Elon Musk has been on a quest to transform Twitter, aka X, into a sanctuary of free speech, which, according to him, is the bedrock of democracy. However, Musk has been unable to turn his vision into reality. Since he acquired the platform, Elon has been facing dwindling revenue due to the fleet of advertisers on the platform. Along with that, he has been facing mass resignations after the layoffs and major changes in policy.
While Elon Musk is losing advertising revenue, during his reign, there have been several lawsuits against him and X over non-payment of dues to vendors and employees. In a report, it was claimed that Musk has been sued by several vendors for over $14 million in unpaid bills. The employees also filed lawsuits for wrongful terminations. Now, they are suing him for nonpayment of the agreed bonuses.
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Elon Musk-Owned X In Trouble As Judge Approves The Class Action Lawsuit Against Unpaid Bonuses
Twitter, aka X, has been under fire since Elon Musk took over the platform. The billionaire has made many changes to increase revenue as the main channel, advertising revenue, has been facing a slump. On top of that, since Musk’s acquisition, there have been many lawsuits filed by employees and ex-employees over non-compliance with severance pay.
Mark Schobinger, ex-senior director of compensation at X, filed a lawsuit against the company for not paying the bonuses promised to the employees in 2022. The lawsuit was filed at the San Francisco federal court and the case was upheld despite X’s attempt to transfer it to Texas. The company even tried to dismiss the case over non-binding oral promises.
Judge Vincent Chhabria ruled against dismissing the case in a ruling on December 22, 2023. During the ruling, the judge said, “Twitter’s offer to pay him a bonus in return became a binding contract under California law.” As per the defendant’s lawyers, the bonus plan is an unenforceable contract, and it is not valid under state law.
However, as the plaintiff filed the lawsuit in California, under the state’s law, the oral contracts are valid if an “enforceable written contract already exists.” X did not pay the 50% bonuses promised to them if the employees stayed back in the company. If X loses the case, the company has to pay millions in severance to the former and current employees.
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The Company Will Face A Probe By EU For Rising Hate Speech And Misinformation
The year 2024 does not look bright for Elon Musk-owned X, as many pending lawsuits and probes are scheduled for the new year. The addition to it is the European Union’s probe into the failure to contain misinformation and hate speech on the platform. In its first act, the EU will execute its powers under The Digit Services Act.
The executive bloc of the European Union launched a preliminary inquiry into X’s response to the misinformation during the Israel-Hamas war in October 2023.
The VP of the EU’s Executive Commission said, “The evidence we currently have is enough to formally open a proceeding against X. The Commission will carefully investigate X’s compliance with the DSA, to ensure European citizens are safeguarded online.”
X has to pay six percent of the global revenue as a fine if the company is found guilty of not complying with The Digital Services Act.
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