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US court rules Twitter breached contract over failure to pay annual performance bonuses

A US federal court ruled on Friday that social media company Twitter, now branded X, violated contracts by failing to pay annual performance bonuses it orally promised its workers.

By: AFP
Updated on: Dec 23 2023, 21:40 IST
A US federal court ruled that Twitter (now X) violated contracts by failing to pay annual performance bonuses promised to its workers. (REUTERS)

A US federal court ruled on Friday that social media company Twitter, now branded X, violated contracts by failing to pay annual performance bonuses it orally promised its workers.

The breach-of-contract lawsuit was brought by former employer Mark Schobinger in June.

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The lawsuit said Twitter had promised workers a 2022 performance bonus if they stayed with the company through the final possible payout date, which was the first quarter of this year.

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The court threw out Twitter's attempts to have the case dismissed, ruling that Schobinger's claim of breach of contract under California law was valid.

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"Schobinger has plausibly stated a breach of contract claim under California law. He alleges that Twitter orally promised to pay each employee a portion of the bonus contemplated," wrote US District Judge Vince Chhabria.

"And by allegedly refusing to pay Schobinger his promised bonus, Twitter violated that contract," said the judge.

X can still appeal the court's decision.

The social network now owned by Elon Musk, is currently facing multiple headwinds, including an EU probe under a law designed to combat disinformation and hate, criticism of the platform's response to recent rioting in Dublin, and an exodus of big-name advertisers.

The company is now worth less than half of the $44 billion he paid for it in October 2022, according to internal documents sent to staff and reported by tech publication The Verge.

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First Published Date: 23 Dec, 21:40 IST
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