Mark Dove v. Rose Acre Farms, Inc.

Indiana Court of Appeals · Contracts

Contractsemployee bonusconditions precedentstrict compliancesubstantial performanceimpossibilityforfeitureabsenteeism

Facts

Rose Acre operated a voluntary employee bonus system under which all bonus programs required the employee to avoid tardiness and avoid missing work for any cause, unless missed time was made up within the same week. Rust offered Dove, a construction crew leader, a $6,000 bonus if certain construction work was completed in 12 weeks, and that agreement was amended the same day to a 10-week term with a $5,000 bonus so Dove could return to law school. Dove admitted he understood the agreement required him to work five full days a week for ten weeks and that any absence, including illness, would forfeit the bonus. In the tenth week Dove became ill with strep throat, left work, missed two days, and Rose Acre refused to pay the bonus solely because he had not worked five full days a week for ten weeks.

Issue

Whether an employee who knowingly agrees to a bonus plan requiring strict attendance may recover the bonus under substantial performance or impossibility principles after missing two days because of illness. More specifically, the question was whether Dove's illness excused his failure to satisfy the attendance condition of the bonus contract.

Rule

An employee is not entitled to a bonus until the time stipulated for payment or until the contract's designated conditions have been fulfilled, absent modification, waiver, or nonfulfillment caused by the employer's act or omission. Where a bonus plan's conditions are well known, unambiguous, and essential, courts will enforce them as written and will not use substantial performance to excuse violation of an essential condition; impossibility does not permit a plaintiff to recover a bonus when the plaintiff himself failed to perform the contract's conditions.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Columbus, Ohio, Linton Fabrication offered crew supervisor Aaron Pike a voluntary $8,000 bonus if he completed a warehouse retrofit in eight weeks and worked every scheduled day during that period, with any missed day forfeiting the bonus unless made up that same week. Aaron knew the rule, finished the retrofit on time, but missed one Wednesday because of a migraine and could not make up the time until the following Monday.

Is Aaron entitled to the bonus?

Explanation. The majority rule is that an employee is not entitled to a bonus until the time for payment arrives and the contract’s designated conditions are fulfilled, absent modification, waiver, or employer-caused nonfulfillment. Where the attendance condition is clear, well known, and central to the bonus plan, the court enforces it as written and does not excuse noncompliance merely because the employee completed the project. Aaron knowingly violated an essential attendance condition, so no bonus is due. (Derived from Mark Dove v. Rose Acre Farms, Inc. (n.d.).)