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Bonuses and FMLA Leave

In Clemens v. Moody’s Analytics, Inc., the issue of how Family and Medical Leave Act (FMLA) leave impacts an employee’s bonus was considered by the Second Circuit Court of Appeals.
Clemens alleged that Moody’s engaged in FMLA interference by the manner in which it prorated the bonus that he was entitled to under an incentive plan. Under Moody’s incentive plan, Clemens earned a bonus based on his individual performance as well as the overall performance of his team towards an annual sales target. After missing a little over 60 days of work, his bonus was prorated based on his contribution to the sales target. Clemens argued that the reduction of his bonus reflected FMLA interference.
The Second Circuit Court of Appeals reviewed the facts. To establish a claim of interference, Clemens had to show that he was denied benefits to which he was entitled under the FMLA. Evidence produced reflected that Moody’s “prorates payments under the Plan based on the length of the employee’s leave, regardless of the reason for the leave.” Clemens argued that his bonus was “self-prorating” in that his reduced work period would already yield a smaller bonus. However, the appellate court rejected that argument “Because the undisputed evidence showed that Moody’s neutrally applies its prorating policy to incentive payments under the Plan, as opposed to payments based on, for example, mere attendance, and there is nothing else to indicate a violation of the FMLA;” his claim for FMLA interference must therefore fail.