Firing employees to not give retention bonus

The company I am working for is outsourcing my job to India. As a part of the layoff, they have offered retention bonuses. I have signed the retention bonus contract. All of a sudden 2 months later, they are trying to reach for reasons to fire people that have signed the contract. Specific people are being picked that have been offered high retention. Part of the contract states that if you are fired, you dont get any retention. Is there a way to legally defend this?

1 answer  |  asked Apr 3, 2009 6:35 PM [EST]  |  applies to Arizona

Answers (1)

Francis Fanning
Termination to avoid paying retention bonus may violate covenant of good faith and fair dealing

I hesitate to give you specific advice regarding your situation because the case turns on the wording of the retention bonus agreement you signed. General principles of contract law govern this situation, but the wording of the contract is critical. If, as you suggest, the company is trying to manufacture reasons for termination that result in forfeiture of the retention bonus, you may have a claim for breach of contract if it happens to you. All contracts contain a provision implied by law that is called the covenant of good faith and fair dealing. This provision prohibits both parties to the contract from doing something that deprives the other of the opportunity to enjoy the benefit of the contract. I would suggest that you consult with an employment attorney to review the exact language of the contract to see how far your employer can go to deprive you of the bonus, and whether there might be a breach of the express terms of the contract or a breach of the covenant of good faith and fair dealing.

posted by Francis Fanning  |  Apr 7, 2009 6:06 PM [EST]

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