As published in the Connecticut Law Tribune on September 13, 2010
Overall, it has been a quiet year with regard to major judicial changes to Connecticut’s employment laws. Throughout the Connecticut Supreme Court’s term, which runs from September until May, the court dealt with only five major employment law issues and none of them produced any monumental changes. As a result, there is no need to revise an employer’s practices based on this term’s decisions.
Discretionary Bonuses Are Not Wages If They Are Truly Discretionary
In Ziotas v. The Reardon Law Firm, P.C., the Court dealt with the question of whether a discretionary bonus is considered wages under the Connecticut wage statutes. Plaintiff, who was an attorney, had an employment contract which included a provision that Plaintiff would receive a bonus each year, and that the amount of the bonus would be based on the success of the business, as well as Plaintiff’s seniority and quality of work. Each year, Plaintiff’s bonus was determined by the head of the firm. However, the year Plaintiff left the firm, he did not receive a bonus. As a result, he brought an action for unpaid wages. The Supreme Court found that a discretionary bonus which is not calculated based on a set formula does not constitute wages. An employer cannot be penalized for “failure to pay wages” if it chooses not to give a discretionary bonus.
While most of the focus from this case is the definition of wages, the definition of a discretionary bonus is another key issue. The law firm won this aspect of the case because the bonus was not based on a formula. There was no way to calculate the amount of the bonus. If the firm had been more specific in equating the specific criteria for the bonus to an amount of money earned, the opposite outcome would have been seen. Another practical note is that while there is no obligation to create a written policy defining your bonus structure, such a policy could be very helpful. Without such a writing, the terms of the bonus are left for the court to determine. So the take home from this case is to word all offers of discretionary bonuses in such a manner that their calculation is impossible and to put that wording in writing. Otherwise, the employer may lose the right to deny such a bonus and wages could be owed!
U.S.P.S. Is Not a Connecticut Employer under Workers’ Compensation Laws
In a decision important to the federal government, the Supreme Court decided the United States Postal Service is not an employer within the Connecticut Workers’ Compensation laws. The court reasoned in Lopa v. Brinker International, Inc., that because the federal government was not a corporation organized or created under the laws of Connecticut, it could not be considered a public corporation within the state, and does not fall under the workers’ compensation laws.
Employees Cannot Sue For Hidden GPS Systems in Company Cars
The Court, in Gerardi v. City of Bridgeport, ruled there is no private cause of action for an employee (whether working in the private or public sector) to seek relief under Connecticut’s electronic monitoring statute. This statute requires employers to notify their employees of all types of electronic monitoring used in the workplace. Based on prior litigation, we know that using GPS devises is considered electronic monitoring as regulated by this statue. In this case, the City did not inform its employees that it had placed GPS tracking devices in City owned cars. Based on evidence gathered from the GPS device, Plaintiffs were presumably subject to discipline for traveling to locations not required by their job assignments. Plaintiffs sued claiming they were entitled to notice of monitoring and damages when the City failed to provide such notice. The Supreme Court rejected this claim explaining that only the Connecticut Labor Commissioner can bring such an action.
This ruling does not mean that employers should ignore the requirements of the statute. To the contrary, the Labor Commissioner can penalize an employer for violations, and an employee may use administrative remedies provided under their collective bargaining agreement. However, this does mean employees cannot personally initiate the action. Hopefully, the result is that frivolous actions are slightly less likely. However, to protect the business, employers should still post the required notices in their workplaces regarding their rights to electronically monitor employee’s conduct.
Yet Another Case about Firefighters in New Haven
While the country was concentrating on Ricci v. DeStefano, a case regarding discrimination in the New Haven Fire Department that received national media coverage, the Connecticut Supreme Court was considering another discrimination case involving different New Haven firefighters. The case, Broadnax v. City of New Haven, was brought by several African-American firefighters who claimed the city’s process of “underfilling” high-ranking positions had a discriminatory impact on African-American firefighters. Underfilling is when “the fire department promotes an individual to a particular position, and the city’s budget has not allocated funds to pay the salary of that position….” The solution is funds for a vacant higher ranking position are used to pay for the newly appointed lower ranking position. Plaintiffs desired to be promoted to chief. However, since so many lieutenant positions had been underfilled, there was no money left to pay for new chiefs and plaintiffs were therefore denied promotions. Plaintiffs argued that the process of underfilling disproportionately benefited non-African American firefighters, in violation of the equal protection clause of the Fourteenth Amendment.
The jury awarded the plaintiff’s front pay and noneconomic damages. However, the Supreme Court reversed finding no evidence that there was any discriminatory impact or intent on the part of the city and concluding no reasonable juror could find discrimination in violation of the Fourteenth Amendment.
Court Sides with Employer on Issue of Collective Bargaining Agreement Construction
In Honulik v. Town of Greenwich (argued in the 2008-2009 term but officially released this past term), the plaintiff argued that under the collective bargaining agreement between the Town of Greenwich and the Silver Shield Association, the highest scoring officer on the promotional exam was to be promoted to captain. Plaintiff scored the highest, but a lower scoring lieutenant was promoted. The Town argued that the collective bargaining agreement did not cover the promotion to police chief, since the position was outside the bargaining unit. The Court agreed with the Town, stating that the promotion to police captain could not be a subject of bargaining or grievance between the union and the employer as the employee was promoted out of the bargaining unit. This is the same basic standard recognized at the federal level – if the issue is promotion out of the bargaining unit, the employee has no right to use the collective bargaining agreement to protest the promotion.
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As the Connecticut Supreme Court begins their new term this month, employees and employers alike should remain aware of the Court’s decisions. With the state’s increase in wage and hour enforcement, its crackdown on worker misclassification, and an economy that remains weak, it is likely that the next Connecticut Supreme Court term will see more employment law cases.
