Clark Griswold’s Bonus

Happy holidays to all!

One of my favorite Christmas/seasonal movies is National Lampoon’s Christmas Vacation. In my view it’s full of memorable moments and quotable lines. See, e.g., “our motor home’s septic tank is at capacity!” As with most movies, there are also a host of legal issues lurking – which, to a law student or lawyer, can’t be unseen. \

Here I’ll discuss one legal issue in the movie – namely, the main character’s entitlement (or lack thereof) to his Christmas bonus.^[1]As in many movies, there are a number of legal issues that make it an ideal law school “issue spotter” exam. These include, but are not limited to (in no particular order): a potential product liability claim against the manufacturer of the attic trapdoor ladder that strikes Clark in the head; claims by Todd and Margo Chester arising from damaged windows, Hi-Fi stereo, and carpet, as well as negligence arising from being attacked by a squirrel while on the premises; and a nuisance claim arising from illegally emptying a septic tank into a storm sewer.

A running theme/plot point throughout the movie is main character Clark Griswold’s waiting for his Christmas bonus, which he has basically already spent by overdrawing his checking account to put a deposit down on an in-ground swimming pool. The issue comes to a head on Christmas Eve, when he receives his bonus via messenger. The problem? Rather than receiving the large cash sum that he was no doubt expecting, he instead learns that his boss, Mr. Shirley, has decided to cut out (cash) bonuses this year, and has opted instead to enroll his employees in a “Jelly of the Month Club.” While this is indeed “the gift that keeps on giving”, it falls far short of what Clark was expecting.

Assuming New York law applies – and further assuming Clark’s boss reneges on his (verbal, unwritten, likely made under duress) promise to reinstate Clark’s cash bonus (plus 20%) – does Clark have a legal claim?

It depends.

Generally,

Under New York law, “[a]n employee’s entitlement to a bonus is governed by the terms of the employer’s bonus plan.” Weiner v. Diebold Grp., Inc., 173 A.D.2d 166, 568 N.Y.S.2d 959, 960 (1st Dep’t 1991). And so, a “ ‘bonus’ payable at the discretion of the employer” is “subject to forfeiture” if the bonus plan so provides. Id. By contrast, a guaranteed commission that an employee has already “earned” is not subject to forfeiture upon termination, even if the plan provides otherwise.

Iqbal v. Teva Pharmaceuticals USA, Inc., 753 Fed.Appx. 50, 55 (2d Cir. 2018) (Summary Order).

Unfortunately, we don’t know (a) whether Clark has a contract, (b) whether his employer has a bonus plan, and, if so, (c) what it says – i.e., whether the bonus is discretionary, and what conditions trigger it being “earned”.