Elon Musk’s X allegedly failed to pay promised employee bonuses

A lawsuit that accuses Elon Musk’s X of failing to pay employees promised bonuses will move forward. 

A federal judge in California denied a request by X to dismiss the case, stating a former employee “has plausibly stated a breach of contract” against Twitter.

The lawsuit claims that before and after the social media company, formerly Twitter, was acquired by Musk, it promised bonuses to staff, but then refused to pay them. 

The lawsuit was filed in a San Francisco court by Mark Schobinger, who was the company’s senior director of compensation prior to his exit in May. The suit was filed on behalf of himself and about 2,000 other current and former employees who did not receive their 2022 bonuses. 

“Twitter’s offer to pay him a bonus in return became a binding contract under California law,” Judge Vince Chhabria wrote. “And by allegedly refusing to pay Schobinger his promised bonus, Twitter violated that contract.”

In its filing to dismiss the case, X argued that an oral promise should not be binding, and that the case should be heard in Texas rather than California. 

“Twitter’s contrary arguments all fail,” Chhabria added.

The lawsuit is one of many legal disputes between X and its former employees. More than 2,200 arbitration cases were filed against the company by staff alleging the new leadership refused to pay out their promised severance, according to Forbes.