In a recent decision, the Massachusetts Appellate Division of the District Court Department affirmed the trial court’s award of summary judgment in favor of an employer that had argued that a retention bonus did not constitute a “wage” under the Massachusetts Wage Act, M.G.L. c. 149, § 148. In doing so, the court found that the retention bonus was akin to contingent compensation that did not fall within the plain language of the Wage Act. Nunez v. Syncsort Inc., No. 23-ADCV-63NO (decided September 6, 2024).

In the underlying district court action, plaintiff Carlos Nunez brought a Wage Act lawsuit against his former employer, defendant Syncsort Inc., arguing that Syncsort had failed to timely pay him the second installment of his retention bonus on the date of his termination. The retention bonus had two conditions: (1) that Nunez remain employed at the company on his regular work schedule and (2) that Nunez remain in good standing through and by the designated retention dates. The parties agreed that Nunez had satisfied both of the conditions. One day after Nunez filed the lawsuit, Syncsort paid the second installment of the retention bonus. 

In the district court, the parties filed cross-motions for summary judgment based on a single legal issue–whether the retention bonus constituted a “wage” under the Wage Act. The court initially denied both motions. After the parties submitted a joint motion for reconsideration, the trial court granted summary judgment in favor of Syncsort. 

The sole question before the Appellate Division was whether the retention bonus constituted a “wage.” The Appellate Division noted that no Massachusetts cases have held that a retention bonus is a wage under the Wage Act. The Massachusetts Supreme Judicial Court had previously addressed contingent compensation akin to the retention bonus paid to Nunez. The Appellate Division looked to the analysis in Mui v. Massachusetts Port Auth., 478 Mass. 710 (2018), which addressed whether unused sick time paid out to departing employees, if certain conditions were met, constituted a “wage.” Specifically, the Appellate Division highlighted the statement in Mui that the Wage Act had never been interpreted to include any type of contingent compensation as wages, other than “commissions” that are due and payable to the employee. The Appellate Division concluded that the contingent retention bonus for Nunez, much like the contingent sick time in Mui, fell outside of the Wage Act.