A federal judge decided that X, formerly Twitter, will have to settle a case brought by employees who claimed they were not given the incentives they were promised. X’s move to have the lawsuit dismissed was denied by the judge on Friday.
A lawsuit filed in June 2023 on behalf of employees claims that X failed to provide annual bonuses to employees following its October 2022 acquisition by billionaire Elon Musk, despite repeated promises from executives in the run-up to and after the deal that the company would.
Prior to leaving X in May, Mark Schobinger held the position of senior director of compensation. He filed the complaint in a federal court in San Francisco. The lawsuit aims to grant class action status to all current and past X workers who were not paid their bonus for 2022.
Late last week, a federal judge granted permission for Schobinger’s case against X to proceed, finding it to be a credible one.
In a decision on Friday, US District Judge Vince Chhabria stated that Twitter’s commitment to provide him a bonus in exchange “became a binding contract under California law.”
X has essentially eliminated its PR staff, and it did not reply to CNN’s request for comment. The business had claimed that the lawsuit ought to be heard in Texas and that an oral pledge ought not to be enforceable in its move to dismiss. However, the judge declared that California law applies when there is doubt about the enforceability of a contract.
According to the June complaint, “many employees raised concerns” about what would happen to “their compensation and annual bonus” if and when the acquisition closed after it was revealed that Musk was buying the social media company in April of last year.
According to the complaint, firm leaders made repeated promises to employees that 2022 incentives would be paid out at 50% of the target in the months before Musk completed his acquisition of X. The complaint stated that “the promise was repeated following Musk’s acquisition.”
However, the lawsuit claims that X did not pay out bonuses despite the assurances. According to the complaint, Schobinger quit the company in May as a result of “Twitter’s reneging on various promises it had made to employees, including its failure to pay promised bonuses.”
