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Twitter Faces Lawsuit for Allegedly Withholding Millions In Promised Bonuses Under Elon Musk's Owner

Updated: Jan 3

[Edited] In a recent development, a federal judge has ruled that X, formerly known as Twitter, must face a lawsuit filed by staff members who accused the company of failing to pay promised bonuses.

Credits: REUTERS

The judge denied X's motion to dismiss the case, paving the way for a court battle.

The allegations against X state that the company failed to fulfill its commitment to pay annual bonuses to employees following its acquisition by billionaire Elon Musk in October 2022. Despite assurances from executives before and after the deal, the lawsuit, filed in June 2023 on behalf of employees, claims that the bonuses were not paid out.

The lawsuit was brought forward by Mark Schobinger, a former senior director of compensation at X who left the company in May. The suit seeks class action status for both former and current X employees who did not receive their 2022 bonuses.

Late last week, a federal judge deemed Schobinger's case against X plausible and allowed it to proceed. US District Judge Vince Chhabria stated, "Twitter's offer to pay him a bonus in return became a binding contract under California law."

X, which has recently eliminated its public relations team, did not respond to CNN's request for comment. In its motion to dismiss, the company argued that an oral promise should not be legally binding and suggested that the case should be heard in Texas. However, the judge ruled that California law applies when determining the enforceability of a contract.

According to the June complaint, concerns were raised by many employees regarding the fate of their compensation and annual bonuses after the announcement of Musk's acquisition of the social media company in April. The complaint further alleges that X executives repeatedly assured employees that 2022 bonuses would be paid out at 50% of the target, even after Musk's acquisition.

Despite these promises, X allegedly failed to deliver on the bonuses, leading to Schobinger's departure from the company in May. The complaint states that Twitter reneged on various promises made to employees, including the failure to pay the promised bonuses.

As the court battle looms ahead, X will have to face the allegations made by its former and current employees regarding the non-payment of promised bonuses. The outcome of this case will have significant implications for the company and its reputation.

  • X, formerly known as Twitter, is facing a lawsuit filed by employees who claim that the company failed to pay promised bonuses.

  • The federal judge denied X's motion to dismiss the case, allowing it to proceed.

  • The lawsuit seeks class action status for employees who did not receive their 2022 bonuses.

Source: CNN

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