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Inequitably reducing or denying bonus may be retaliation

by on
in Discrimination and Harassment,Employment Law,Human Resources

As employers, we would like to think employees would be grateful for bonuses no matter the amount. But employees may perceive a smaller than expected bonus (or a bonus denied) as retaliation for engaging in protected activity. If a supervisor who knows an employee complained about alleged discrimination withholds a bonus or authorizes a smaller bonus than the one recommended by an immediate supervisor, that may be grounds for a lawsuit.

Simply put, anything that looks like retaliation may lead to a lawsuit, and reducing or eliminating a bonus—unless done across the board—looks suspect.

Recent case: Wilma Vialpando complained that she was the victim of sex and national origin discrimination. When a project she had worked on with a colleague became the basis for a bonus, she expected to get the amount her immediate supervisor recommended: $5,000. When she got $2,000, she said it was retaliation and sued.

A jury agreed, awarding her $7,000 in damages. Vialpando’s employer asked the judge to throw out the award, arguing that a reduced bonus, even if it were “punishment” for complaining, simply wasn’t an adverse employment action. The court disagreed. It said any action that would dissuade a reasonable person from complaining about discrimination could be retaliation.

It didn’t help matters that Vialpando’s co-worker got the full $5,000. Plus, the supervisor who reduced the bonus had never before second-guessed a recommended bonus amount. The judge then made the reduced bonus even more expensive when he ordered the employer to pay Vialpando’s attorneys $40,000 for their services. (Vialpando v. Johanns, No. 05-CV-01904, DC CO, 2008)

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