Contract interpretation

[working-poor]

What is the name of your state (only U.S. law)? North Carolina

Hello, new to the group and I'm hoping someone can help me interpret this clause in our union contract regarding a quarterly bonus program. The article reads;

Bonus
"All Company full time and regular part time employees that are a part of the CBA will participate in a quarterly bonus program. The quarterly Company bonus program will be an incentive bonus based on an individual's performance with each such employee eligible for up to a five percent (5%) bonus of such employee's base annual salary"

Now, based on this clause, if my base annual salary was $24,960.00... what do you think my bonus should be every quarter?

 

[LdiJ]

What is the name of your state (only U.S. law)? North Carolina

Hello, new to the group and I'm hoping someone can help me interpret this clause in our union contract regarding a quarterly bonus program. The article reads;

Bonus
"All Company full time and regular part time employees that are a part of the CBA will participate in a quarterly bonus program. The quarterly Company bonus program will be an incentive bonus based on an individual's performance with each such employee eligible for up to a five percent (5%) bonus of such employee's base annual salary"

Now, based on this clause, if my base annual salary was $24,960.00... what do you think my bonus should be every quarter?

Its is clearly discretionary...and up to 5% of your base salary. Should your performance be such that you are at the top, then your 4 quarterly bonuses would add up to 5% of your annual base salary.

 

[working-poor]

your 4 quarterly bonuses would add up to 5% of your annual base salary.

Then shouldn't it read we would be eligible for up to 5% of our quarterly salary? Or quarterly annual salary?

 

[LdiJ]

Then shouldn't it read we would be eligible for up to 5% of our quarterly salary? Or quarterly annual salary?

No, the "contract" talks about your bonus on an annual basis. They are simply paying it out quarterly instead of making you wait a whole year for a bonus check. Its no different than your salary. Your salary is 24960.00 for the year. They don't pay you 24960.00 once a year, they pay you periodically.

 

[working-poor]

OK now that makes a little more sense. Thank you for your reply and insight.

 

[justalayman]

What is the name of your state (only U.S. law)? North Carolina

Hello, new to the group and I'm hoping someone can help me interpret this clause in our union contract regarding a quarterly bonus program. The article reads;

Bonus
"All Company full time and regular part time employees that are a part of the CBA will participate in a quarterly bonus program. The quarterly Company bonus program will be an incentive bonus based on an individual's performance with each such employee eligible for up to a five percent (5%) bonus of such employee's base annual salary"

Now, based on this clause, if my base annual salary was $24,960.00... what do you think my bonus should be every quarter?

I disagree with LdiJ's interpretation as it does not state the bonus is an annual event but a quarterly event based upon the annual earnings. That means it could be interpreted that you are eligible for a bonus, each quarter, of up to 5% of your annual earnings.



BUT, I suspect LdiJ's interpretation might be what was intended so, this becomes an issue for your union heads and the company to hash out.


basically it appears to be a poorly written part of what is likely to be a poorly written contract.

 

[working-poor]

I disagree with LdiJ's interpretation as it does not state the bonus is an annual event but a quarterly event based upon the annual earnings. That means it could be interpreted that you are eligible for a bonus, each quarter, of up to 5% of your annual earnings.



BUT, I suspect LdiJ's interpretation might be what was intended so, this becomes an issue for your union heads and the company to hash out.


basically it appears to be a poorly written part of what is likely to be a poorly written contract.

I agree with you and LdiJ's thinking about intent. That's my other Shop Stewards (I'm one as well) stance too. My argument with him is there's no place in contracts for intent. That's the whole point of a contract, so there is nothing intended, implied or gray. It's either black or white. My hope is to at least consider this clause ambiguous, because according to the NC wage and hour act regarding bonuses, "Ambiguous policies and practices shall be construed against the employer and in favor of the employees."

You are 100% correct, this contract is VERY poorly written and this clause is only a fraction of it....

 

[justalayman]

actually intent is omnipresent in law and contract. Whether it can be used to define a statement is another thing though. Many contracts are far from black and white. While it would be great if they were, it is obviously not the case given the number of contract disputes that end up in court seeking nothing more than clarification when an issue arises out of the ambiguous verbiage within the contract.

You are 100% correct, this contract is VERY poorly written and this clause is only a fraction of it....

let me guess:

when this contract was written, the company had all sorts of lawyers reviewing it while the union failed to seek out an attorney for at least a review of the proposed final edition.

 

[working-poor]

let me guess:

when this contract was written, the company had all sorts of lawyers reviewing it while the union failed to seek out an attorney for at least a review of the proposed final edition.

Actually, from what I understand, no lawyers were involved on either side. It was our Shop Steward and two other guys from our staff representing our side and three senior supervisors representing the Company. Our Business Agent wasn't even there....

 

[justalayman]

Actually, from what I understand, no lawyers were involved on either side. It was our Shop Steward and two other guys from our staff representing our side and three senior supervisors representing the Company. Our Business Agent wasn't even there....

Oh, even worse.


I never understood how layman ever thinks it a good idea to attempt to write contracts, especially over something so important, without at least having a lawyer review the document before anybody signs it. I am quite bothered by unions that allow this to happen as well.



and just as a note: I am a member of a union and have been a member of a union for most of my adult life. I have seen contracts that were the sizes of a novel and I have seen contracts consisting of several pages. I have always been bothered by what I see is an arrogance of union leaders that lets them believe they don't need a lawyer sitting next to them (at least figuratively) when negotiating a contract whether that contract is the novel size of the pamphlet size.

 

[working-poor]

I am a member of a union and have been a member of a union for most of my adult life.

Same here. My previous union contract from where I lived and worked in NJ was 84 pages. This one in NC is 16. When the Shop Steward asked me if I would be interested in representing my department, I said I sure would. When he handed me the contract, I asked him where the rest of it was. Except for the "Just Cause" clause, there isn't one single thing that benefits the workers. Everything is so vague and on the side of the Company. That bonus clause is a prime example. Vague, but interpreted in favor of the Company. I'm hoping that in the way it is worded, and with the wage and hour statute, I can win a small victory for my department and make them feel like someone is on their side for once.

 

[justalayman]

Best of luck to ya. Sorry to say but Americans have become complacent in regards to the place and purpose of unions. Too many good years have removed the bitter taste of near slavery conditions for the laborers of our country. Not that I advocate an overpowering union presence but there is a middle ground in there somewhere.

I suspect I won't live long enough to see the American people wake up and realize unions are needed and it will be a long struggle to replace what has already been lost.

 

[working-poor]

Best of luck to ya. Sorry to say but Americans have become complacent in regards to the place and purpose of unions. Too many good years have removed the bitter taste of near slavery conditions for the laborers of our country. Not that I advocate an overpowering union presence but there is a middle ground in there somewhere.

I suspect I won't live long enough to see the American people wake up and realize unions are needed and it will be a long struggle to replace what has already been lost.

I couldn't agree more....

 

[LdiJ]

One thing that I would like to point out to everyone is that the contract says "up to 5%"...and its based on performance. That means that it could be anywhere from 0% to 5%. Therefore, even if one were to make a compelling argument (and I don't think its possible) that it should be 5% of the annual salary every quarter, the company could simply get around that by making the percentage smaller.

One of the key factors in protecting an employee's job is the profitability of their employer. I can think of only a handful of industries where it would be feasible that an employer could afford to pay out a potential additional 20% per year in employee bonuses, without it effecting the number of employees it could afford to hire.

 

[working-poor]

I'm aware of the "up to" part of the clause. That's not what I'm trying to interpret in my favor. I'm expecting and prepared for the fact that they are going to chip away at the bonus with all kinds of flaws in our performances. That's going to be a whole 'nother fight. The company holds our noses to this contract especially with it's huge lack of regulating overtime. Mandatory 12 hour days and 10 hour Saturdays since summer is taking its toll on the entire staff hence my desire to exploit this bonus situation to gain a little leverage in negotiating a cease to these ridiculous hours, especially with the holidays coming up.

As far as their profit margin is concerned, the money we are saving them by doing this mandatory OT as opposed to subcontracting that work out is more than enough to take that 20% hit...