On October 14, 2006, Kenneth J. Sugarman, an associate at Rudy Exelrod & Zieff, LLP, spoke in San Francisco, CA on breach of contract and unpaid incentive compensation.
When employees have employment contracts, the employers need to understand terms relating to bonus such as the timing of payment, and the ability to terminate. For instance, “cause” for termination may be interpreted to mean a person willfully not doing a job, such as drinking while at work, or failing to perform a job.
Employers should be aware that bonuses in the contracts may be treated as wages under the Labor Code. When there is a violation of a Labor Code, the employee who files a lawsuit may seek attorney fees and costs versus in a breach of contract action where the fees and costs come into play only if they are written into the contract. For the employee, it is more strategic to have a violation of the Labor Code than a breach of contract action.
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