Ask any investment banker streaming through any Starbucks in midtown at 1 a.m., they’re not doing it for the base pay, but for the bonus. And Chris Parkin of Shipman & Goodwin contemplates in this recent post whether telling an employee he or she is eligible for a bonus is enough to create a contractual obligation.
Parkin bases his observations on a recent case from the Connecticut Appellate Court [PDF]. In this case, the employee worked for a financial firm for 20 years and was used to getting large bonuses that generally exceeded his annual base pay, Parking explains. Then, during the financial crisis, the firm restructured the bonus system using vesting bonds, which would become due to the employee at certain periods over the next three years. The employee resigned and the firm determined, because of their new structure, he forfeited the right to collect on his bond. The employee sued, saying he was contractually entitled to a bonus.
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