HomeNewsElon Musk’s X Faces Lawsuit for Allegedly Withholding Staff Bonuses

Elon Musk’s X Faces Lawsuit for Allegedly Withholding Staff Bonuses

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A federal judge has determined that X, formerly Twitter, must face a lawsuit brought forth by employees who allege that the company failed to fulfill promised bonuses.

The accusations state that X, following its acquisition by billionaire Elon Musk in October 2022, neglected to pay annual bonuses to its staff, contrary to assurances made by executives both before and after the acquisition.

The lawsuit, filed in June 2023 by Mark Schobinger, a former senior director of compensation at X, seeks a class-action suit on behalf of former and current X employees who did not receive their 2022 bonuses.

In a ruling on Friday, US District Judge Vince Chhabria stated, “Twitter’s offer to pay him a bonus in return became a binding contract under California law.”

The complaint reveals that, in the period leading up to Musk’s acquisition of X, company executives consistently assured employees that 2022 bonuses would be disbursed at 50% of the target.

These promises were reiterated even after Musk’s acquisition was completed.

Despite these assurances, X allegedly failed to fulfil the promised bonuses, leading to the lawsuit.

Schobinger departed from the company in May, citing “Twitter’s reneging on various promises it had made to employees, including its failure to pay promised bonuses,” as mentioned in the complaint.

 

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