Been laid off. If last year’s bonus is denied, can I sue?

Question: In January, I was laid off from a major bank where I was a Director. It was a reduction in force (“RIF”), and not due to performance or misconduct. I did not sign any separation or severance papers, because I first want to find out how much I will get as a bonus for last year. Can the company decide not to give me any bonus for last year? If that happens, could I hire you?

Great Neck, New York

Answer: The answer to your question lies in the details of your former employer’s bonus plan. Many large financial institutions have in their bonus plans two provisions that would be a big problem for you:

A. First, many bonus plans say that the payment of a bonus is entirely “discretionary,” and for that reason no one is absolutely entitled to any bonus.

B. Second, many bonus plans say that “You must be employed on the day bonuses are handed out in order to be entitled to receive one.”

I’m sure both of these provisions sound unfair, but they are quite common and entirely enforceable. So, you need to carefully review the bonus plan of your former employer, which should be easily obtainable by contacting Human Resources.

If your bonus plan does not have these provisions, or ones close to them, you should have a very strong argument that, since you worked the entire year, you deserve a bonus near the amount given to others at your level.

If you seem to have an enforceable right to a bonus, and don’t receive one, you may contact our office to find out about retaining our firm to assist you.

Hope things work out.

Best, Al Sklover

P.S.: Monies due you (commissions, bonus, wages, expenses, etc.) owed you by former employer? Your best bet is to make a written request. We offer a Model Letter Requesting Monies Due You by a Former Employer. Shows you “What to Say, and How to Say It.”™ To obtain your copy, just [click here.] Delivered by Email – Instantly! 

© 2009 Alan L. Sklover, All Rights Reserved.

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