Wednesday, September 13, 2023

If you bet on which of your employees will get Covid, you probably shouldn’t qualify for a bonus

In late 2020, Tyson Foods fired seven of its pork processing plant managers after they were caught betting on which of their employees would next get sick with Covid. At that time, more than 1,000 Tyson employees had fallen ill, and six had died. In announcing the firings, the company's President and CEO said, "The behaviors exhibited by these individuals do not represent the Tyson core values, which is why we took immediate and appropriate action to get to the truth. Now that the investigation has concluded, we are taking action based on the findings."

Not content with leaving well enough alone, five of the seven fired managers sued Tyson Foods claiming that the company owed them a bonus payment pursuant to the company's Annual Incentive Plan. 

That Plan made it clear that any bonus payments were discretionary by the company: "All allocations and individual Awards under this Plan are considered fully discretionary by Tyson Foods."

Moreover, the bonus award calculations that Tyson provided to employees also confirmed the discretionary nature of the bonus payments: "Any payouts made to eligible team members under the AIP are considered fully discretionary by Tyson Foods, and may be adjusted for corporate, business unit and individual contribution and performance as determined by Tyson Foods in its sole discretion. This statement (as well as any information contained in this statement) does not constitute … an agreement to pay a specific salary or incentive amount."

Those two facts proved fatal to the wage claims of the five plaintiffs, according to the district court:

The express language of both Tyson's AIP policy and the AIP statements on which plaintiffs rely could not be more clear: Tyson was under no contractual obligation to make AIP bonus payments to plaintiffs for their work in 2020. As such, the withheld AIP bonuses are not "wages" that plaintiffs may recover.

There are two key takeaways here:

1./ Unless you want to create a binding contract to pay bonuses to your employees, build some discretion into your bonus policies and programs. 

2./ Judges are human beings, too. These are five of the most unsympathetic plaintiffs you will ever come across. They bet, Squid Game style, on the life and death of their employees. If there was any way to dismiss their claims, you get bet a judge would have found it.