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Year end bonus dispute (Employment & Labor Law)

Thu, 16 Dec 2004 08:31:00 GMT

What is the name of your state? PA
Hi,
I've been trying to research some information online as to my situation with a former employer. Basically at my former company we were paid with a combination of base salary and a performance (individual and company..a typical range would be in the 10-20% range) based year end bonus at the year.
Earlier this year I quit the company at the end of August and in my exit interview I asked my boss if I could be paid a pro rated portion of what my bonus would have been for the year (I worked approximately 2/3 of this year). I was fully expecting him to say no, but to my suprise he actually agreeed! There were two caveats though. First was that since bonuses are calculated at the end of the year, that I'd have to wait until then. And secondly, part of our bonuses are paid mostly in cash in our paycheck and part as a 401k contribution (approximately a 75/25% split usually) and since I'd no longer be an employee I wouldn't be eligible for the 401k portion. Both conditions were fine to me.
So last week with the end of the year approaching I had inquried to him about the bonus via e-mail and was quite livid when I got this response.
"With regard to the issue of bonuses, as we discussed when you left, there was the possibility of you sharing in the bonus pool, based on a pro-rata share for time during the year and based upon the factors of other staff and their contribution to the group. It is likely, however, this year that there will not be a bonus pool, other than the 401(k) distribution, which you as an ex-employee cannot take advantage of under the XXX Plan. As such, it is doubtful that there will be a bonus distribution this year. Probably not the news you were hoping to hear, but you know that this is a building year for us at XXX for our IT group and we have very high hopes for 2005.
Ill let you know if anything changes relative to end of year finances, but that is the situation for now"

The reason I was livid for a few reasons. First the fact that he used the word "possibility" when actually he fully agreed to making this bonus payment (granted it was only a verbal agreement, but he never used the word possibility when we agreed on it) but more than that I was upset because I felt he was being disingenous with me. The company has been profitable for some time now and I found it extremely hard to believe that the company's finances would be SO bad that there would be no bonus pool this year. So I inquried with one of my former coworkers who is still employed there who told me that there was in fact a bonus pool this year and he himself actually got a quite sizable bonus.
So right now I'm unsure, what if any, rights I have to that bonus money. The company is small and there is no written bonus company policy, but everyone there could attest to the fact that that is what they have been told when hired and that every year of employment, every employee had received some cash bonus compensation. The agreement I made with my boss in leaving was verbal, but I believe the e-mail above despite his use of the word "possibility" shows that he made that agreement with me and that his reasoning in the e-mail for not paying me was that the company did not have a bonus pool of cash to distrubute, which in fact was a lie!
If someone could please alert me to some advice or their opinions on my rights in this mater or whether I should attempt to pursue this further, I'd appreciate it.
Matt

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  • Thu, 16 Dec 2004 11:44:00 GMT(1)
  • You need to give it up. Even if the company has made a bonus distribution to current employees, they're free to now change their minds and exclude you.
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