Elon Musk is in the spotlight again after a judge allowed a lawsuit against X, formerly known as Twitter, to proceed. The lawsuit was filed in June by Mark Schobinger, who was formerly senior director of compensation at Twitter/X, on behalf of himself and other employees.
The lawsuit alleges that the company failed to pay employees the bonuses that they were promised before and after Elon Musk acquired Twitter. According to the lawsuit, employees were told "2022 bonuses would be paid out at
fifty percent (50%) of target."
The lawsuit explained that after employees found out that Elon would take over, they were worried about how it would impact their compensation and bonuses. In an attempt to get employees to stay at the company, employees were promised that they would receive their 2022 bonuses.
Mark Schobinger turned down other employment opportunities while working at Twitter/X because he wanted to receive the bonus he was promised. The lawsuit noted that other Twitter employees stayed at the company after Musk acquired it because they counted on receiving their bonuses.
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Employees typically receive their bonuses for the prior year in March if they're still employed by the company. Mark left the company in May of 2023 after the company allegedly refused to pay employees the bonuses they were promised.
Lawyers representing X/Twitter tried to say that the promise to pay bonuses was not an official contract because it was just a promise made verbally. The judge denied X's motion to dismiss the case.
"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," the judge stated.
Controversy surrounding Elon Musk and X is nothing new. After taking over Twitter (now X), Musk fired thousands of employees (about 80% of employees).
In November, after posting something that many said was antisemitic, some advertisers decided to pull their ads from the platform, which Musk labeled as "blackmail."
“If somebody’s going to try to blackmail me with advertising? Blackmail me with money? Go [expletive] yourself. Go. [Expletive]. Yourself. Is that clear?” he said in response.
Monthly ad revenue had already started to decline prior to that, according to Reuters. In October, The New York Times reported that X was worth about $19 billion. Elon Musk bought Twitter for $44 billion.
