Lawsuit Against Twitter Over Unpaid Bonuses Receives Green Light from Judge

A federal judge has given approval for a Lawsuit Against Twitter, in which employees claim they were promised but never received millions of dollars in bonuses. The former senior director of compensation for Twitter, Mark Schobinger, filed the lawsuit in June, alleging breach of contract. According to the suit, Twitter orally promised employees 50 percent of their 2022 targeted bonuses if they stayed with the company in the first quarter of 2023, but failed to pay them.

The judge ruled that Schobinger had plausibly stated a breach of contract claim and that Twitter violated the contract by refusing to pay the promised bonus. The lawsuit includes nearly 2,000 current and former workers and involves a disputed amount of over $5 million.

Background

About the Lawsuit Against Twitter

A lawsuit has been filed against the social media company X, formerly known as Twitter, by former workers who claim that the company promised but never paid millions of dollars in bonuses. The lawsuit alleges breach of contract under California law.

Amount in Dispute

According to court records, the amount in dispute is greater than $5 million. The bonuses were orally promised to nearly 2,000 current and former workers of X.

Judge’s Opinion

Judge Vince Chhabria of the U.S. District Court for the Northern District of California denied the company’s motion to dismiss the case. In a three-page opinion, the judge ruled that the plaintiff had “plausibly stated a breach of contract claim” under California law.

Plaintiff’s Claims

Promised Bonuses

The plaintiff, Mark Schobinger, a former senior director of compensation for Twitter, alleges that the company orally promised employees 50 percent of their 2022 targeted bonuses if they stayed with the company in the first quarter of 2023. However, the bonuses were never paid, according to the lawsuit.

Breach of Contract

Schobinger claims that by not fulfilling its promise to pay the bonuses, Twitter breached its contract with the employees. He argues that once he fulfilled the conditions set by Twitter, the promise became a binding contract under California law.

Binding Contract

Schobinger asserts that by allegedly refusing to pay him the promised bonus, Twitter violated the binding contract it had entered into with him and other employees. He contends that the oral promise made by the company created a contractual obligation to pay the bonuses.

Company’s Defense

Discretionary Bonus

The company’s defense argues that the performance bonus plan was not an enforceable contract because it only provided for a discretionary bonus. They contend that the company had the discretion to decide whether or not to pay the bonuses.

Oral Promise Argument

The company claims that an oral promise cannot be considered a contract. They assert that any oral promises made were not intended to create a legal obligation to pay the bonuses.

Texas Law vs. California Law

Twitter’s defense team argues that Texas law should apply to the case instead of California law. However, the judge ruled that California law governed the case and rejected Twitter’s arguments.

Judge’s Ruling

Plausibility of Breach of Contract Claim

Judge Chhabria found that the plaintiff had presented a plausible breach of contract claim under California law. The judge agreed with Schobinger’s argument that once he fulfilled the conditions set by Twitter, a binding contract was formed.

Enforcement of Oral Promise

Contrary to Twitter’s argument, the judge ruled that the plaintiff was not seeking to enforce the discretionary bonus plan. Instead, he sought to enforce Twitter’s alleged subsequent oral promise to pay the bonuses if employees stayed with the company. The judge determined that the oral promise could be enforced as a contract.

Choice of California Law

Despite Twitter’s argument that Texas law should apply, the judge decided that California law governed the case. He found that Twitter’s contrary arguments failed to hold up.

Impact and Next Steps

Pleased with Judge’s Decision

In a statement, Mark Schobinger’s lawyer expressed satisfaction with the judge’s decision. She stated that the court denied Twitter’s motion to dismiss the claim of failure to pay promised bonuses to continuing employees.

Moving Forward with the Case

With the judge’s ruling denying the motion to dismiss, the case will continue forward. The plaintiff will have the opportunity to present evidence and arguments supporting their claim of breach of contract.

Not Yet a Ruling on the Merits

It is important to note that the judge’s decision to proceed with the case is not a ruling on the merits. It does not determine whether or not Twitter is indeed obligated to pay the promised bonuses. The case will need to be fully litigated before a final decision can be made.

Conclusion

The lawsuit against Twitter over unpaid bonuses has been given the go-ahead by a federal judge. The judge ruled that the plaintiff presented a plausible breach of contract claim under California law and that the oral promise made by the company could be enforced as a contract. While this is a victory for the plaintiffs, it is crucial to remember that the judge’s decision to proceed with the case is not a ruling on the merits. The case will continue, and both parties will have the opportunity to present their arguments and evidence before a final decision is reached.

Related site – Twitter violated contract by failing to pay millions in bonuses…. (REUTERS)

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