Judge Vince Chhabria allows lawsuit against X to proceed
Social media platform X, formerly known as Twitter, is facing a legal battle as employees accuse the company of failing to fulfill promised bonuses, according to a report by CNN. The lawsuit, filed in the San Francisco federal court, alleges 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 to proceed and denied X’s motion to dismiss the case.
The lawsuit claims that “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 class action suit, originally filed in June by X’s former head of compensation Mark Schobinger on behalf of himself and other current and former X employees, alleges that the previous Twitter management verbally assured employees they would receive 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,” said US District Judge Vince Chhabria in a ruling on Friday.
The amount in dispute, according to court records cited by the New York Times, is over $5 million. Annual bonuses are typically paid out in the first quarter of the following year, as stated by Forbes. However, the employees did not receive any bonuses by the end of the first quarter.
In an attempt to dismiss the case, X argued that an oral promise should not be legally binding and suggested the case should be heard in Texas. However, the judge ruled that California law governs the case.
Shannon Liss-Riordan, Mr. Schobinger’s lawyer, expressed satisfaction with the judge’s decision, stating, “The court denied Twitter’s motion to dismiss our claim that Twitter failed to pay promised bonuses to continuing employees. We can now proceed with the case, which Twitter was trying to throw out — so it’s not yet a ruling on the merits.”
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