A federal judge on Friday gave the green light to a lawsuit against social media company X, formerly known as Twitter, in which workers claim the company promised but never paid millions of dollars in bonuses.
In June, Mark Schobinger, a former senior director of compensation at Twitter who lives in Texas, sued the company, alleging breach of contract under California law. The company is based in San Francisco.
Schobinger said that both before and after billionaire Elon Musk bought Twitter last year, the company had verbally promised employees 50 percent of their expected 2022 bonuses if they stayed with the company in the first quarter of 2023. However, the bonuses were never fulfilled. paid, according to demand.
Mr. Schobinger filed the lawsuit on his own behalf and on behalf of nearly 2,000 other current and former workers. The amount in dispute is more than $5 million, according to court records.
In a three-page opinion In 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 presented a claim for breach of contract” under California law.
Mr. Schobinger maintained that he was covered by the bonus plan and had remained with the company until the last possible pay date.
“Once Schobinger did what Twitter asked, Twitter's offer to pay him a bonus in return became a binding contract under California law,” the judge wrote. “And by allegedly refusing to pay Schobinger the promised bonus, Twitter breached 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,” according to the ruling.
The judge wrote that Schobinger was not suing to enforce the discretionary bonus plan but “to enforce Twitter's subsequent alleged oral promise that employees would, in fact, receive a percentage of the annual bonus contemplated in the plan if they remained at the company. “
The company argued that an oral promise was not a contract and that Texas law should apply, but the judge determined that California law governed the case. But, the judge wrote, “all of Twitter's counterarguments fail.”
The company could not be reached for comment Sunday.
In a statement, Schobinger's attorney, 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. “We can now move forward with the case, which Twitter was trying to dismiss, so it is not yet a ruling on the merits.”
