As reported in the February 4, 2014 issue of Massachusetts Lawyers Weekly, Christopher R. O'Hara, a partner at Todd & Weld LLP, and Carole C. Cooke, an associate with the firm, successfully represented a senior executive at a high-tech sector company where he had worked for nine years. The company had financial difficulties beginning in 2008, at which time it instituted salary reductions and it also deferred payment of certain compensation which it called "bonuses," but which the complainant alleged were actually "commissions." The company put in place a written earn-back plan, which in an early draft was called a "Deferred Base Compensation Plan," but in its final iteration was renamed, "Retention Bonus Plan."
The complainant was terminated in 2012, only weeks after he alleged he had (yet again) complained about his withheld compensation and in response had been threatened with termination. The complainant also alleged that the company terminated him in an attempt to avoid paying him the six-figure commission he had earned for successfully managing the arbitration of a large legal dispute for the company. The company cited "cash constraints" as the reason for the complainant's termination, but was in the process of restoring all salaries at the time it terminated the complainant.
At the time of the complainant's termination, the company acknowledged owing him only a portion of what the complainant understood he was owed, the company offered to pay him over time rather than as a lump sum, and the company demanded a unilateral general release. In its proposed termination agreement, the company made its offered payment contingent on factors within its own control, even though the complainant's work necessary to earn the commission was concluded prior to his termination.
Following Todd & Weld's filing of a demand for arbitration on behalf of their client against the company and three officers, the company paid him a total of $266,519, but denied owing anything further. The company defended on the grounds that any amounts owed to the complainant were "discretionary bonuses," not "wages" or "commissions," and hence they were not owed under the contract and could not be the basis for a claim of violation of the Wage Act. The complainant argued that all amounts outstanding at his termination were wages or commissions and that his claims under the Wage Act for unpaid compensation and retaliation entitled him to mandatory treble damages, as well as mandatory attorneys' fees.
Several days before the arbitration hearing was scheduled to begin, a very favorable settlement was achieved. The company agreed to pay $750,000 in addition to the $200K+ the company had already paid after the arbitration demand was filed, resulting in a recovery of over $1 Million.
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