Elon Musk's X Faces Lawsuit Over Unpaid Employee Bonuses

X, the popular microblogging site, is currently facing a lawsuit over unfulfilled staff bonuses. Recently, a US federal court judge ruled that the Elon Musk-owned platform violated contracts by failing to pay the annual performance bonuses it orally promised its workers. The federal judge has also rejected X”s motion to dismiss the case.

The lawsuit was initiated by Mark Schobinger, a former senior director of compensation at X, formerly known as Twitter. In the lawsuit, Mark Schobinger accuses the social media giant of failing to distribute annual bonuses following its acquisition by Elon Musk. The lawsuit was filed in a San Francisco federal court in June 2023. As per the lawsuit, X executives repeatedly promised bonuses in the months leading up to billionaire Elon Musk’s purchase of X and after the sale. In the lawsuit, Mark Schobinger also alleged that the platform promised employees 50 percent of their 2022 target bonuses.

While denying X”s attempt to dismiss the case, US District Judge Vince Chhabria said that Schobinger plausibly stated a breach of contract claim under California law. “And by allegedly refusing to pay Schobinger his promised bonus, Twitter violated that contract,” the judge added in the three-page ruling. Meanwhile, X”s lawyers argued that the promise was only an oral promise and was not a contract. They also argued that the verbal contract did not stand up under Texas law.

Meanwhile, the social media platform is also facing a privacy complaint in Europe for unlawfully using the political views and religious beliefs of its users for targeted advertising. In the complaint, the digital rights NGO noyb said that X has violated the European Union’s General Data Protection Regulation (GDPR) and the Digital Services Act (DSA).