X Violated Contracts by Withholding Bonuses — US Judge Rules

According to Courthouse News, which first reported the News, a federal judge ruled that social media platform X, formerly known as Twitter, violated contracts by failing to pay millions of dollars in bonuses it had orally promised its employees.

In a lawsuit filed by Mark Schobinger, former senior director of compensation for Twitter, the court found that X breached its contract with Schobinger and other employees.

According to Schobinger, X failed to pay a portion of their 2022 bonuses due in the first quarter of 2023, despite repeated promises from senior executives at the company. 

The bonuses were to be paid to employees who stayed with the company until the first quarter of 2023.

The judge, Vince Chhabria, ruled that California law governs the case and that X’s contrary arguments fail. Schobinger’s claim of breach of contract under California law was valid, and he was covered by a bonus plan.

“Once Schobinger did what X asked, X’s offer to pay him a bonus in return became a binding contract under California law, and by allegedly refusing to pay Schobinger his promised bonus, X violated that contract.”

X’s lawyers argued that the promise was only oral and not a contract and that Texas law should govern the case. However, the judge ruled that California law governs the case and that X’s arguments fail.

This ruling comes as X faces multiple lawsuits from former employees and executives since Elon Musk acquired the company.

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