X owes millions in unpaid bonuses to former employees: US federal court

Twitter, now rebranded as X Corp, violated contractual obligations by not disbursing millions of dollars in promised bonuses to its employees, a federal judge ruled on Friday. Mark Schobinger, Twitter's former senior director of compensation who departed for Elon Musk's enterprise in May, initiated the lawsuit in June, alleging a breach of contract.

Schobinger's legal action contended that Twitter, both before and after its acquisition by Elon Musk last year, committed to providing employees with half of their targeted 2022 bonuses but failed to fulfil this commitment.

In his ruling denying Twitter's motion to dismiss, US District Judge Vince Chhabria determined that Schobinger had presented a credible breach of contract case under California law, stating, "Once Schobinger fulfilled Twitter's stipulations, the promise of a bonus constituted a binding contract. By allegedly reneging on this agreement, Twitter infringed upon its contractual obligations."

While Twitter's legal team contended that the commitment was merely verbal and not legally binding, advocating for Texas law to govern the dispute, Judge Chhabria dismissed these arguments, upholding the applicability of California law.

As X Corp did not respond to requests for comment following the ruling, the company has encountered a series of lawsuits from former personnel since Musk's acquisition, alleging various grievances including age and gender discrimination, as well as inadequate notice preceding significant layoffs. X Corp has consistently refuted these allegations.

(With Reuters inputs)