Elon Musk’s X Violated Contract By Failing To Pay Millions In Bonuses To Employees

Twitter (now called X) violated contracts by failing to pay millions of dollars in bonuses to employees, a federal judge in the United States ruled on Friday.

Twitter, now called X Corp, had promised its employees millions of dollars in bonuses. However, the social media company never made those payments. 

Vince Girdhari Chhabria, the Judge of the United States District Court for the Northern District of California, said that Twitter violated the contract. However, Twitter’s lawyers argued that the social media company made only an oral promise and not a written contract.

What happened to Twitter employees?

Mark Schobinger, who was Twitter’s senior director of compensation, sued the social media company in June, claiming breach of contract. He said that the social media company promised employees 50% of their 2022 target bonuses but never made those payments.

U.S. District Judge Vince Chhabria said that Mark Schobinger was covered by a bonus plan. The Judge said, “Once Schobinger did what Twitter asked, Twitter’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, Twitter violated that contract.” Subsequently, Twitter’s lawyers said that Texas law should govern the case. 

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Lawsuit against X

Social media company X (previously called Twitter) has been hit with various lawsuits by former employees since tech billionaire Elon Musk bought the social media company and fired more than half of its workforce.

Former employees alleged that social media company X discriminated against employees, female employees and workers with disabilities. The employees also alleged that X failed to give advance notice of mass layoffs to workers.

In June, social media company X, owned by tech billionaire Elon Musk, was sued for $250 million by the National Music Publishers’ Association (NMPA) in the United States for infringing on around 1,700 copyrights of the association.