Lawsuit Claiming X Didn’t Pay Promised Bonuses To Proceed

Millions are at stake in a suit filed last June by Mark Schobinger, Twitter’s former head of compensation, Business Insider reports. Schobinger accuses the company of failing to pay annual bonuses promised immediately before Elon Musk took over and again after he bought Twitter and took it private.  

According to the lawsuit, Twitter’s management promised employees they would be paid half their 2022 annual bonus if they stayed with the company during Musk’s takeover, finalized in October 2022.

Plaintiff Schobinger said he was covered by the bonus plan and that he had stayed with the company through the final possible payout date.

Judge Vince Chhabria rejected a motion from lawyers for the company, now re-named X, arguing that X wasn’t bound by verbal contracts between Schobinger and the former management.

 “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 ruled.

Musk’s lawyers countered that the verbal contract was not valid under Texas law, where they claimed the case should be tried. Judge Chhabria ruled that the case would be governed by California law, and, regardless of state law, all claims for dismissal “failed.”

In a statement plaintiff’s attorney Shannon Liss-Riordan shared with Business Insider, she said the bonuses owed to about two thousand employees amounted to “tens of millions of dollars.”