In June 2011, an arbitration panel of the Financial
Industry Regulatory Authority, Inc. ("FINRA") in New York awarded compensatory
damages of $493,906, plus costs, to a high yield trader formerly employed by
respondent Citigroup Global Markets, Inc. ("Citigroup Global Markets" or
"CGMI"), for breach of an implied contract to pay the trader a bonus for
2008. Sabri v. Citigroup Global Markets, Inc., Case No. 09-01121
(June 9, 2011).
Citigroup Global Markets, Inc. is a subsidiary of
The Sabri arbitration award is a positive
development for, among others, traders or brokers whom Citigroup Global Markets
or other financial services firms fired in late 2008 or early 2009 without paying the traders or brokers any bonuses for 2008.
In Sabri, the claimant, Yasir A. Sabri,
successfully maintained that Citigroup Global Markets, through its words or its
course of conduct, implicitly agreed to pay to the claimant a bonus for
2008. In November 2008, CGMI terminated the claimant's
employment. CGMI, in contravention of the parties' agreement,
refused to pay to the claimant a bonus for the ten-plus months that the
claimant worked for CGMI in 2008.
The claimant in Sabri was a high yield trader who joined Citigroup Global Markets in July 2005.
In the FINRA arbitration, the claimant brought causes of action for quantum meruit and
unjust enrichment against CGMI for failing to pay, to the claimant, a bonus
for work performed by him in 2008. The claimant sought damages of about
$750,000 from CGMI on his quantum meruit and unjust enrichment claims.
In the Sabri arbitration, Citigroup Global Markets unsuccessfully argued that any payment
by CGMI to the claimant of a bonus for 2008 was solely within CGMI's discretion.
The Sabri panel, flatly rejecting CGMI's stance, awarded, to the
claimant, compensatory damages of $493,906, plus costs. The arbitration
award specified that these compensatory damages included statutory interest for
a 28-month period.
The Sabri arbitration award is based on at least
two well-established principles which I have discussed in two recent articles,
First, New York state courts, the Second Circuit, and federal district courts
sitting in New York have determined, in numerous lawsuits by professionals in
the financial industry or in other fields, that the course of dealing between
the parties evinces an implied promise that yearly or semi-yearly bonus
payments are a part of the plaintiff's compensation.
Second, FINRA, NASD, and NYSE panels predominantly have
found that discharged employees are entitled to full or proportionate
bonuses for a previous year or years' work, despite employers' assertions
that the terms of employment-related documents make such bonuses wholly
If you are a professional who suspects that your former employer is unlawfully refusing to pay you a bonus
or incentive compensation owed to you and you live in the New York City
area, call Attorney David S. Rich at (212) 209-3972.
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