Employment Issues

My Company Just Stiffed Me Out of My Bonus: Can I Sue?

January 12, 2015 | Malecki Law Team

The financial industry is one built on commissions on the sales side and bonuses in the back office. While sales staff can often readily determine where they fall on the commission scale to determine their net payout, non-sales personnel do not typically have that luxury. Non-sales employees such as product engineers, traders and the like frequently receive performance bonuses that are not tied to any predetermined scale or schedule. Just this past week Citigroup and Bank of America reportedly shrunk their bonus pool for certain investment banking, trading and other securities related employees.

Such performance bonuses are usually understood that they are not above and beyond, but rather a necessary part of the employee’s annual compensation. Given that many bonuses may be multiples of an employee’s relatively small annual salary, not receiving a year-end bonus can be devastating for someone who was counting on it. Those who get “stiffed” out of their bonus may find themselves facing the year ahead with uncertainty. Worries like “How am I going to pay my mortgage? Or my child’s tuition?” can quickly become an unfortunate reality.

The first step someone in this position usually takes is speaking with their supervisor or a representative in their company’s HR department. If you have already done this, you were likely told that your bonus was “discretionary” and the firm did not owe you a penny.

New SEC Whistleblower Rules Become Effective

August 12, 2011 | Malecki Law Team

Today, the SEC‘s new whistleblower program under the Dodd-Frank Act becomes effective, and is on the minds of many New York securities lawyers. These new rules were devised in such a way to provide an incentive for would-be whistleblowers to come forward and assist the SEC with investigations of possible securities law violations. Under these new rules, if an individual provides the SEC with original information about possible federal securities laws violations, and that information leads to a recovery by the SEC of $1 million or more, that individual would be entitled to receive up to 30% of the sanctions received by the SEC.

Under the new rules, internal reporting is encouraged, but it is not required. Individuals may instead go directly to the SEC. However, the value of internal compliance programs is addressed in the release, and there are incentives in place in the new rules to urge whistleblowers to report internally first.

There are also a few groups of individual who, for public policy reasons, are excluded from participation under the new rules. These include: compliance and internal audit personnel; officers, directors, trustees and partners who only discover the violations as a result of internal compliance procedures; public auditors who learn of the violations in the course of an engagement. However, these people may be eligible under certain circumstances, such as: they reasonably believe that disclosure is necessary to prevent the company from causing substantial injury to the property or financial interests of the company or investors; they reasonably believe that the company is impeding an investigation of the misconduct; or at least 120 days have passed since the initial internal report. Attorneys are also excluded, provided that they learned of the violations directly from attorney-client communications.

FINRA Rule Proposal Could Set the Stage For Broker Class Actions

July 29, 2011 | Malecki Law Team

Investment News reports that FINRA has authorized its staff to propose a new rule that would ban “collective action” employment claims under the Fair Labor Standards Act or the Age Discrimination in Employment Act from arbitration. This rule would have to be approved by the SEC before it could take effect, but it has potential longterm significance for New York securities lawyers and the American workforce at large.

Collective action claims differ from class actions in that a potential plaintiff must choose to “opt in” to the lawsuit, while class actions have the effect of automatically including covered plaintiffs, but allow individuals to opt out.

FINRA has maintained that its rules do not allow for collective or class actions in its dispute resolution system, but FINRA rules only mention class actions. Federal courts have repeatedly ordered that collective action wage and hour cases be heard in FINRA arbitrations.