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Business Closing - Can I claim my retention bonus?

Indio, CA |

I had a agreement with company that if I complete 12 months with company, I'll be paid a certain amount as retention bonus. If I resign before completion of 12 months then I am not eligible for retention bonus.
Now due to general lay off, company has asked employees to put their resignations. My 12 months are not over yet and I have resigned against my will. Can I claim my retention bonus now?

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Attorney answers 3


First, the retention agreement must be reviewed by an attorney in order to be able to provide you with an legal opinion on the rights and obligations the arise out of the contract. Otherwise, we would simply be guessing.

Second, just because an employer asks you to resign does not mean you have to. If the business is closing, it typically lays off its workforce. It seems there may be an ulterior motive for asking you to resign. Also it may be subject to a WARN notice, which requires 60 days notice under certain circumstances.

It is clear you need to meet with an employment law attorney, in your area, to review the contract and discuss the facts and circumstances of this closure.

They say you get what you pay for, and this response is free, so take it for what it is worth. This is my opinion based on very limited information. My opinion should not be taken as legal advice. For true advice, we would require a confidential consultation where I would ask you questions and get your complete story. This is a public forum, so remember, nothing here is confidential. Nor am I your attorney. I do not know who you are and you have not hired me to provide any legal service. To do so would require us to meet and sign written retainer agreement. My responses are intended for general information only.

David Andrew Mallen

David Andrew Mallen


Good answer. Just want add that WARN Act claims can also be pursued in Bankruptcy court, because the employees get some priority for wages.


Mr. Kirschbaum took the words right out of my mouth. Never, ever, *never* resign just because your employer tells you to. You are under no requirement to do so, and doing so may relinquish significant rights.

Determining whether you receive your retention bonus or not would certainly depend on what the agreement said, but it may be moot. Any company that is undergoing a general layoff is probably not able to pay retention bonuses. Nonetheless, you would be wise to contact an attorney to figure out what happened here.

Craig T. Byrnes

Disclaimer: Please be aware that I am not offering legal advice, nor forming an attorney-client relationship with you. I am not representing you, nor doing anything to protect your legal rights. If you believe that you have suffered a legal wrong, take action before any statute or limitations expires, or your right to do so may be lost forever. Good luck in your legal matter.

David Andrew Mallen

David Andrew Mallen


Well said, Craig.


The purpose of a retention bonus is, in part, to encourage continued employment. The courts are likely to interpret the agreement according to its terms, under the circumstances.

Clever lawyers can make sound legal arguments for interpreting contracts, but like my good colleagues say, you need to put that contract in the hands of an experienced lawyer.

David Mallen

David A. Mallen offers answers on Avvo for general information only. This offer of free, general answers is not intended to create an attorney-client relationship. If you need specific advice regarding your legal question, you should consult an attorney confidentially. Many experienced California labor and employment attorneys, including David A. Mallen offer no-risk legal consultations to employers and employees at no charge. David A. Mallen is licensed to practice law before all state and federal courts in California, as well as the California Labor Commissioner and the California Unemployment Insurance Appeals Board. Failure to take legal action within the time periods prescribed by law could result in the loss of important legal rights and remedies.

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