Fact or Fiction: Denying a discretionary bonus may be discrimination?

That’s right folks. It’s time for another edition of “Fact or Fiction” a/k/a “Quick Answers to Quick Questions” a/k/a QATQQ f/k/a “I don’t feel like writing a long blog post.”

Many claims of discrimination require proof of what’s called an “adverse employment action.” A firing would qualify; so would an unpaid suspension. (But, not a paid suspension). Really, it’s anything that “materially adverse” to one’s job.

Ok. Suppose an employer withholds a discretionary bonus. Could that be discriminatory?

Answer: It depends.

Spoken like a true lawyer. But, hear me out. For, you see, until recently, there was this opinion from the Seventh Circuit Court of Appeals, in which the court concluded that withhold a discretionary pay increase could not qualify as an adverse employment action.

But, yesterday, the Second Circuit Court of Appeals backhanded the Seventh Circuit opinion and concluded, in this case, that “the fact that the employer has discretion whether to grant bonuses or raises does not support the conclusion that an employer may freely allocate them on the basis of racial or religious bias, or disability discrimination.”

Either way, you can withhold a discretionary bonus as long as that decision is not motivated by discriminatory motives.