Late Limit on Bonus Plan Has No Effect 2018-01-08T13:52:21-07:00

Posted on January 8, 2018

The 8th Circuit Court of Appeals recently offered a refresher course on contract formation, as applied to employee bonus plans. The employer promised substantial bonuses, payable in five years, provided the eligible at-will managers were still employed. A couple of years later, the employer saw that the bonuses were going to be too expensive and announced a $100,000 cap on the bonuses. The managers said nothing, until the time for payment arrived; then, they sought full payment of the promised bonus.

Interpreting Missouri law, the court ruled that the managers had accepted the offer of the bonus through the required performance – they kept working. They had no obligation to tell the employer that they did not accept the later caps on the bonus, and the employer didn’t give the managers anything more than continued employment in exchange for the cap. Consequently, the bonus plan was not modified when the employer rolled out the cap. The employer was liable for the entire five year bonus, despite the expense. Boswell et al. v. Panera Bread Co., No. 16-3230 (8th Cir. January 5, 2018).

Remember that contract formation is covered by state law, so the result here could vary state-by-state, but employers can’t always just announce a change to a bonus plan and make it stick.

Court Order Trumps Board 2015-07-13T09:46:35-06:00

Posted on July 13, 2015

By Bill Wright

What happens when the NLRB says an arbitration agreement is illegal, but a court enforces the agreement anyway? Four plaintiffs recently found out. In Hobson et al. v. Murphy Oil USA, Inc., No. CV-10-S-1486-S (N. D. Ala. July 8, 2015), the plaintiffs brought a collective action, for themselves and others, seeking unpaid overtime. The employer raised the arbitration agreement, and the court ordered the plaintiffs to bring their individual claims in arbitration, effectively killing the plaintiffs’ attempt to bring the claims on behalf of other employees.

Instead of arbitrating, one of the plaintiffs filed an unfair labor practice charge with the NLRB, and the plaintiffs waited. And waited. Two and a half years they waited without ever starting the arbitration. Eventually, the NLRB ruled that the arbitration agreement illegally prohibited employees from engaging in protected, concerted activities, such as filing collective actions. (See our previous posts concerning DR Horton.) With the Board ruling in hand, the plaintiffs asked the court to reconsider its order on arbitration, but the court found the plaintiffs had failed to comply with its earlier order. The plaintiffs could have asked the court to stay the arbitration pending Board action, or they could have appealed the order, but instead, they just waited for over 2 years. Despite the Board’s ruling, the court called the plaintiffs’ behavior a “clear record of delay and willful misconduct” and dismissed the plaintiffs’ overtime claims as a sanction.

If you’re going to be in court, it is best to follow the court’s orders.

Grievance Process Killed Retaliation Claim 2014-02-25T08:11:14-07:00

Posted on February 25, 2014

A recent decision on a Workers Compensation retaliation claim shows a hidden value for employer-union grievance processes. In Macon v. UPS, No. 12-3080 (10^th Cir. February 19, 2014), the plaintiff claimed that when he returned from a Workers’ Comp. leave, his supervisors began to scrutinize his work, wrote him up repeatedly, and repeatedly attempted to fire him. The employer’s grievance process thwarted at least two termination attempts. Employees could protest any discipline and a local panel of employer and union representatives would review the decision. Appeals from the local panel went to a regional panel of employer and union representatives. Twice, after the plaintiff’s Workers’ Comp. leave, panels reduced termination decisions to suspensions. The third time, however, the supervisor recommended termination for an infraction of policy having to do with recording the number of stops the plaintiff had made on a delivery route. A grievance panel had previously warned the employee directly about the correct way to record this information, and when he made the same error again, a panel approved his termination. Although the plaintiff claimed the supervisor had a discriminatory animus against him, and acted on that animus, he had no evidence that the members of the panel held the Workers’ comp. leave against him or that the panel merely rubber stamped the supervisor’s decision. The court determined the grievance panel actually made the termination decision and threw the claim out on summary judgment.

Passing the buck can be an effective defense to discrimination and retaliation suits, when the decision-maker truly is independent.

No Leave Benefit Goes Unpunished 2013-09-09T17:32:17-06:00

Posted on September 9, 2013

By Bill Wright

A worker is injured – seriously injured – and goes out on long term leave. He files a workers compensation claim. The comp. claim stalls and, for 11 years, the employer pays insurance benefits for the worker with no end in sight. Finally, the employer notifies the worker that, if he is unable to return to work, the company will separate his employment. The result? A lawsuit, of course. Brooks v. Pactive Corp., No. 12-1155 (7th Cir. September 6, 2013).

After dismissal in the trial court, the court of appeals resurrected the worker’s claim for workers comp. retaliation. Although it had been 11 years since the worker filed a claim for compensation, negotiations on a settlement had stalled more recently and his medical costs recently soared. The court ruled that it was possible, even plausible given the allegations, that the company had decided to let the worker go at that time because of the workers comp. claim and not because he was unable to perform his job.

Even a decade of patiently providing a worker with insurance benefits is no protection from litigation. We can hope the employer wins on the merits, but it’ll have to face the legal fees.

Ex-NFL Players Fumble Their Cumulative Injury Claims 2013-04-10T16:07:14-06:00

Posted on April 10, 2013

By John Alan Doran

In a procedurally complex case involving workers compensation claims by former NFL players, a federal court recently ruled that the players could not take advantage of California’s workers’ compensation scheme. The former NFL players, all former members of the Kansas City Chiefs, asserted that they experienced cumulative injuries as a result of their days playing for the Chiefs. Based on these supposed injuries, the players filed workers’ compensation claims against the Chiefs in California, rather than in Missouri, where the Chiefs are located. The NFL threw a flag on that play, contending that the players were required to seek workers’ compensation in Missouri based on the language of their contracts. A federal judge agreed, holding that the very terms of the players’ standard NFL contracts required them to assert their workers’ compensation claims in Missouri. Please click here to access the case.

Lesson of the day: Before you try to nullify the employer’s home field advantage, you better read your contract and its choice of law provisions.