A federal judge ruled Friday that Twitter, now known as X, breached its contract with employees when it failed to pay millions in promised bonuses last year.
The company promised employees half of their potential bonuses both before and after tech billionaire Elon Musk purchased the company in 2022, but never paid, according to the suit.
Mark Schobinger, then the company’s senior director of compensation, brought the lawsuit against the social media platform in June.
"Once Schobinger did what Twitter asked, Twitter's offer to pay him a bonus in return became a binding contract under California law,” District Judge Vince Chhabria wrote in the opinion.
“And by allegedly refusing to pay Schobinger his promised bonus, Twitter violated that contract," he added.
The company argued that the bonus agreement was merely an oral promise and should not have to be paid per Texas law.
Chhabria, instead, held the company to California law, which establishes that the agreement was legally binding.
“Twitter’s contrary arguments all fail,” Chhabria wrote.
X has faced multiple legal battles since Musk took over the company last year, including other fights on compensation, wrongful termination and discrimination claims.