Verbal Contract

[ebeck]

In negotiating salary and benefits for a job I accepted in Dec 2000, my future boss promised me a sign-on bonus and a retention bonus to be paid after one full year of employment.

I received the sign-on bonus in Jan 2001. Two weeks ago, I was informed that my position was being eliminated. As part of the discussion with the HR director, I inquired about the retention bonus. The HR Director new nothing about it. My boss is now denying he made the offer.

Would that offer constitute a legally binding contract? If so, how do I get my money?

 

[Michael Wechsler]

I'm unclear as to why you believe you are due the retention bonus since you only lasted 2 weeks on the job. Unless you negotiated otherwise, e.g. termination only with cause, you would likely be an at-will employee and could be terminated at any time. While there may be other theories of recovery such as your detrimental reliance on the offer, I do not think it is likely you will recover. It will not only be difficult to prove but it seems that you may not have covered the critical parts of the deal where your guaranteed term of employment was discussed.

 

[ebeck]

I did not last only 2 weeks on the job. I was on the job for nearly 14 months when I was informed that my position was being eliminated.

As an update. I was offered a prorated retention bonus for the period I will have been employed over one year (4 months).

 

[Michael Wechsler]

Was the retention bonus guaranteed? Was there a clause which stated that you could only be terminated for cause? Being given a prorated bonus would seem somewhat generous as one would think that since you were not retained, you could have been denied the entire bonus. Perhaps they didn't feel good about terminating you but, without other guarantees, these are difficult times. I don't know that there was bad faith here. Absent a contractual provision that would entitle you to what you are seeking or some type of bad faith or other unlawful conduct, I'm not sure that you would have a right to collect what you are seeking. You may want to scrutinize the terms of your employment contract.