Twitter accused of failing to pay millions in employee bonuses after Musk takeover
SAN FRANCISCO - Twitter failed to pay out annual bonuses to staff after its acquisition by billionaire Elon Musk despite repeated assurances from executives in the lead-up to the deal closing that the company would do so, according to a new lawsuit filed on behalf of employees.
The lawsuit was filed in a San Francisco federal court on Tuesday by Mark Schobinger, who was a senior director of compensation at Twitter until he left the company late last month. The suit is seeking class action status for former and current Twitter employees who did not receive their 2022 bonus.
"We estimate about a couple thousand employees would have been eligible for the bonuses," Shannon Liss-Riordan, the attorney representing Schobinger, said in a statement to CNN. "While I don't have an exact number, we expect the amount owed is in the tens of millions."
Twitter, which has cut much of is public relations team, did not respond to CNN's request for comment.
The complaint states that after it was announced that Musk was acquiring the social media company last April, "many employees raised concerns" over the fate of "their compensation and annual bonus" if and when the deal closed.
In the months leading up to Musk completing his acquisition of Twitter, company executives repeatedly promised employees that 2022 bonuses would be paid out at 50% of the target, according to the complaint. "The promise was repeated following Musk's acquisition," the complaint said.
Despite the promises, however, Twitter has yet to pay out bonuses, the lawsuit says. Schobinger left the company last month following "Twitter's reneging on various promises it had made to employees, including its failure to pay promised bonuses," according to the complaint.
The lawsuit is the latest in a string of legal actions taken by former Twitter employees after Musk's acquired the company and slashed 80% of the staff in an urgent bid to cut costs.
Liss-Riordan previously brought multiple proposed class action suits against Twitter, including on behalf of female employees and disabled employees. Another suit was filed by a group of former employees who accused Twitter of breach of contract because it allegedly failed to follow through on promises to allow remote work and provide consistent severance benefits after the acquisition.
Twitter has denied the breach of contract allegations in the lawsuit brought by former employees about remote work and severance. The proposed class action suits on behalf of female and disabled employees were dismissed by federal judges last month. The suits were later refiled.
