Schultze v. ABN AMRO, Inc.
2017 IL App (1st) 162140
| Ill. App. Ct. | 2017Background
- Schultze worked ~25 years for ABN/LaSalle in senior executive roles; compensation historically included both salary and annual performance bonuses, determined by ABN’s established process (SMART metrics, predecessor comparators, unit bonus pool, etc.).
- In 2007–2008 ABN was being dismantled and sold; Schultze assumed expanded responsibilities (head of Global Markets North America and executive lead of Transition Leadership Team) and received retention payments but expected a 2008 performance bonus consistent with predecessors (in the $2–5M range).
- In March 2009 ABN informed Schultze his 2008 bonus would be $200,000 (subject to RBS deferral rules); Schultze protested, arguing ABN deviated from its longstanding bonus methodology (e.g., ignoring predecessor awards and not using typical SMART analysis).
- ABN terminated Schultze in April 2009 and conditioned severance on execution of a release; Schultze refused to release his 2008 bonus claim and so received no severance payment.
- Schultze sued under the Illinois Wage Payment and Collection Act seeking at least $2,375,000 (≈ $2M unpaid bonus + $375k severance). The trial court awarded $2M (offset by $200k paid) plus $375k severance, prejudgment interest, and attorney fees; ABN appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2008 bonus was "earned" final compensation under the Illinois Wage Payment and Collection Act | Schultze: ABN’s longstanding practice and express bonus notification created an agreement/unequivocal promise; he fully performed, so the large bonus was earned | ABN: Bonus was discretionary, not a contractual/agreed obligation, so not recoverable under the Act | Court: Held bonus was part of agreed compensation (agreement can be shown by conduct/past practice); ABN improperly changed the established methodology after performance — $2M awarded |
| Appropriate amount of bonus | Schultze: Evidence of predecessors’ bonuses, expanded duties, and satisfactory performance support at least $2M | ABN: 2008 industry losses and managerial discretion justified the $200k award; court should defer to employer’s judgment | Court: Found Kopp deviated from ABN’s method and ignored relevant comparators; $2M is minimum supported by evidence and within allowable $2–5M range |
| Whether conditioning severance on signing a release that waived bonus claims was permissible | Schultze: Requiring waiver of the Act claim as a prerequisite to severance improperly foreclosed rights under the Wage Payment Act; he executed a modified release preserving the bonus claim | ABN: Severance required a signed release; without a signed release there was no contract to pay severance | Court: Held conditioning severance on release of an Act claim was improper under the Act; Schultze was entitled to $375k severance he otherwise met the conditions to receive |
| Whether awarding relief opens floodgates or substitutes court judgment for business discretion | Schultze: (implicit) this is a fact-specific remedy where employer departed from its own procedures after employee performed | ABN: Ruling will encourage bonus disputes and intrude on employer discretion | Court: Rejected concern—facts were unique and remedy limited where employer failed to follow its promised process |
Key Cases Cited
- Andrews v. Kowa Printing Corp., 351 Ill. App. 3d 668 (discusses Act’s scope and de novo review of legal questions)
- Landers-Scelfo v. Corporate Office Systems, Inc., 356 Ill. App. 3d 1060 (an "agreement" under the Act can be shown by past practice and conduct; formal contract not required)
- Catania v. Local 4250/5050, 359 Ill. App. 3d 718 (elements to establish a Wage Payment Act violation)
- McLaughlin v. Sternberg Lanterns, Inc., 395 Ill. App. 3d 536 (distinguishes pro rata bonuses when employee did not perform full period)
- Hurd v. Wildman, Harrold, Allen & Dixon, 303 Ill. App. 3d 84 (upholding severance conditioned on execution of release generally)
- Golden v. McDermott, Will & Emery, 299 Ill. App. 3d 982 (same: releases in separation agreements enforceable)