X violated contract in withholding millions of dollars in bonuses: US judge

Twitter (now called X) violated a contract when it failed to pay tens of millions of dollars in bonuses to its employees promised after Elon Musk acquired the platform for $44 billion, a US federal judge has ruled.

Mark Schobinger, the former senior director of compensation for X, had filed suit against X on behalf of himself and other current and former X employees in June, reports Courthouse News Service.

In the verdict, US District Judge Vincent Chhabria said that Schobinger stated a breach of contract claim under California law, and that Schobinger was covered by the bonus plan and followed all of X’s directions.

“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,” Chhabria wrote in the judgement.

Schobinger had claimed in the lawsuit that employees were not paid a portion of their 2022 bonuses when they were due in the first quarter of 2023, despite repeated promises from senior executives at the company.

“This bonus was to be paid to employees who stayed with the company until the first quarter of 2023,” according to the report.

X’s lawyers argued that the promise was only an oral promise and was not a contract.

X argued that the performance bonus plan was not an enforceable contract because it provided only for a discretionary bonus.

Chhabria wrote that X’s contrary arguments “all fail.”