Verbal Agreements: Are They Binding for Bonuses?| Mann & Elias

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Verbal Agreements: Are They Binding for Bonuses?

Did your employer promise to compensate you with a bonus? Without being in a written contract, chances are you might have to fight aggressively for the promised payment, primarily if your boss forgets or changes his or her mind. Although it can be complex, oral agreements are considered contracts. Assuming the contract is valid, the agreement between you and the employer is binding. When it comes to promised pay, verbal contracts can get complicated, requiring assistance from employment attorneys for bonus disputes.

Understanding Employment and Bonus Contracts

Contracts (whether verbal, written, or implied) must meet specific criteria before the judge considers them valid. One party must offer a clear offer, and the other party must accept it for the deal to work. Another element of bonus contracts is “consideration,” meaning both parties should give up something in exchange for the agreement.

  • As an employee, the implication is that you will continue to keep up the great work and go above and beyond expectations.
  • As an employer, you provide a reward of value (bonus) to encourage and award the employee for their efforts.

In California, employee bonuses get enforced in court. With the help of an attorney for binding verbal agreements in LA, you might be able to hold an employer accountable based on detrimental reliance. However, you must be able to prove the following:

  • Promises were made to you.
  • Your reliance on such promise was reasonable and foreseeable.
  • There was reasonable reliance.
  • The reliance was detrimental.
  • Your employee rights would get violated without an enforced agreement.

The only time a promise is not contractual is if it is one-sided. For instance, if an employer promises to give you a bonus, the guarantee is considered binding. You have a legal responsibility to continue working as opposed to just getting the bonus without doing so.

When Is It Reasonable to Rely on Promises?

It is reasonable to rely on a verbal bonus if your employer showed signs expecting that you rely on that promise. For example, it would not be wise to expect payment from someone that offers one million dollars if you know they do not have that in the bank. Keep in mind, in court, your workplace attorney in Los Angeles also needs to prove that you reasonably relied on the extra payment. If you spent more than the bonus amount on a car down payment or house renovations, you could prove that you expected to get repaid. Laws vary, making it hard to prove this in court without an experienced legal team by your side.

Enforceability

The biggest concern for verbal agreements is enforceability. In court, the judge must be able to obtain central terms of the agreement to enforce it. Unfortunately, oral accounts from both sides make the case harder. If you and your employer are not on the same page regarding the contractual agreement in court, it can hurt your chances of retrieving the bonus without taking the legal process one step further. Therefore, it is easier for the judge and jury to assess written contracts.

Proving the Verbal Contract

In addition to enforcing the verbal bonus, employees often fail to prove “the existence” of such an agreement. There are limited ways that can help you demonstrate an employer made an offer, like:

  • Performing services per the contractual agreement
  • Noticing changes in payment. An attorney will use this to confirm a deal was struck between both parties
  • Witness statements from co-workers that may have overheard the offer
  • Written communication referencing the agreement in an email or message

Statute of Fraud

Statute of fraud is a legal term that requires contracts to be drafted and offered in writing for it to be enforceable. The purpose is to avoid conflict that usually arises when parties disagree over what was said and assured. In California, it applies to cases including:

  • Agreements that take more than a year to complete
  • Selling commodities that are worth at least $5000
  • Repaying debts
  • Real estate

Depending on your case, the judge might request that it get transcribed as a written agreement, especially if it has not been in effect within a year of dispute. Make sure to have a bonus dispute attorney in LA review it should it come to this. Look out for signs of retaliation or discrimination, as disputes handled in court can be uncomfortable and challenging.

Statute of Limitations

Keep in mind there is a statute of limitations for verbal contracts. During this time, lawsuits should get filed against the employer. It gives plaintiffs the chance to recover damages when there is a breach in the agreement. The statute is much shorter than written contracts because it requires new evidence and testimonies.

  • Per Section 337 of California’s Labor Code – employees have four years to sue and reach an agreement.
  • Per Section 339 of California’s Labor Code, the statute of limitations is two years for oral bonuses.

Reach Out to A Lawyer for Unpaid Bonuses

Sometimes putting the contract in clear terms on a written document can help reinforce a bonus. Our Los Angeles labor attorney for employees will ensure that the agreement gets presented in clear terms and your legal rights and interests are protected.

What To Learn More About Employment Bonuses? Give Us a Call at Mann & Elias

The Law Offices of Mann & Elias is an employment law firm that provides guidance and legal support for individuals facing issues in the workplace. We represent clients at every level of the state and federal court systems in lawsuits regarding discrimination, wrongful termination, unpaid wages, and more. When your case is in our hands, we hope to minimize stress and concerns associated with work.

Workplace disputes and negotiations can be complicated and uncomfortable between an employee and employer. In many cases, an employer can retaliate, causing individuals to feel disadvantaged in the company. When you retain one of our lawyers, you will be well-protected and advised. While there are thousands of lawyers to choose from, we believe our success rooted in:

  • 50+ years of trial experience
  • Excellent advocacy skills
  • Intense preparation and research
  • Quality care

Since our partnership began over 20 years ago, we have settled hundreds of claims, completed 100 jury and bench trials, and recovered more than $18 million in settlements. In the end, our goal is to understand what you need and achieve the best outcome for you by focusing on those needs. For dedicated representation with no upfront fees, give us a call at 323-866-9564 or email info@mannelias.com.

 

 

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