Elon Musk’s X Faces Legal Storm As US Judge Rules Against Unpaid Bonuses

In a legal setback for Elon Musk’s media venture, X Corp, a federal judge ruled on Friday that Twitter, now X Corp, violated contracts by not fulfilling promised bonuses for its employees. Notably, Mark Schobinger, former senior director of compensation at Twitter, filed the lawsuit, alleging breach of contract over unfulfilled 2022 target bonuses promised by the social media giant after Musk’s acquisition.

Meanwhile, the ruling raises more legal challenges for X Corp, which is already facing multiple lawsuits since Musk’s takeover.

X Corp’s Faces Legal Heat Over Unpaid Bonuses

Elon Musk’s foray into the media industry faces another hurdle as a federal judge rules against X Corp, formerly known as Twitter, in a lawsuit filed by former senior executive Mark Schobinger. The judge found that Twitter violated contracts by failing to pay millions in promised bonuses to employees, deepening the legal woes for X Corp, Reuters reported.

Meanwhile, Mark Schobinger’s lawsuit, filed in June, accused Twitter of breaching contracts by not delivering on promised bonuses, a claim that gained traction in the eyes of U.S. District Judge Vince Chhabria. Notably, the judge dismissed Twitter’s motion to dismiss the case, stating that Schobinger had plausibly presented a breach of contract claim under California law.

According to the judge, Twitter’s oral promise to pay employees 50% of their 2022 target bonuses became a binding contract under California law once Schobinger fulfilled his responsibilities. In addition, the ruling contradicted Twitter’s argument that the promise was merely oral and not a contract, emphasizing that California law governed the case.

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Legal Tussle Escalates

X Corp, under Elon Musk’s leadership, finds itself entangled in a series of legal battles. The lawsuit by Schobinger adds to the list of grievances, which includes claims of age and gender discrimination, as well as accusations of insufficient notice for mass layoffs.

Meanwhile, the ruling not only signifies a legal setback for X Corp but also sheds light on the complexities surrounding Musk’s acquisitions and the legal ramifications faced by companies under his leadership. As the legal battles intensify, X Corp seems to be navigating troubled waters in the media landscape.

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