Illegaly took my bonus

I currently am a senior executive with a New York based company with my office in Scottsdale. In my employment contract which is an at will contract. It explains my bonus structure. It says any changes to the bonus structure must be provided in writing and signed by both parties. I was due a bonus of approximately 85K for FY 2001 and when I asked for it they told me I am not getting it because the target was not met. My contract says I get a percentage of the increase in revenues between years. We had a 40 percent rise in sales. Nothing was provided in writing or verbally concerning this change. I notified the CEO and COO that I should be paid my bonus, they then notified me the next day my salary was being reduced because we did not have a 50% increase in revenues. I accepted the decrease and was afraid to ask for the bonus fearing retaliation or firing. Can they fire me if I ask for my bonus? If I am let go in the future can I then pursue my bonus for FY 2000? Lastly, does my employment fall under the laws of Arizona or New York? Thanks for your help.

1 answer  |  asked Aug 21, 2001 6:51 PM [EST]  |  applies to Arizona

Answers (1)

Francis Fanning
Statute of Limitations on Bonus Claim

Your claim for the unpaid bonus could be brought either as a statutory wage claim or as a claim of breach of contract. In either case, the statute of limitations for the claim would be one year, based
upon Ariz. Rev. Stats. 12-541(3)(employment contract) or (5)(liability created by statute). Since you have a written agreement regarding your bonus
and it was not modified in writing as the agreement
requires, it would appear that you have a strong
claim. The wage claim statute may even entitle you
to three times the amount wrongfully denied you.
Although an at-will employment relationship can be
modified at will by the employer, it cannot be
modified retroactively so as to deprive you of
compensation you have already earned. Further, if
the employer were to fire you in retaliation for
seeking the wages due you , you might have a claim
of wrongful discharge in violation of public policy,
although Arizona's wrongful discharge statute, Ariz.
Rev. Stats. 23-1501, was written in such a way that
many claims of wrongful discharge that would have
been recognized at common law are now
unavailable. The one year time limit for your bonus
claim would begin to run from the day you were told
you would not receive it, but to be on the safe side, I
would count the days from the day the bonus was
due if that was earlier.
The choice of law question is a bit complex. Ordinarily the law of the state in which you are employed would govern the issue unless your agreement provides otherwise. Even if the agreement provides for the application of New York law, it might be rejected if the result would violate Arizona's public policy regarding the payment of wages. Depending upon what the law of New York provides, it might not make any difference. And regardless of which law applies, your claim can be brought in the Arizona courts.

posted by Francis Fanning  |  Aug 23, 2001 2:55 PM [EST]

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