Musk Faces Trial For Axing X Workers' Bonuses

A federal judge has ruled that X, formerly Twitter, must face a lawsuit after staff accused the company of failing to pay bonuses promised to them.

The suit is seeking class action status for former and current X employees who did not receive their 2022 bonus. I Photo: Elon Musk X

The judge has denied X’s motion to dismiss the case, as reported by Catherine Thorbecke for CNN Business.

X stands accused of failing to pay out annual bonuses to staff after its October 2022 acquisition by billionaire Elon Musk – despite repeated assurances from executives in the lead-up to and following the deal that the company would do so, according to a lawsuit filed in June 2023 on behalf of employees.

The lawsuit was filed in a San Francisco federal court by Mark Schobinger, who was a senior director of compensation at X until he left the company in May. The suit is seeking class action status for former and current X employees who did not receive their 2022 bonus.

A federal judge late last week said Schobinger’s case against X was plausible, and he allowed it to go forward.

“Twitter’s offer to pay him a bonus in return became a binding contract under California law,” US District Judge Vince Chhabria said in a ruling Friday.

In its motion to dismiss, X had argued that an oral promise should not be binding and that the case should be heard in Texas. But the judge said in matters questioning whether a contract can be enforced, California law applies.

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