NY: Bonuses Owed to Employees After Termination

NY: Bonuses Owed to Employees After Termination

Riley worked at a law firm and had an agreement with the law firm for her to receive a bonus if she exceeded a set amount of actual legal fees generated by her work.  The agreement with Riley conditioned payment of the bonus on her continued employment at the time that the fees on which the bonus was to be based actually cleared the firm’s operating account.

Riley was terminated and the law firm withheld the bonus for fees that cleared the firm’s operating account after termination.  Per the decision in William Mattar, P.C. v. Riley, an appellate court in New York ruled that an employer cannot terminate an employee shortly before a non-discretionary contractual bonus payment and not pay the bonus.  Not paying an “earned bonus” constitutes a violation of public policy.

The Court found that on top of the bonus sums owed, violation of the New York Labor law subjects the law firm to penalties equal the amount withheld and to the extent that the law firm’s “Bonus Eligibility” agreement “restricted payments of bonuses to current employees, such provisions are void as against public policy.”  Employers in New York should take note.  We are here to help you plan and grow and protect your business.  Please feel free to contact Dawn at: dawn@eppscoulson.com.

Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.  It is likely considered advertising.  Epps & Coulson, LLP encourages you to call to discuss these matters as they apply to you or your business.  Epps & Coulson, LLP attorneys and affiliated counsel admitted to practice in New York, California, Colorado, Connecticut, District of Columbia, Massachusetts, New Jersey, Hawaii, Oregon, Texas, European Union, France, England and Wales and Sweden.

EPPS & COULSON, LLP
www.eppscoulson.com
www.companiescounsel.com