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Screwed out of performance bonus pay

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johhnyx

Junior Member
What is the name of your state (only U.S. law)? New York
My former large, Fortune500 employer went to a pay/perf. system a couple of years back for all professional employees, based on their performance review (PA) annually, which also sets the regular raises. (hah!) So last year, tough times, etc. they said they were "postponing" the payout, which was scheduled to be a "bogey" of about 2% of your annual wages. To make us happy, they said they'd add it to this year's total. So you need to work all of 2008, and your payout would be in April 2009 for last year's work.

I was laid off in late Jan, and my last day there was end of Feb. The PAs are normally handed out in April. When I never received any bonus money direct deposited, I called my former boss, and asked to see a copy of my last PA.
Their payout systems works like this: As a percentage of the "bogey", a "1" gives you a 125% payout, a "2" gives you 110, a "3" (typical performance) gives you 100%, a "4" (less than great) gives you 75%, a 5-zippo.

I assumed they were going to give fairly lousy numbers to us, like a 3 or 4, since we were laid off. The layoffs in my division ran about 33%, so it was a huge number. The company is cash-poor like everyone now. They've suspended matching 401K contributions, everyone remaining has to take a week furlough w/o pay, etc. But when I got my PA, it was a 5 out of 5, a "totally unsatisfactory" rating, so I get nada!

Even the descriptive words on it said in many places "John did a good job on ...." A few minor criticisms, but nothing to suggest I sucked. I had 25+ years with this same company and had risen to the level of a minor manager, and had always received top reviews. My old group had been downsized out from under me, so I ended up being superfluous, but I still did all I could to help other less experienced people, etc. And this was even reflected on my Performance Review!

I know it's easy to screw people who are no longer there, but this was really ridiculous. I had regular 1-on-1 meetings with my supervisor every other week or so, and he never told me anything to suggest I was not doing at least a satisfactory job. He used to be my peer, and I ended up working for him, and I know he felt threatened by my skills, advanced degree, etc, so he always tried subtly to give me weaker assignments to work on. I always asked for more to do and was called in to help people on projects that they couldn't complete without my help, so I was told by my upper manager that they still respected me, blah, blah.

After leaving, I would not have complained about at least getting 75% of the bonus award, really at least 100% (a "3" rating) would be appropriate, but as I said, I understand screwing people who leave a little bit. After all, then you give the savings to the people who are left. But this was insulting!

The gross payout for this performance pay is between 7000-8000, so we are talking not a lot of money, but I'd sure like at least some of it, which I know I absolutely deserve.

So right now, I'm planning on writing some firm but polite letters to some of the upper/mid management and see if they will relent. If not, I will go higher up the chain and at some point, if no response, threaten them with a press story. They are getting plenty of bad local press here already.

My real question is: I know NYS Small Claims Court has a limit of 5000. Can I take this into Small Claims and argue it? I did sign a severance agreement that says you won't sue them, but I believe it has a (legally required) exemption to that agreement for labor disputes. Will a Small Claims judge have any authority over this? It seems like too small a sum to fight in a real court with a lawyer, unless I sue for damages, mental distress over the bad review (silly, I know) ,etc.

Any reasonable suggestions? Or should I just chalk it up to bad luck and a cra_ppy economy? In all objectivity, I didn't in any way deserve the lowest of the low in rating. It's just plain wrong, and even his comments don't describe that low of a ranking. But words are subjective of course. It's like he could only pick at minor stuff, and was too scared to actually lie on there and say I didn't do the major portion of my assignments.

Thanks, J.
 


You have a case I would not give up on it, since NY small claim max is $5000.00. Talk to an an attorney to see if you can take the annual bonus sue for $4000.00 for January to June, and file another case for June to December for $4000.00 as well. The judge would hear both cases at the same time and rule on both.
 

johhnyx

Junior Member
Well to address the one reply, they do have money. They are not bankrupt or anything like it. They are conserving funds, yes, but they have paid other laid off people.

The point I'll re-emphasize is that no, I do not have an employment contract, but the company has this system as a written and documented pay policy, and is (was) a significant advertised portion of our compensation. It is not a "bonus" since it was based on our job performance. It is described by them as a portion of our pay which is held back until the following year and the PA/results cycle is completed.

My Performance Review (PA) was clearly lowered to remove me from consideration for the additional pay. If I were to appear in small claims court, the actual words of the PA do not reflect the lowest score I received at all. I also have coworker witnesses who would testify that I assisted them in their work and they would clearly state I was generally recognized by all as a valuable contributor. I have oodles of documentation, letters, emails, spreadsheets, etc. showing exactly what I accomplished over the year.

What I was told by a remaining worker friend is that they stretched the "bell curve" for these ratings, so some good ratings could be offset by the money saved from "bad" ratings. When 33% of our population was just (in this last round) let go, and we have had layoffs for the last 8 years pretty much annually (with no other real growth in employment) I think it is a fairly solid argument that the third of the total people were not low performers. They have all been weeded out over the last number of years.

In my "defense", I have had a solid record of performance year after year; received no negative feedback on performance in weekly 1-1's, and was told repeatedly by my upper management that I was a valuable contributor. So this "rating" came out of the blue. As I stated, even their own words on my contributions only point to one or two minor issues, but overall state in several places how I had done a "good job" on the major cost-saving projects.

If I presented a valid defense with witnesses testifying on my behalf, does a small claims judge have any jurisdiction in these matters or not? That's really the question. Can he grant me a judgement? For the $15 filing fee, I'd bury him with paper trails of my performance, the actual results from the PA, and witnesess. I doubt the company would do much to defend for this type of money.

My claim is that their pay structure pays for job performance, and I was a solid performer and can prove it. (reasonably prove it)

Is this not any different than a roofer suing a client who refused to pay him for the roofing job because he "didn't do a good job"? Even with just a verbal (not written) contract between them, a small claims judge would decide on who was more believable and presented the best merits, would they not? I've seen people testify in Small Claims with no paperwork and still win, if their story is the more believable. My documentation is that the company provides a detailed manual stating how this additional pay (not a real "bonus") is held back until the following year based on job performance/completion.

So then isn't it more my job to defend my case that I did indeed do my job and they owe me this pay? And that holding it back after agreeing to pay it is dishonest?

How would this be different from a verbal contract dispute with a housing roofer? The client would argue they didn't pay him because he did a lousy job. He would show pictures showing the roof looking good, and the judge would decide.

I appreciate the comments. If someone can explain the difference in situations I would appreciate it. I should not have called it a "bonus", it is really just a portion of our incentive pay system. If the company had not sent me the paycheck for my last two weeks, wouldn't I also have a case there? How is this really different under the law? I didn't have an employee contract to receive my weekly paycheck either. This process was documented by them as a integral part of my pay structure.

Thanks, John
 

pattytx

Senior Member
The difference is that pay for time worked is labor law. Generally speaking, incentives, bonuses, etc. are matters of contract law.
 

Zigner

Senior Member, Non-Attorney
1) It doesn't sound to me like your bonus was part of any bona-fide employment contract, which means there is NO requirement for them to pay it.

2) You signed a severance agreement agreeing not to sue. This is NOT a labor dispute.



You have no case. Period, even if, and, or but.
 

eerelations

Senior Member
In law, company policies never rise to the level of contract. Your former employer cannot legally be required to pay you this bonus. Period.
 

ecmst12

Senior Member
That's not a statute.

It's not established, or even hinted at, that there is an enforceable contract in place for the bonus agreement.

And it's VERY clear that OP signed a release agreeing not to sue, in exchange for payment of severence. Which most likely WILL be enforceable.

OP has no case.
 
That's not a statute.

It's not established, or even hinted at, that there is an enforceable contract in place for the bonus agreement.

And it's VERY clear that OP signed a release agreeing not to sue, in exchange for payment of severence. Which most likely WILL be enforceable.

OP has no case.
Contract law is not in statute, courts establish if contracts are established. If it is part of his wages it can not be waived by a release of liabilty. Corbins is the most cited treatise on contracts in the United States.
 
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Did you just really link an ad for a hornbook as "proof" a company policy is a contract? Really?
Look if you don't understand the difference between a treatise and a hornbook I am not going to waste my time with you, because your never going to get it.

Your either a complete idiot or your looking for a flame war which usually bores the hell out of every one but the flamer.
 

You Are Guilty

Senior Member
Look if you don't understand the difference between a treatise and a hornbook I am not going to waste my time with you, because your never going to get it.

Your either a complete idiot or your looking for a flame war which usually bores the hell out of every one but the flamer.
Oh excuse me for not clicking the link, looked like a hornbook to me. But thank you for clarifying, a treatise is so much better than, you know, actual proof, particularly some that might help the original poster. (How does Corbin know johnnyx anyway? Did they summer in the Hamptons together?)

Once you show me where the OP has an enforceable employment contract that requires the payment of his bonus under the circumstances he's presented, I'll concede. Until then, it's quite obvious who the "complete idiot" is.
 
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