schobinger a bonus became a binding contract once he fulfilled what had been promised to its employees.
In Junecompany’s requirements, and by allegedly refusing to pay him the promised bonus, Twitter violated that contract.
X’s media relations office is no longer in operation. The company did not promptly respond to a request for comment on its X account outside of regular business hours.
According to Courthouse News, Twitter’s legal team argued that the company had only made an oral promise that did not constitute a contract.
They also contended that the case should be governed by Texas law. However, the judge ruled that California law would apply and dismissed Twitter’s arguments.
Since Musk acquired the company and downsized its workforce by over 50%, X has faced numerous lawsuits from former employees and executives.
These lawsuits allege various claims, such as age and gender discrimination, as well as failure to provide advance notice of mass layoffs. X denies any wrongdoing.