Employee Stiffed On Earned Bonus? Consider Illinois Wage Payment and Collection Act.

Perhaps the most famous movie scene involving an employee getting stiffed on a bonus is in the legendary film Christmas Vacation, when Clark Griswold (played by Chevy Chase) goes absolutely ballistic after his boss fails to pay his annual bonus and instead enrolls him in the Jelly of the Month Club.  Clark eventually received his bonus (and 20% more) after Cousin Eddie dragged Clark’s boss out of his home on Christmas Eve in his pajamas.  Of course, Cousin Eddie is not option in the real world (legally).  But one real world option is the Illinois Wage Payment and Collection Act.

The Illinois Wage Payment and Collection Act (IWPCA), 820 ILCS 115/1 et seq.,  is a powerful law that allows employees (and former employees) to sue for the timely and complete payment of earned wages or final compensation, including earned bonuses and commissions.  The IWPCA does not require a formal employment contract.  Rather, it only requires an “agreement” which is defined more broadly as the manifestation of mutual assent on the part of two or more persons. 

In Christmas Vaction, Clark Griswold complains that he received a holiday bonus every year for 17 years except the current one.  A similar scenario played out in Schultze v. ABN AMRO, Inc., 2017 IL App (1st) 162140 P24, in which the Illinois Appellate Court agreed that an executive employee was entitled to a $2 million annual bonus (not the $200,000 bonus ABN paid to him).

In Schultze, the executive never had a written employment contract.  Nevertheless, the court agreed that “ABN’s past conduct of awarding [the executive] an annual bonus for more than two decades manifested an agreement to award a bonus as a component of [the executive’s] total compensation.”  Based on this and other evidence, the court ruled that there was an “agreement” and “unequivocal promise” to pay the executive a bonus as part of his compensation.  The court rejected ABN’s argument that the annual bonus was discretionary.

The court agreed that in setting Schultze’s 2008 performance bonus, ABN deviated from a longstanding methodology that it had used to calculate executive bonuses in the past, including taking into consideration the bonuses paid to the executive’s predecessor.  The fact that ABN did not communicate the change in the bonus calculation methodology to Schultze before Schultze fully performed his employment responsibilities to earn his bonus for 2008 did not help ABN’s cause.  It is also noteworthy is that under the IWPCA, Schultze was awarded 5% prejudgment interest, attorneys’ fees and costs.

Attorney Antonio DeBlasio has been selected by Super Lawyers® for Business Litigation in 2008 and in each year from 2014 through 2020. Only 5% of attorneys receive this distinction. DeBlasio & Gower’s attorneys have over 35 years of combined experience representing businesses, individuals and estates in Illinois.  Contact him to discuss your wage and bonus claim at (630) 561-1124 or at deblasio@dgllc.net.