Employees should be on their guard when contemplating a secondment or assignment agreement and ensure that they understand through counsel what law applies and where a dispute can be adjudicated. On January 14, the Second Circuit in Martinez v. Bloomberg LP affirmed the dismissal of an employee's discrimination claims for improper venue, underscoring the enforceability - and importance - of international forum selection and choice of law clauses in cross-border employment agreements. The court held that an American employee's discrimination claims could only be adjudicated in London under English law, as his employment agreement prescribed.
Over recent weeks, several banks that we are aware of have handed to thousands of their FINRA-regulated employees onerous new clawback agreements with the condition that if they do not sign them they will not receive their 2012 bonuses. This only the beginning of the bad news. These new clawback agreements contain provisions that allow the bank to clawback part of an employee's earned and paid cash bonus merely because the employee resigns during the ensuing two or three years. Thus, for example, a bank can clawback part of the 2012 bonus (already paid and taxed in 2013) if the employee leaves during 2015.
In a decision dated August 10, 2012, a federal court in Manhattan ordered in Martinez v. Bloomberg LP, No. 11 Civ. 7514 (JMF) (S.D.N.Y. Aug. 10, 2012) that an American executive working overseas for Bloomberg LP was obliged to file his employment-discrimination case under British law in a U.K. court. Such cases point to a need for those choosing or assigned to work overseas to obtaining a lawyer's advice before signing on the dotted line.
Most employees in the financial services industry work all year long to earn an annual bonus, which often represents a major portion of their total compensation for the year. Unfortunately, employees not protected by a contract or an offer letter that specifically calls for a bonus payment if and when terminated (even if before year end), will likely be out of luck this season, even if they worked an entire fiscal year.