773 F. Supp. 2d 397
S.D.N.Y.2011Background
- Bader and Auerbach, former Wells Fargo Home Mortgage managers, allege they were improperly denied incentive bonuses due under Wells Fargo bonus plans.
- Bader was terminated July 24, 2009; Auerbach was terminated July 23, 2009; both claims concern post-termination bonus eligibility.
- The 2009 Area Manager Plan (Bader) and the 2009 Branch Manager Plan (Auerbach) set conditions for NOI bonuses, volume overrides, and true-ups, including employment status date requirements.
- Wells Fargo amended the plans on June 21, 2009, increasing NOI thresholds and modifying calculations, with amendments stated as effective for certain post-amendment fundings.
- Plaintiffs seek NOI bonuses, volume overrides, true-ups, commissions, President’s Club, partnership bonuses, and severance; Wells Fargo moves to dismiss or for judgment on pleadings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether bonuses are contractually due given employment through target dates | Bader and Auerbach contend plans entitle them to bonuses despite termination. | Wells Fargo argues eligibility required employment on specific dates and/or completion of conditions, which were not met. | Bader and Auerbach not entitled to some post-termination bonuses; some claims survive where funded prior to termination and where terms permit. |
| Whether funds for pipeline loans are recoverable as bonuses | Payments for loans in the pipeline should be included as earned bonuses. | Bonuses require loans to fund before termination; pipeline loans not funded thus not payable. | Volu me overrides on pipeline loans are not recoverable as bonuses; however, there is potential for recovery on loans funded prior to termination. |
| Whether implied contract, quantum meruit, and promissory estoppel claims survive given written plans | Plaintiffs seek quasi-contract and estoppel theories for bonus payments. | Existence of comprehensive written plans precludes quasi-contract and promissory estoppel claims. | Implied contract and quantum meruit claims dismissed; promissory estoppel claims dismissed due to conflicting written agreements. |
| Whether NY Labor Law § 193 applies to these incentive payments | Bonus/commission payments may be wages under § 193; claims for improper deductions may lie. | Incentive compensation is not wages where contingent on plan terms and end-period adjustments. | Bonuses not wages; § 193 claims dismissed or limited accordingly. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. Supreme Court 2009) (plausibility pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. Supreme Court 2007) (pleading on plausibility)
- Broder v. Cablevision Sys. Corp., 418 F.3d 187 (2d Cir. 2005) (integral documents can be reviewed on motion to dismiss)
- Verzani v. Costco Wholesale Corp., 641 F. Supp. 2d 291 (S.D.N.Y. 2009) (contract integration; documents incorporated by reference)
- Assoko v. City of New York, 539 F. Supp. 2d 728 (S.D.N.Y. 2008) (contract incorporation principles; reliance on integral documents)
- RBS Holdings, Inc. v. Wells Fargo Century, Inc., 485 F. Supp. 2d 472 (S.D.N.Y. 2007) (contract/document incorporation on motions)
- Yak v. Bank Brussels Lambert, 252 F.3d 127 (2d Cir. 2001) (careful handling of contract-related claims)
- Dean Witter Reynolds, Inc., 429 N.Y.S.2d 653 (N.Y. App. Div. 1980) (incentive compensation not wages where contingent)
- Truelove v. Northeast Capital & Advisory, Inc., 95 N.Y.2d 220 (N.Y. 2000) (bonuses conditioned on end of period employment)
- Samuels v. Thomas Crimmins Contracting Co., 1993 WL 36168 (S.D.N.Y. 1993) (test for incentive compensation not wages)
- Kudatzky v. Galbreath Co., 1997 WL 598586 (S.D.N.Y. 1997) (no quantum meruit where contract exists)
- O'Dell v. Trans World Entm't Corp., 153 F. Supp. 2d 378 (S.D.N.Y. 2001) (bonus entitlement governed by plan terms)
- Truelove v. Northeast Capital & Advisory, Inc., 95 N.Y.2d 220 (N.Y. 2000) (employment through period as condition for bonuses)
- Weinreb v. Hospital for Joint Diseases Orthopaedic Inst., 404 F.3d 167 (2d Cir. 2005) (promissory estoppel elements)