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Judge rules lawsuit against X over unpaid staff bonuses can proceed

Elon Musk’s social media X

A federal judge has approved a lawsuit against X, which accuses the social media giant of failing to deliver promised staff bonuses worth millions of dollars. 

Former senior director Mark Schobinger filed the suit in June, alleging a breach of contract under California law.

Mr Schobinger said Twitter orally assured employees of receiving 50 percent of their 2022 targeted bonuses if they remained with the company in Q1 2023.

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The company promised this both before and after Elon Musk's acquisition last year. 

However, the bonuses were reportedly never awarded.

Covering nearly 2,000 current and former employees, the dispute surpasses $5 million, according to court records. 

In a three-page ruling, Judge Vince Chhabria of the US District Court for the Northern District of California rejected Twitter's motion to dismiss, asserting that Schobinger had "plausibly stated a breach of contract claim."

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The judge ruled that, under California law, Schobinger's fulfillment of Twitter's conditions established a binding contract, stating, "Once Schobinger did what Twitter asked, Twitter’s offer to pay him a bonus in return became a binding contract."

Twitter had argued that the performance bonus plan wasn't an enforceable contract due to its discretionary nature.

However, the judge refuted the claim, clarifying that the lawsuit focused on enforcing Twitter's alleged oral promise, not the discretionary bonus plan.

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Twitter's contention that an oral promise wasn't a contract and that Texas law should apply was also dismissed by the judge, who maintained that California law governed the case. 

Schobinger's lawyer, Shannon Liss-Riordan, said: "The court denied Twitter’s motion to dismiss our claim that Twitter failed to pay promised bonuses to continuing employees." 

She clarified that the decision didn't constitute a ruling on the case's merits but allowed it to proceed.

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