US Judge Rules Twitter Breached Contract by Failing to Honor Bonus Payments

WASHINGTON: Twitter breached 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, alleging breach of contract.

Schobinger’s suit alleged that before and after billionaire Musk bought Twitter last year, it promised employees 50 percent of target bonuses for 2022 but never paid them.

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

“When Schobinger did what Twitter asked, Twitter’s offer to pay him a bonus in return became a binding contract under California law. And by refusing to pay Schobinger the promised bonus, Twitter breached the contract,” the judge wrote.

X no longer has a media relations office. The company did not immediately respond to a request for comment on its X account outside business hours.

Attorneys for Twitter argued that the company only made a verbal 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 governs the case and that “Twitter’s arguments to the contrary fail.”

X has faced several lawsuits from former employees and executives since Musk bought the company and laid off more than half of its workforce.

Several allegations are made in the lawsuits, including that X discriminates against older workers, women and disabled workers and did not provide advance notice of mass layoffs. The company denies any wrongdoing.