Fifteen years ago I started my legal career as an associate at a small law firm in Mobile. One day I answered a call from a guy who had worked as a regional manager for a company which owned a nationwide chain of pawn shops. The caller explained to me that the company he worked for paid him less than he actually earned under a bonus plan that the company established earlier in the year. The shortfall was approximately $25,000.00. After I heard his story and learned about how the company put corporate greed, executive compensation plans, and profits over promises that it made to its employees, I agreed to take his case.
The problem with most employment related cases where compensation is an issue is that Alabama follows the employment-at-will doctrine which makes it very difficult for employees to pursue claims like this against their employers. The client explained that he had already spoken with several attorneys about the matter and no one was willing to help him. Under the employment-at-will doctrine an employer can usually fire an employee or change the conditions of employment (i.e. compensation, salary, hours, job description, etc.) at any time for virtually any reason as long as it is not based upon discrimination. This was not a discrimination case because the client was a white male under the age of 50 and thus not covered under any federal discrimination law.
The thing that made this case different from a typical employment-at-will case is that fraud was involved. At the very beginning of the year the employer published a bonus compensation plan called DARE (Demand And Reward Excellence). Under the DARE plan the company agreed to reward employees for “excellence” based upon the performance of the store, area. or region that they were responsible for over a nine month period of time. The evidence that came out in the case revealed that the company had no intention of honoring the commitment that it made to its employees to reward their “excellence.” The evidence included testimony that even though the company decided to discontinue the plan in the middle of the year it never told its employees that the DARE plan would be discontinued. Therefore, the employees worked hard all year long in anticipation of this additional compensation. Although the company argued that the plan gave the company discretion to “modify the terms and conditions of the plan at any time for any reason” the evidence revealed that the committee given this authority never even met.
Although my client suffered the largest loss, other area managers and regional managers were also treated unfairly and their bonuses were arbitrarily reduced by thousands of dollars. The total amount of the bonuses that were not paid by the company was over $133,000.00 ($25,000.00 of which represented my clients loss).
The most amazing thing to me as a young attorney was that the company completely refused to see my client’s side of the story. The company never offered to discuss the issue and it fired my client immediately after he voiced concerns about the amount of the bonus that he was entitled to. The company vowed to fight my client “with vigor” which is a promise that it made good on. However, if the company had simply paid my client the $25,000.00 it owed him and given him his job back no lawsuit would have ever been filed. Instead, this company opted to deny the allegations and defend the claims raised by my client which ended up costing it (and its shareholders) a lot of money. Unfortunately this is the mentality of most large corporations and insurance companies faced with claims against them.
After several letters to the company president demanding that he pay my client what he was owed it became obvious that litigation would be required. Most people have no idea about the amount of time and effort that goes into filing a lawsuit. First and foremost an attorney has an ethical obligation to make verify that the facts and allegations contained in a complaint are true and accurate to the best of his or her information and belief. This verification process can take days or months depending upon the complexity of the case. Once the facts are verified then the attorney has to research the law and determine what legal claims can be made against the wrongdoer.
TO BE CONTINUED……
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