Musk refused to pay annual bonuses promised to Twitter employees, lawsuit says

Twitter is facing a class-action lawsuit alleging that it failed to pay bonuses promised to current and former employees who stayed at the company after Elon Musk's October 2022 acquisition of the firm.

Twitter executives "repeatedly promised Plaintiff and the company's other employees that 2022 bonuses would be paid out at fifty percent of target. This promise was repeated following Musk's acquisition," alleged the complaint filed yesterday in US District Court for the Northern District of California.

Plaintiff Mark Schobinger was Twitter's senior director of compensation from February 2019 until May 26, 2023. He is seeking class-action status "on his own behalf and on behalf of other current and former Twitter employees who were employed by the Company as of January 1, 2023, and who have not been paid their annual bonus for 2022."

Schobinger and others stayed at Twitter after Musk's acquisition partly due to the promised bonuses, the lawsuit alleged.

"Plaintiff and other Twitter employees relied upon the promise that they would receive their 2022 bonus when choosing to remain employed by Twitter following Musk's acquisition of the company and/or deciding to forgo other employment opportunities," the complaint said. Despite the promises before and after the Musk acquisition, Twitter allegedly "refused to pay" any bonus to "employees who remained employed by the company in the first quarter of 2023." The annual bonuses were typically paid in March in previous years, the complaint said.

Alleged damages exceed $5 million

The lawsuit alleges that Twitter committed breach of contract and promissory estoppel and says the damages exceed $5 million. Schobinger is represented by lawyer Shannon Liss-Riordan, who also represents other former Twitter employees in separate cases against the company.

"In the months following Musk's acquisition of Twitter, Plaintiff regularly received calls from recruiters and companies regarding other employment opportunities," the new lawsuit said. "However, Plaintiff turned down these opportunities, secure in the knowledge that Twitter would pay him his promised 2022 annual bonus during the first quarter of 2023." Schobinger finally left the company last month due to "Twitter's reneging on various promises it had made to employees," the complaint said.

One day before completing his purchase of Twitter, Musk denied a report that he planned to get rid of nearly 75 percent of Twitter's 7,500 workers. As it turns out, Musk has cut Twitter's staff by roughly 75 percent through a combination of mass layoffs and an ultimatum telling workers to commit to an "extremely hardcore" approach or quit their jobs.

Musk's cost-cutting isn't limited to the massive staff cuts and alleged nonpayment of bonuses. There are over 20 lawsuits from vendors and landlords claiming that Twitter failed to pay bills for services, products, or rent. A judge ordered Twitter to be evicted from an office building in Boulder, Colorado, over unpaid rent, and Twitter was sued for nonpayment of rent at its San Francisco headquarters, at another San Francisco building, and at its UK headquarters.

Twitter did not respond to a request for comment today, unless you count the customary poop emoji that the company's public relations email sends as an auto-reply to press inquiries.