In a recent legal development, a federal judge delivered a ruling against X Corp, previously recognized as Twitter, stating that the social media giant breached contracts by failing to fulfill promised bonuses totaling millions of dollars for its employees. The legal action, initiated by Mark Schobinger, the former senior director of compensation at Twitter who parted ways with Elon Musk’s company in May, centers around allegations of breach of contract.
Breach of Contract Allegations
Schobinger’s lawsuit, filed in June, outlines Twitter’s commitment, both pre and post its acquisition by Elon Musk last year, to provide employees with 50% of their 2022 target bonuses. Despite these assurances, the company reportedly failed to make the stipulated bonus payments. U.S. District Judge Vince Chhabria, in a significant development, rejected Twitter’s attempt to dismiss the case. Chhabria found Schobinger’s breach of contract claim under California law to be plausible, asserting that he was covered by a bonus plan.
According to the judge, Twitter’s request for specific actions from Schobinger transformed into a binding contract under California law once those actions were fulfilled. The alleged refusal by Twitter to honor the promised bonus was deemed a violation of this contract.
X Corp’s Response and Media Silence
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Notably, X Corp, the current identity of the social media entity, no longer maintains a media relations office. As of the latest report, the company has not responded to requests for comment outside of regular business hours.
Twitter’s legal defense rested on the argument that the company’s commitment was oral and did not constitute a formal contract. Additionally, Twitter sought to apply Texas law to the case. However, Judge Chhabria firmly asserted that California law governed the proceedings and dismissed Twitter’s counterarguments.
In the wake of Elon Musk’s acquisition of Twitter, now X Corp, the company has faced a barrage of legal challenges from former employees and executives. These lawsuits span a range of allegations, including discrimination against older employees, women, and workers with disabilities. Furthermore, grievances include accusations of failure to provide adequate notice regarding mass layoffs. Despite these legal entanglements, X Corp vehemently denies any wrongdoing.
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