Federal judge ruled against X over unpaid bonuses to employees

Over a year after Elon Musk could take over X (formerly known as Twitter), the company still faces lawsuits from former employees and contractors. X was first sued over mass layoffs and unpaid bills. Now, the company is facing another lawsuit over failing to pay bonuses to its employees.

According to Reuters, a federal judge ruled on Friday that X violated contracts by not paying the promised bonuses. The lawsuit against X Corp was filed by the company’s former senior director of compensation, Mark Schobinger, in June. Schobinger left X in May.

The U.S. District Judge Vince Chhabria said Schobinger’s breach of contract claim is based on California law. Schobinger added that Twitter promised to pay 50% of their 2022 target bonuses but never did so before and after Musk’s takeover. “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,” the judge noted.

X fails to pay promised bonuses to its employees, resulting in a lawsuit against the company

After X’s motion to dismiss the case was denied, the company claimed it had an oral promise with the employees over the bonuses, and there was no official contract between them. Additionally, X wants the case to be governed according to Texas law. However, the judge failed X by choosing the California law and adding that “Twitter’s contrary arguments all fail.” X has not yet responded to the requests for comment.

Since Elon Musk’s takeover in October 2022, X has faced multiple lawsuits from former employees over non-compliance with the terms of the contract and discrimination against women and staff with disabilities. X was even sued by its landlord over not paying the rent. As expected, the company denied all the allegations.

Above all, X is now under fire over mishandling the Israel and Hamas war. The European Union alleges that X deliberately allows misinformation to spread and fails to protect users. The strictures of the E.U. have reportedly made Elon Musk think of blocking the platform on this continent.

Regulators worldwide have become more sensitive to the business practices of tech firms and social platforms. Every once in a while, we hear about a multi-million dollar lawsuit against a tech firm in a country outside of the U.S. In a recent case, Meta faced a €5.85 million ($6.45 million) lawsuit in Italy over breaching gambling advertising rules.