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Executive Bonus Pay

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  • Executive Bonus Pay

    This is a Florida situation. I was recently let go from an employer where I was in a senior executive position. I worked with them for approximately a year. I waited for 3 weeks for the bonus I had due. In our meeting yesterday the lawyer for the firm stated that I was not eligible for any bonus but sign here and we'll give you this severance check. The implication was that if I didn't sign off on the separation agreement I would get nothing. I had renegotiated my bonus 6 months ago to include an addendum that paid me a percentage of year over year increase in profit. I was always paid my bonus monthly but with this increase we started to accrue it monthly instead and I would take it as a lump later in the year as we were in the process of buying a house. I took draws on a couple of occaisons against this bonus. The amount they paid me in serverance was considerably less then what I would have received had my bonus been calculated. Any opinions on this? I was under considerable financial pressure to accept this severance and could not afford to walk away from it. There is no where in my payplan that states the bonus is payable after the year end or that I am only eligible for the bonus if I complete the year. There is also a wrongful dismissal case here for retaliation but that's a whole other thread. Comments?

  • #2
    What does the bonus agreement say?
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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    • #3
      So you're saying you signed the severance agreement?

      If so, you waived your right to protest the non-payment of bonus. That's kind of the idea. A severance agreement - typically - is a contract that says, "Employee gets 3 weeks pay. IN consideration of this, employee agrees not to sue employer for anything else that may be on employee's mind, or which may later occur to employee."

      The bottom line then, is that, unless you can void or avoid the settlement agreement, you aren't in a position to sue these guys. For anything. You settled already.

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      • #4
        Executive Bonus

        Even if the agreement was signed under duress? There was no advance knowledge of there being severance. It was represented that we were getting together for me to sign a separation agreement and collect the bonus that was due. It was represented that during the 3 weeks I waited for my bonus that the people who would be calculating it were on vacation and otherwise occupied. When I show up at the meeting to collect my bonus I am blindsided by the serverance and kindness of our hearts scenario?

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        • #5
          You're calling this duress, which strictly speaking it isn't. "Duress", in the legal sense, would need to be much more than what you are talking about here. Duress, in a legal sense, needs to involve physical force or some sort of threat of physical force (there are other things that are egregious enough to be duress (like extortion), but none of them are anything nearly as light as what you are talking here. Suffice it to say that if there has been "duress" involved in trying to get a person to sign a contract, that it is the type of situation where someone could be convicted of a crime.)

          However, you do state that you were blindsided, didn't have a chance to think it over, got taken advantage of, were given bad information by them, etc. And it's possible that some of these things (or all of them, taken together) might be enough to get you out of the contract. It depends on what exactly happened, what the contract looks like, and minute details of your state's law. Certainly you could argue that there is a 'Defect in the formation' of this contract and it shouldn't be enforced, and that might get you somewhere. You could also argue that the contract wasn't intended to resolve the bonus issue, and again, it might or might not get you somewhere. I don't really know how it would turn out, but my intuition is against you.

          The only thing I can say for certain is that you are in a worse situation - as far as trying to sue over the bonus - having signed the contract than if you had not.

          Even if you can avoid or void the contract, it's not clear that you'd win on the bonus issue. A bonus, typically, is a "gift" by an employer to employee, and it only becomes irrevocable upon formal delivery - which it sounds like never took place. The conclusion is - you may not WANT to void or avoid the contract!

          If I were you I"d leave this one as is, and make it a point not to sign anything in the future without a 24-hr waiting period to think it over.
          Last edited by grasmicc; 09-14-2005, 01:14 PM.

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          • #6
            Executive Bonus

            Thank you all....

            Comment

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