Schultze v. ABN AMRO, Inc.
2017 IL App (1st) 162140
| Ill. App. Ct. | 2017Background
- Robert D. Schultze worked at ABN (and predecessor LaSalle) for ~25 years as an executive; his compensation historically included salary plus an annual performance bonus calculated under a consistent internal methodology.
- In 2007–2008 Schultze took on expanded responsibilities (head of Global Markets North America and executive lead of the North America Transition Leadership Team) during ABN’s sale process; he expected a multi-million dollar 2008 bonus based on predecessors’ awards and past practice.
- ABN (by letter) notified Schultze of a 2008 bonus of $200,000 (subject to RBS deferral rules). Schultze disputed the amount and sought reconsideration; CEO Kopp reviewed and confirmed the $200,000 award but did not follow ABN’s historical calculation process.
- ABN terminated Schultze in April 2009 and conditioned severance payment on signing a release. Schultze signed a modified release preserving his bonus claim; ABN declined to pay severance.
- Schultze sued under the Illinois Wage Payment and Collection Act seeking unpaid earned bonus (~$2 million) and unpaid severance ($375,000). The trial court awarded $2 million (offset by $200,000 paid), $375,000 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: long-standing practice and ABN’s express notice created an "agreement"/unequivocal promise that a bonus was part of his compensation; he fully performed so bonus was earned | ABN: bonus was discretionary; no enforceable contract or agreement obligated payment of a multi-million bonus | Court: Affirmed for Schultze — past practice plus ABN’s express entitlement letter manifested an "agreement"; ABN improperly changed bonus methodology after performance, so $2M (minimum supported by evidence) awarded |
| Whether trial court improperly substituted its judgment for employer's discretionary bonus decisions | Schultze: employer cannot retroactively change promised methodology after employee performed; award lies within evidentiary range | ABN: courts should not override employer discretion and this risks many claims | Court: Rejected ABN — facts showed a departure from ABN’s usual process and clear manifestation of promise; award was within supported range and not speculative |
| Whether downturn in 2008 justified reduced bonus | Schultze: profitability was not a 2008 performance goal; objectives were risk reduction and transition and he met them | ABN: 2008 industry losses made high bonuses unreasonable | Court: Rejected ABN — testimony and evidence showed profitability was not a criterion in 2008 and Schultze met the transition goals |
| Whether ABN could condition severance on signing a general release that waived the Wage Payment Act claim | Schultze: ABN improperly conditioned severance on release of an Act claim; he signed a modified release preserving the bonus claim | ABN: Releasing claims is a valid prerequisite to severance; no severance absent signed release | Court: Held for Schultze — conditioning severance on waiving an Act claim is impermissible; severance owed ($375,000) |
Key Cases Cited
- Andrews v. Kowa Printing Corp., 351 Ill. App. 3d 668 (Ill. App. 2004) (standard for Wage Payment Act entitlement and review)
- Landers-Scelfo v. Corporate Office Systems, Inc., 356 Ill. App. 3d 1060 (Ill. App. 2005) (agreement under the Act can arise from past practice and need not be a formal contract)
- Catania v. Local 4250/5050, 359 Ill. App. 3d 718 (Ill. App. 2005) (elements for a Wage Payment Act claim)
- McLaughlin v. Sternberg Lanterns, Inc., 395 Ill. App. 3d 536 (Ill. App. 2009) (distinguishing earned-bonus claims where full-period performance did not occur)
- Hurd v. Wildman, Harrold, Allen & Dixon, 303 Ill. App. 3d 84 (Ill. App. 1999) (upholding release requirement as a contract term in severance contexts)
- Golden v. McDermott, Will & Emery, 299 Ill. App. 3d 982 (Ill. App. 1998) (enforcing release-as-condition-for-severance where lawful)