Earlier this year, we highlighted that the Massachusetts Wage Act (the “Wage Act”), while providing powerful protections to Massachusetts workers, does not apply to a profit-sharing arrangement tied to an employer’s overall profits. Now, another Massachusetts court—this time the District Court’s Appellate Division—has imposed an additional limitation in holding that the Wage Act does not apply to contingent retention bonuses.
Background Facts
In Nunez v. Syncsort Inc., the employer awarded a new hire retention bonus payable in two installments, but the bonus was subject to a number of conditions, including a requirement that an employee needed to remain in good standing with the employer through two designated retention dates in order to be eligible to earn and receive the bonus. The employer paid the employee the first installment of the retention bonus on the first retention date, but the employer terminated the employee on the second retention date without cause and refused to pay the second installment. The day after the termination, the employee sued the employer and the employer paid the second installment.
Decision
The sole question before the Court was “whether the retention bonus constitutes a ‘wage’ under the Wage Act.” In analyzing this issue, the Court noted the absence of any prior binding precedent on this question. The Court’s analysis did not expressly reference or address certain cases that have implied that there could be circumstances in which a bonus...
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