Employees Sue X Over Failure To Pay Bonuses Amounting To More Than $5 Million

Social media platform X, formerly Twitter, is facing a court battle after staff accused the company of failing to pay bonuses promised to them, CNN reported. According to the lawsuit filed in the San Francisco federal court, the staff alleged that ''Twitter refused to pay employees who remained employed by the company in the first quarter of 2023 any bonus.''

Last Friday, U.S. District Court Judge Vince Chhabria, allowed the lawsuit against the company to move ahead and denied X's motion to dismiss the case. 

''Both before and after Musk's acquisition was completed in October 2022, Twitter's management continuously promised the company's employees, including the plaintiff, that their annual bonus for 2022 will be paid under the Bonus Plan,'' the lawsuit read.

The class action suit was originally filed in June by X's former head of compensation Mark Schobinger on behalf of himself and a slew of other current and former X employees. They claimed that the then-Twitter management had verbally promised employees to pay 50% of their 2022 annual bonus if they remained with the company during Elon Musk's takeover in October 2022.

''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.'' US District Judge Vince Chhabria said in a ruling Friday.

According to the New York Times, the amount in dispute is greater than $5 million, as per court records. The annual bonuses are usually paid out in the first quarter of the following year, per Forbes. But the employees didn't receive any bonuses by the end of the first quarter,

In its attempt to dismiss the case, X argued that an oral promise should not be legally binding and proposed that the case should be heard in Texas. However, the judge found that California law governed the case.

Mr. Schobinger's lawyer, Shannon Liss-Riordan, said she was pleased with the judge's decision.

''The court denied Twitter's motion to dismiss our claim that Twitter failed to pay promised bonuses to continuing employees. We can now go forward with the case, which Twitter was trying to throw out — so it's not yet a ruling on the merits,'' she said.