Skip to main content

Legal Setback for X Corp in Employee Bonus Dispute

In a recent legal decision, X Corp, previously known as Twitter, has been found in breach of contract by a U.S. federal judge for failing to pay millions in bonuses to its employees. This ruling marks a significant setback for the company in its ongoing legal battles.

The Case of Unfulfilled Promises

Formerly a leading figure at Twitter, Mark Schobinger, who served as the senior director of compensation, filed a lawsuit against the company in June. This action came after his departure in May from the organization, now under Elon Musk’s ownership. Schobinger alleged that despite promises made both before and after Musk’s acquisition of Twitter, the company failed to disburse 50% of the targeted bonuses for 2022 to its employees.

Court Ruling: Validating the Breach of Contract Claim

U.S. District Judge Vince Chhabria rejected Twitter’s motion to dismiss the case, affirming that Schobinger’s allegations constituted a plausible breach of contract under California law. The judge emphasized that Twitter’s commitment to pay a bonus, following Schobinger’s fulfillment of his part of the agreement, constituted a legally binding contract. The company’s failure to honor this agreement was thus deemed a contract violation.

Company’s Defense and Judicial Response

Twitter’s legal team contended that the promise of bonuses was merely verbal and non-contractual. They further argued that Texas law should apply to the case. However, these claims were dismissed by the judge, who ruled that California law was applicable, and all contrary arguments by Twitter were unconvincing.

Broader Legal Challenges for X Corp

This lawsuit is just one among several legal challenges faced by X Corp since Musk’s takeover. The company has been the subject of numerous lawsuits filed by former employees and executives, particularly after substantial workforce reductions. These lawsuits encompass various allegations, including discrimination against older workers, women, and individuals with disabilities, as well as failure to provide adequate notice for mass layoffs. X Corp has consistently denied any wrongdoing in these matters.

A Pending Corporate Response

With the recent ruling, the focus now shifts to how X Corp will respond, especially in the absence of a dedicated media relations office. As of now, the company has not issued any statements regarding the court’s decision.

Source: The Star

Is Twitter Stock Halal?

Twitter (TWTR) stock is no longer available for purchase following its transition to a private entity. In October 2022, Elon Musk completed the acquisition of Twitter, subsequently privatizing the company and withdrawing its shares from public trading. Before this change, Twitter had been a publicly traded company since 2013.

Discover More Insightful Business Stories at Musaffa Academy

Join the Musaffa Community Today.

Disclaimer: Important information

 




Source link