X Corp, formerly known as Twitter, finds itself in hot waters yet again, this time facing a legal battle over its failure to pay employee bonuses. The U.S.
Schobinger ended his tenure in May after Musk took over X. He brought X’s ineffective management practices to light through the lawsuit.
The District Court has ruled against the social media giant for not fulfilling its financial obligations towards employees with the promised bonuses.
Spearheaded by Mark Schobinger, the former Senior Director of Compensation at Twitter, alleged that the company breached its contractual obligations, thereby suing the company.
This ruling adds to the ongoing hurdles of X, as the social media giant faces an uphill journey since Elon Musk acquired it.
X Corp had promised to pay its employees 50% of the target bonuses in 2022 before Musk acquired it. However, they never made these payments, which brings the turmoil of the employees to the limelight.
X’s Efforts to Dismiss the Case Rejected
Vince Chhabria, the U.S. District Judge, rejected X Corp’s efforts to dismiss the case, focusing on the legal standing.
Once Schobinger did what Twitter asked, Twitter’s offer to pay him a bonus in return became a binding contract under California law. And by allegedly refusing to pay Schobinger his promised bonus, Twitter violated that contract.Vince Chhabria, the U.S. District Judg
The legal debate was primarily based on the application of state laws. For X, their defense largely hinged on the claim that a verbal promise didn’t amount to a contractual agreement that the Texas law should consider.
However, the Judge confirmed that in this case, California law was applicable. The legal consequences on Twitter could be far-reaching, particularly considering its decisions on management and operations.
X Continues to Face Operational Challenges Since Musk’s Acquisition
Ever since Musk’s high-profile acquisition, X continues to find itself in a whirlwind with operational and legal challenges. Former employees and executives have filed a series of lawsuits against the social media giant, complaining of a wide range of issues.
These allegations include discrimination based on gender, disability, and age, along with failing to provide a notice in advance before laying off its employees in hundreds. Thus, the internal restructuring and turmoil in the company become evident.
Twitter has also been sued by several consultants, vendors, and landlords over unpaid bills. While acquiring Twitter, Musk had inherited some of these liabilities.
Three former executives also sued Twitter in Delaware, which includes Parag Agrawal, its ex-CEO. He stated that the company defaulted to reimburse legal fees worth more than $1 million which they incurred while responding to government regulators on various requests.
It is worth noting that under its new leadership, X has disbanded its media relations office. This further makes public relations and communication challenging for the company. The social media platform simply posted a poop emoji in response to a request for comments on this matter.
Given that Twitter has remained silent while responding to these allegations, the current state of its corporate affairs seems to be in dire straits.
