Musk's X to face court battle for withholding employee bonuses
What's the story
A United States (US) federal judge has ruled that billionaire Elon Musk's X, formerly known as Twitter, must face a lawsuit filed by employees who claim they were not paid promised bonuses. The lawsuit was initiated in June 2023 by Mark Schobinger, a former senior director of compensation at X, seeking class-action status for former and current employees who didn't receive their 2022 bonuses. This comes after Musk acquired the social media platform in October 2022.
Details
Judge rules in favor of employees
US District Judge Vince Chhabria rejected X's request to dismiss the case, stating, "Twitter's offer to pay him (Schobinger) a bonus in return became a binding contract under California law." X had argued that an oral promise shouldn't be binding and that the case should be heard in Texas. However, the judge decided that California law is applicable in matters questioning whether a contract can be enforced. X is yet to comment on the ruling.
What Next?
Promises made but bonuses not paid
The complaint reveals that after Musk's acquisition was announced in April 2022, numerous employees expressed concerns about their compensation and annual bonuses. In the months leading up to the acquisition, company executives consistently promised that 2022 bonuses would be paid out at 50% of the target. This promise was reiterated after Musk's acquisition, too. Despite these assurances, X allegedly failed to pay out bonuses, which led Schobinger to leave the company in May.
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