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America August 26, 2024 2 mins read

Ex-Twitter Employee Seeks Class Certification Over Withheld Bonuses

America ı By Rochdi Rais

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Ex-Twitter Employee Seeks Class Certification Over Withheld Bonuses After Musk Takeover

A former employee of X Corp., formerly known as Twitter, is urging a California federal court to certify a class of about 2,200 workers in his lawsuit claiming the company withheld promised bonuses following Elon Musk's acquisition of the social media giant.

Mark Schobinger, who previously held the role of senior director of compensation, filed a motion on Friday seeking class certification in his breach of contract lawsuit. Schobinger alleges X Corp. unlawfully withheld bonuses promised to employees who remained with the company through the first quarter of 2023. He argued that executives' oral and written assurances created a binding contract and that the company’s decision to revoke the bonuses is central to the case for all affected employees.

Schobinger’s proposed class includes anyone employed by Twitter during the first quarter of 2023 who was not paid their 2022 bonus, despite multiple assurances from company executives that the acquisition by Musk would not affect these payouts. In March 2023, X Corp. employed approximately 2,200 people, with the workforce shrinking to 1,500 by May. Schobinger noted in his motion that executives had repeatedly told workers they would receive their 2022 bonus if they stayed with the company through early 2023.

"It would be grossly inefficient to require each employee to bring a case individually," Schobinger wrote in his motion. He emphasized that certifying the class would streamline the legal process, reduce expenses, and protect employees from retaliation.

Schobinger originally filed the lawsuit in June 2023, claiming executives promised in August 2022 that bonuses would be paid at 50% of the target amount, with funds set aside for distribution. However, those bonuses never materialized, and Schobinger resigned from the company in May 2023.

X Corp. pushed to dismiss the case, citing its discretionary bonus plan, which they argued gave them the authority to deny or modify any bonus payouts. However, U.S. District Judge Vince Chhabria largely rejected the motion in December 2023, stating that Schobinger's case rested on enforcing executives' oral agreements rather than challenging the discretionary bonus plan.

Schobinger’s legal team also highlighted concerns about potential retaliation, given Musk’s history of publicly criticizing employees on social media. The motion argues that pursuing the case as a class action would offer protection for workers who might otherwise fear personal retribution.

The case is *Schobinger v. Twitter Inc. et al.*, case number 3:23-cv-03007, in the U.S. District Court for the Northern District of California.

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Rochdi Rais

Rochdi Rais is the Head of Growth and financial and legal writer at USA Herald. He has been writing and editing financial, legal and U.S. news for years with over +4000 articles published during his career.

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