US federal court allows lawsuit against X (formerly Twitter) to proceed. As Business Insider reports, the company is accused of not paying employees the promised annual bonuses.
The lawsuit was filed back in June by Mark Schobinger, the company's former head of compensation, on behalf of him and thousands of other current and former employees.The company is accused of failing to keep oral promises.. They allegedly said that all employees working at X as of January 1, 2023, will be paid a portion of their annual bonuses. According to a document filed with the court, the total amount owed exceeds $5 million. In a statement sent by the plaintiffs' attorney to Business Insider, it is said that the amount of owed bonuses amounts to tens of millions of dollars, and several thousand workers were entitled to them. The judge rejected the appeals of X's lawyers to dismiss the case. The lawyers say the company can't be forced to abide by verbal contracts between Schobinger and former management. The suit alleges that Twitter management promised employees 50% of their annual bonus for 2022 if they stayed with the company during Musk's takeover, which was completed in October 2022.
Annual bonuses are typically paid in the first quarter of the following year, according to Forbes. According to Schobinger, these payments were never received.
Schobinger resigned in May and said the reason was X's reneging on various promises made to employees, including not paying bonuses for 2022.
This decision added to X's other pile of legal problems. The company has faced several lawsuits in recent months over unpaid rent and other services, as well as unsuccessful lawsuits from employees who were fired or who quit shortly after Musk's takeover.
Social network X has faced a significant drop in advertising revenue this year.