Monday, May 20

Lawsuit against Twitter over unpaid bonuses gets green light from judge

A federal judge on Friday gave the green light to a lawsuit against social media company X, formerly known as Twitter, in which workers allege the company promised but never paid millions of dollars in bonuses.

In June, Mark Schobinger, a former Twitter senior compensation director who lives in Texas, sued the company, claiming breach of contract under California law. The company has its headquarters in San Francisco.

Schobinger said that both before and after billionaire Elon Musk bought Twitter last year, the company had verbally promised employees 50% of their expected 2022 bonuses if they stayed with the company through the first quarter of 2023. However , the bonuses were never paid, according to the lawsuit.

Mr. Schobinger filed the lawsuit on his own behalf and on behalf of nearly 2,000 other current and former workers. According to court documents, the amount in dispute is more than $5 million.

In a three-page opinion denying the company’s motion to dismiss the case, Judge Vince Chhabria of the United States District Court for the Northern District of California ruled that Mr. Schobinger had “plausibly alleged a breach of contract law” to the under California law.

Mr. Schobinger maintained that he was covered by the bonus plan and remained with the company until the last possible payment date.

“Once Schobinger did what Twitter asked of him, Twitter’s offer to pay him a bonus in exchange became a binding contract under California law,” the judge wrote. “And by allegedly refusing to pay Schobinger the promised bonus, Twitter violated that contract.”

The company’s lawyers had argued that the performance bonus plan “was not an enforceable contract, because it only provides for a discretionary bonus,” the ruling states.

The judge wrote that Mr. Schobinger had not sued to enforce the discretionary bonus plan but “to enforce Twitter’s alleged subsequent oral promise that employees would, in fact, receive a percentage of the plan’s annual bonus if they had remained in the company. “

The company argued that an oral promise was not a contract and that Texas law should apply, but the judge found that the case was governed by California law. But, the judge wrote, “Twitter’s arguments to the contrary all fail.”

The company could not be reached for comment on Sunday.

In a statement, 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,” he said. “Now we can move forward with the case, which Twitter was trying to dismiss, so it’s not yet a ruling on the merits.”