A federal judge on Friday gave the go-ahead to a lawsuit against social media company X, formerly known as Twitter, in which workers claim the company promised but did not pay millions of dollars in back wages. bonus.
In June, Mark Schobinger, a former senior director of compensation for Twitter who lives in Texas, sued the company, claiming breach of contract under California law. The company has its headquarters in San Francisco.
Mr. Schobinger said that before and after billionaire Elon Musk bought Twitter last year, the company promised employees 50 percent of their targeted bonuses in 2022 if they stayed with the company in the first quarter of 2023. However, the bonuses were never paid, according to the suit.
Mr. Schobinger filed suit on behalf of himself and nearly 2,000 other current and former workers. The amount in the dispute is more than $5 million, according to court records.
In a three page opinion denying the company’s motion to dismiss the case, Judge Vince Chhabria of the US District Court for the Northern District of California ruled that Mr. Schobinger has “plausibly stated a breach of contract claim” under California law.
Mr. stood up. Schobinger that he was covered by the bonus plan and that he remained with the company until the last possible payment 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 his promised bonus, Twitter breached that contract.”
The company’s lawyers argued that the performance bonus plan “is not an enforceable contract, because it provides only a discretionary bonus,” the decision said.
The judge wrote that Mr. Schobinger to implement the discretionary bonus plan but “to enforce Twitter’s alleged subsequent oral promise that employees would, in fact, receive a percentage of the annual bonus contemplated by the plan if they remained with the company. ”
The company argued that an oral promise was not a contract and that Texas law should apply, but the judge found that California law governed the case. But, the judge wrote, “Twitter’s counterarguments all fail.”
The company could not be reached Sunday for comment.
In a statement, Mr. Schobinger’s lawyer, Shannon Liss-Riordan, said he 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 take the case forward, which Twitter is trying to throw out – so it’s not yet a decision on the merits.”
