Termination for Demanding Payment of Earned Bonus Held Actionable

Here in Virginia, employment is presumed to be “at-will”: an employer can terminate the employment relationship with or without cause, upon reasonable notice, for any reason or no reason at all. Employees have the same right. The employment-at-will doctrine is particularly strong in Virginia, but there are some limited exceptions. An employee cannot be terminated without cause if an applicable employment agreement requires good cause for termination. A termination will also be deemed unlawful if it violates state or federal anti-discrimination laws or if the reason for the termination violates public policy.

Under the public policy exception to the employment-at-will doctrine, an employer may not terminate an employee in violation of explicit statements of public policy or in violation of laws that don’t expressly state a public policy but are designed to protect property rights, personal freedoms, health, safety, or welfare of the people in general and are in furtherance of an underlying and established public policy. Bowman v. State Bank of Keysville, 229 Va. 534 (1985). In practice, courts apply the public-policy exception only in rare circumstances, and not every violation of public policy will give rise to a valid wrongful discharge claim.

Recently, the Fairfax County Circuit Court overruled a demurrer to a wrongful termination claim based an alleged termination in violation of the public policy underlying Virginia’s Wage and Payment Act. A demurrer tests the legal sufficiency of the facts alleged in the complaint and determines whether a complaint states a cause of action upon which relief can be granted. When ruling on a demurrer, a court assumes that all factual allegations are true and does not decide the merits of the claim.

In Blanchard v. Capital One Services, LLC, the plaintiff alleged that his direct supervisor informed him that he had earned a sizable performance-based bonus after a favorable 2014 annual review. When the plaintiff later asserted his right to collect the money.pngbonus, he was fired and denied payment of the bonus. The plaintiff alleged that his termination violated the public policy prescribed by the Wage and Payment Act.

Section 40.1-29(c) of the Wage and Payment Act makes it unlawful for an employer to withhold an employee’s “wages or salaries” without the employee’s written consent. Typically, this occurs when an employer attempts to withhold a departing employee’s final paycheck. But what about earned bonuses? The statute does not define “wages” or “salaries,” and Judge Penney S. Azcarate recognized Virginia courts have never decided whether earned bonuses could be considered a “property right” that could lead to a viable Bowman claim. In finding that they could, the court noted that wages are defined in other Virginia statutes to include bonuses and that extending the definition of “wages and salaries” to include an already earned bonus was not “a large divide to traverse.”

Since at the demurrer stage a court must accept the plaintiff’s allegations as true (including the allegation that the bonus was performance-based and earned, and not merely discretionary), Judge Azcarate determined that the plaintiff alleged facts sufficient to support a claim for wrongful termination in violation of the public policy embodied in the Wage and Payment Act.

By: Amy Epstein Gluck, Contributor

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