Bonus Theft

[Rsantars]

What is the name of your state? New Jersey

I work for a large company. Just recently we had performance and salary reviews, and I was given a year end bonus of $2500 for my work from Oct 1 2003 thru Oct 1 2004. The bonus money was deposited via direct deposit into my account along with my normal salary.

Two weeks later (Oct 9th), I was offered and accepted a job with another company. I gave three weeks notice (the company only requires 2) and continued working in my capacity.

The company then called the bank and informed them that the $2500 bonus was a "payroll error" and they instructed the bank to withdraw the $2500 and return it to the company--which they did.

When I found out about this I went in and confronted the executive responsible for these actions.

I confrimed from him that the bonus was for work performed during the previous year. He said that I was leaving the company high and dry because I was leaving a a "critical time". His actions (recalling the $2500) were obviuosly not intended to correct a "payroll mistake" but were clearly intended to punish me for changing jobs.

He responded by saying that the company has no policy on such things (gauranteeing bonuses) and that he is entirely within his rights to recall the bonus and essentially steal the money back from me.

Is this at all legal.

What is my recourse

 

[cbg]

For the record, let me state that I do not in any way agree with how the company handled this.

That being said, unless the bonus is tied to a enforceable, non-discretionary bonus plan, is a payment under a deferred comp plan or is guaranteed under a bona fide contract, what they did is not illegal.

Bad management, certainly. Poor "sportsmanship", definitely. Petty, without question.

But illegal, no.

 

[JETX]

I disagree... what they did by retroactively withdrawing an earned bonus IS illegal. Simply, unless the money was an 'error' as they claim, they cannot rescind the payment made.

I would suggest you write them a very nice letter (certified RRR, addressed to the owner or president) detailing the circumstances and that the bonus was already earned and NOT contingent on any future action. Include that they have (five?) business days to forward a check to you or you will pursue legal action.

Then, if they refuse, file in small claims ($3k limit in NJ) and take all of your documents showing that it was an 'already earned' bonus.

 

[cbg]

I think we're talking semantics, Jetx - I stated that if this was a non-discretionary bonus, then withdrawing it would be illegal.

 

[JETX]

I think we're talking semantics, Jetx - I stated that if this was a non-discretionary bonus, then withdrawing it would be illegal.

Even if it was discretionary, withdrawing it WOULD be illegal if done AFTER it was paid.

 

[cbg]

Under what statute?

(That's a question, not a rebuttal.)

 

[JETX]

Under what statute?

I would first pursue it as theft. Simply, someone cannot unilaterally and without justification rescind property that was legally transferred to someone else.

Under the New Jersey Statutes:
"2C:20-4. Theft by deception
A person is guilty of theft if he purposely obtains property of another by deception. A person deceives if he purposely:
a.Creates or reinforces a false impression, including false impressions as to law, value, intention or other state of mind, and including, but not limited to, a false impression that the person is soliciting or collecting funds for a charitable purpose; but deception as to a person's intention to perform a promise shall not be inferred from the fact alone that he did not subsequently perform the promise;
b.Prevents another from acquiring information which would affect his judgment of a transaction; or
c.Fails to correct a false impression which the deceiver previously created or reinforced, or which the deceiver knows to be influencing another to whom he stands in a fiduciary or confidential relationship."

As for civil liability, I would start with 'breach of contract'. Based on the writers post, there was clearly a contract (implied or specific) of the bonus. In fact, the bonus was paid, thereby ratifying the contract.