Judge Rules That Elon Musk’s X Breached Employees’ Contracts By Refusing To Pay Millions In Bonuses

A federal judge has ruled that the social media giant Twitter, now known as X, violated its contractual obligations when it failed to pay millions of dollars in promised bonuses.

The ruling dismisses X’s attempt to have the case dismissed and highlights the company’s breach of agreement with its employees.

The lawsuit was filed by Mark Schobinger, who served as Twitter’s senior director of compensation until his departure in May.

Schobinger claimed that company executives went back on their word and failed to deliver the bonuses that were verbally promised to employees last year. He asserted that both before and after Elon Musk‘s acquisition of Twitter in October, the workforce was assured that they would receive 50% of their target bonuses if they remained with the company until the first quarter of 2023.

Despite this, Schobinger and other employees who stayed past that date were never compensated.

The lawsuit, which represents nearly 2,000 current and former employees, demands damages that exceed $5 million for breach of contract under California law.

Twitter’s legal team argued that the promised bonuses were merely verbal agreements and not legally binding contracts. They also contended that Texas law should govern the case. However, the judge ruled in favor of California law and rejected Twitter’s counterarguments.

Since Musk took over and rebranded the company, Twitter has experienced a decline in advertisers and revenue. Musk’s management style, lenient content moderation policies and controversial posts have deterred some reputable companies from any advertisements on the platform.

Media Matters, a pro-Democratic pressure group, published a report that revealed that ads on Twitter appeared alongside pro-Nazi content. Twitter filed a lawsuit against Media Matters’ report in response and claimed that the group manipulated the platform’s algorithm to create the false appearance of intentional ad placement next to racist content.

In October, Musk suffered another loss when his net worth dropped by $16 billion in just one day.