If your employer states on its internal website that there is an annual merit grid but it doesn’t actually use it during the year-end merit process, do you have the right to sue?

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If your employer states on its internal website that there is an annual merit grid but it doesn’t actually use it during the year-end merit process, do you have the right to sue?

Asked on December 26, 2014 under Employment Labor Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If there is *any* disclaimer on the website itself or in other, employment-related documents (such as an employee handbook) to the effect of any of the following--

* bonuses are discretionary

* the website or handbook does not create any rights

* rules, procedures, etc. are subject to change at will

* all employment is employment at will, and nothing in the website or handbook alters that

(Remember: the normal "default" state of U.S. employment is "employment at will"--employment where the employer has 100% free discretion as to hiring, firing, duties, title, benefits, pay, bonuses, etc. so long as the employer does not discriminate on race, religious, gender, disability or age [over 40] grounds.)

--then the website creates no rights for the employee and no obligation on the part of the employer to use the grid. Only if there are no such disclaimers and from the terms of the website material it appears that the grid is mandatory, not merely a form of guidance, in making merit decisions, might the grid create enforceable rights. Even if enforceable rights exist, if the employee sues, 1) he/she would have to prove that under the mandatory grid, he/she was entitled to something (e.g. a bonus); and 2) if he/she won, all he/she could get was what the grid might have given--so if, for example, under the grid, you might have gotten $1,000 more in bonus than you did, that's all you could sue for. Since suing your employer can have an obvious negative effect, it may not be worthwhile to do this.


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