                NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                           File Name: 15a0119n.06

                                         No. 14-3356

                          UNITED STATES COURT OF APPEALS
                                                                                    FILED
                               FOR THE SIXTH CIRCUIT
                                                                                Feb 10, 2015
                                                                          DEBORAH S. HUNT, Clerk
EMILY BAHR,

       Plaintiff-Appellant,
v.
                                                    ON APPEAL FROM THE UNITED
                                                    STATES DISTRICT COURT FOR THE
TECHNICAL CONSUMER
                                                    NORTHERN DISTRICT OF OHIO
PRODUCTS, INC.,

       Defendant-Appellee.


BEFORE:        DAUGHTREY, MOORE, and CLAY, Circuit Judges.

       CLAY, Circuit Judge.       Plaintiff Emily Bahr appeals the district court’s grant of

summary judgment in favor of Defendant Technical Consumer Products, Inc. (“TCP”),

dismissing Bahr’s claim for contract damages based on disputed bonus compensation, in this

action before us pursuant to diversity jurisdiction under 28 U.S.C. § 1332. We REVERSE the

judgment of the district court for the reasons stated below and REMAND for further proceedings

consistent with this opinion.


                                      BACKGROUND

I.     Procedural History
       Bahr filed her breach of contract claim in the Portage County, Ohio, Court of Common

Pleas on April 5, 2013.1 On May, 9, 2013, TCP removed the case to the United States District



       1
         Bahr also asserted claims for damages under the alternative theories of promissory
estoppel and unjust enrichment. She also appeals the district court’s grant of summary judgment
                                           No. 14-3356


Court for the Northern District of Ohio, on the basis of diversity jurisdiction. Bahr’s complaint

included six counts: 1) Breach of Express Bilateral Contract; 2) Breach of Express Unilateral

Contract; 3) Failure to Remit Wages; Chapter 181 of the Minnesota Statutes; 4) Failure to

Remit Wages; Ohio Prompt Pay Act – Ohio Rev. Code § 4113.5; 5) Promissory Estoppel; and

6) Unjust Enrichment.

       On July 8, 2013, the court raised the issue of jurisdiction because the amount in

controversy was dependent on the choice of law. The underlying claim is for $51,716, less than

the $75,000 jurisdictional threshold required by § 1332, but Bahr could potentially recover

double that amount due to civil penalties that might attach if the claim was resolved under

Minnesota law. On December 2, 2013, the district court held that Minnesota law was the correct

choice of law, and thus, diversity jurisdiction was established.

       While the court addressed the jurisdictional issue, the parties conducted discovery in

advance of a December 16, 2013, dispositive motion filing deadline. On December 10, 2013,

Bahr filed a motion to amend the complaint. Both Bahr and TCP filed motions for summary

judgment on December 16, 2013. Bahr’s motion sought summary judgment on count two,

breach of express unilateral contract, and count three, failure to remit wages. TCP’s motion

applied to all counts. On March 17, 2014, the district court denied both of Bahr’s motions, and

dismissed the complaint after granting TCP’s motion for summary judgment in its entirety.




with respect to these claims, as well as the district court’s denial of her motion for leave to
amend her complaint.


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II.     Factual Background
        A.      Hiring Process and Pre-Employment Negotiations

        In April of 2010, Bahr responded to a job posting for the position of District Sales

Manager, listed on Monster.com. Bahr, a resident of Minnesota, was at that time working for

Outset, Inc. as a Product Support Specialist. Her resume and cover letter were forwarded to

TCP, a manufacturer and distributor of energy-efficient lighting products, headquartered in Ohio.

        Shortly thereafter, the Human Resources Department at TCP headquarters contacted Bahr

to set up a screening interview over the telephone. Bahr discussed her previous work history and

was given a description of the job responsibilities during that interview. The position would

entail the management of all sales for the Commercial & Industrial Division of TCP (“C&I”)

within the states of Minnesota, North Dakota, and South Dakota. No compensation plans were

discussed during this phone interview.

        Bahr thereafter was invited to meet in person with both the TCP Regional Sales Manager

and the TCP Senior Vice President of Sales, Mike Masino. Masino explained during this

interview that the District Sales Manager position was new to TCP. The Company was moving

away from its reliance on independent contractors in an attempt to boost sales. Masino had been

hired the previous year with the expectation that he would triple sales volume within C&I, while

continuing to improve the profit margin on such sales. Masino later designed the bonus plan at

issue in this case with these goals in mind. However, neither this nor any other bonus plan were

discussed during Bahr’s second interview. The same was true for her third and final interview.

        On Wednesday, June 9, 2010, TCP offered Bahr the position. The base salary was

$42,500. The offer made no mention of any bonus compensation. Bahr’s time at Outset, Inc.,

however, led her to believe that a commission or bonus plan was a standard part of compensation

for this type of sales position.

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        On Thursday, one day after receiving the offer, Bahr emailed the Regional Sales Manager

to seek additional information regarding her potential employment. Specifically, Bahr wanted

the “past/current territory sales targets” data and the details of any bonus or commission-based

“sales incentive plan.” (R. 45-5, Bahr-Fejedelem Emails, PageID # 1334). The District Sales

Manager, the following Wednesday, provided a “[r]ough example” of how the contemplated

bonus plan would potentially be set up. (Id. at 1337). He followed up by forwarding an email

from Senior Vice President of Sales Mike Masino that included the details of a plan that was

actually under consideration. The email stated in all capital letters that the plan had “NOT

BEEN OFFICIALLY APPROVED,” but Masino noted that he anticipated its approval by July.

(R. 45-6, Masino-Fejedelem Email, PageID # 1339). Bahr accepted the offer shortly thereafter.

These emails were the extent of Bahr’s pre-employment communications regarding any bonus

structure.


        B.     2011 Bonus Plan

        Bahr’s employment with TCP began on June 23, 2010. No bonus plan was approved in

2010.   Bahr’s expectation was that the plan was forthcoming.        She asked about the plan

described during the email exchange prior to her employment, but decided not to press the issue

as she was still new to the company.

        On July 1, 2011, C&I Director of Sales Ryan Miller announced the “C&I Sales Bonus

Plan” for the District Sales Managers. The plan’s terms and conditions stated:


        You can earn up to 200% of Base Salary if certain objectives are achieved. All
        payouts will be paid no later than 45 days following the bonus period end. Unless
        noted otherwise, all bonus plans are on an annualized basis and based on a
        calendar year. All computations and allocations will be established by the
        Company and be arbitrated solely by the Company.



                                               4
                                          No. 14-3356


(R. 45-10, 2011 Bonus Plan, PageID # 1146) (emphasis in original). The plan included a matrix

that detailed the possible payouts. Above this matrix was the following caption in bold: “The

payout schedule below details the percentage of base salary that will be paid for meeting

performance objectives.” (Id. at 1147) Pursuant to this plan, a District Sales Manager who

achieved 100% year-over-year sales growth and a 42% gross margin for their specific territory

would earn the highest payout, 200% of their base salary.

       The plan also included two provisions that could modify the payouts as stated in the

schedule. A section entitled “Plan Subject to Change” read:


       Management reserves the right to amend, change, or cancel the Bonus Plan at its
       discretion. It also reserves the right to reduce, modify or withhold awards based
       upon individual performance or management modification.


(Id.) The other provision addressed “Windfall and Shortfall Situations.” (Id.) It stated:


       Any windfall or shortfall situations that have a significant impact on sales or other
       measurement criteria will be dealt with on an individual basis by management.
       Adjustments to these measures can be made throughout the year at the discretion
       of the Company, and upon written communication to the participant. The
       discretion of management is final.


(Id.) These provisions were part of the form terms and conditions that were used in all TCP

bonus plans.

       In July 2011, when the plan was adopted, management was aware that Bahr’s sales

figures were tracking towards the maximum bonus payout. In September of that year, Miller

confirmed that TCP intended to pay out bonuses according to the schedule. Throughout the fall,

the Regional Sales Manager encouraged Bahr to hit her numbers so that she could max out her

potential bonus. However, September was the last time that Bahr specifically asked whether the

payout schedule, as presented on July 1, would be honored.

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                                            No. 14-3356


           C.     2011 Bonus Payout

           On December 21, 2011, CFO Valerie Campbell sent a letter to all TCP employees,

informing them that the “ability . . . to pay bonuses will not be determined until the books are

completely closed for the year which would be sometime in January.” (R. 45-11, Bonus Ltr.,

PageID # 1448.) The letter also stated that bonus-eligible employees would receive a holiday

bonus in the meantime. For employees like Bahr, on a “defined bonus plan,” “this [holiday]

bonus amount [would] be considered an advance on [their] official bonus.” (Id.)

           On January 15, 2012, Campbell informed Masino and Miller that she had reviewed the

C&I bonus numbers and discovered that TCP could not afford to pay them. She noted that these

were the last financials to be closed out and paying anything more than $285,000 would cause

TCP to default on its bank covenants, specifically the fixed charge coverage ratio. Campbell

acknowledged “that $285,000 is an amount considerably less than the original bonus estimate,”

but she believed that TCP could “still pay out good bonuses to everyone deserving of them and

give support as to why the amount is what it is.” (R. 41-1, Ex. E, PageID # 370). Campbell

specifically identified the District Sales Managers’ bonus plan as a significant problem. [Id.]

She informed Masino and Miller that the books would be closed the following day and it was

their job to figure out how to divvy up the $285,000. She concluded her letter by stating that

“C&I was a savior this year . . . but unfortunately the overall company performance just does not

allow for the payouts at the levels on the estimated file.” (Id. at 373). Notably, Campbell had

approved the bonus plan in question—the source of the estimated liability—only seven months

earlier.

           Bahr’s final sales results for 2011 were 113% year-over-year sales growth and 42% gross

margins, placing her in the highest category for bonus pay-outs based under the plan. She

finished first among all C&I District Sales Managers. Thus, she anticipated that her bonus
                                                  6
                                           No. 14-3356


would be $85,945, which represented 200% of her base salary—the percentage listed on the

matrix that corresponded with her sales numbers.

       On February 3, 2012, Bahr received an email from Miller stating that bonus payouts were

“constrained by overall company profitability” and that she would only be paid $34,229,

representing 80% of her base salary or $51,716 less than she anticipated receiving. Bahr sought

clarification regarding the discrepancy but was repeatedly told that the payout was due to

company performance and was not a reflection of her efforts.

       Management was aware that she was upset and approached Bahr on a few occasions to

discuss how she might find new opportunities and grow within the company. Bahr continued

working for TCP and received excellent reviews that spring despite her disappointment. In the

fall, she resigned from TCP after securing employment with another company. She noted her

disappointment with the 2011 bonus payout and a desire to work for a “more honest” company

as her reasons for leaving.     She also mentioned that the new position gave her a better

opportunity for career advancement and a higher salary.

       Bahr never received the additional compensation that she believed due and brought this

suit to recover under the alternative theories of breach of unilateral contract; breach of bilateral

contract; unjust enrichment; and promissory estoppel.


                                          DISCUSSION

I.     Unilateral Contract Claim
       To prove breach of a unilateral contract Bahr must first show that: 1) TCP made a

definite offer, which was communicated to her; 2) Bahr accepted that offer; and 3) there was

valid consideration. Pine River State Bank v. Mettille, 333 N.W.2d 622, 626 (Minn. 1983). The

district court determined that the Bonus Plan did not constitute a definite offer because TCP


                                                 7
                                          No. 14-3356


retained sole discretion over whether to award a bonus; or in the alternative, if it was an offer

TCP’s decision to award a reduced bonus was within its discretion reserved under the plan. See

Bahr v. Tech. Consumer Prods., No. 5:13CV1057, 2014 WL 1094426, *9–10 (N.D. Ohio March

17, 2014) (“Ultimately, Bahr cannot get past the discretionary nature of TCP’s bonus plan.”).

       We review de novo the disposition of a summary judgment motion. Combs v. Int’l Ins.

Co., 354 F.3d 568, 576 (6th Cir. 2004). Summary judgment shall be granted when there exists

no genuine dispute of material fact and, in light of the facts presented, the moving party is

entitled to judgment as a matter of law. Fed. R. Civ. P. 56. Bahr was entitled to summary

judgment on count two of her complaint because the Bonus Plan was an offer for a unilateral

contract, and TCP’s failure to exercise its discretion retained thereunder prior to Bahr’s full

performance meant that TCP was obligated to satisfy the terms of its offer or be in breach of the

fully formed contract.

       On appeal, TCP argues: 1) the promise was indefinite; 2) there was no consideration;

and 3) that even if there was a unilateral contract, the reduction of Bahr’s bonus was a valid

exercise of its reserved discretion. TCP also argues, in the alternative, that Bahr waived any

right to the balance of her claimed bonus by remaining employed with TCP for nine months after

it failed to pay her. We address each of these arguments in turn. Sitting in diversity, we apply

the law of the forum state. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496 (1941);

Hayes v. Equitable Energy Resources Co., 266 F.3d 560, 566 (6th Cir. 2001). Ohio looks to the

Restatement (Second) of Conflict of Laws to determine the choice of law where that decision has

not been agreed upon by contract. Tele-Save Merch. Co. v. Consumers Distrib. Co., 814 F.2d

1120, 1122 (6th Cir. 1987). We apply Minnesota law because the state has the “most significant




                                                8
                                            No. 14-3356


relationship to the transaction and the parties.” See Restatement (Second) of Conflict of Laws

§ 188.


         A.     The July 1 Bonus Plan Constitutes a Definite Offer

         A promise must be “sufficiently definite” to constitute an offer to enter a legally binding

contract. Hartung v. Billmeier, 66 N.W.2d 784, 787 (Minn. 1954). Whether a sufficiently

definite offer exists (as opposed to a mere proposal) is an objective consideration “determined by

the outward manifestations of the parties.” Pine River State Bank, 333 N.W.2d at 626. For

example, the Minnesota Supreme Court in Hartung held that the oral statement “[y]ou boys stick

with me for five years and I will give you a hundred dollars a year bonus” was sufficiently

definite to form a binding unilateral contract when an employee accepted the offer by working

for his employer for the next five years. 66 N.W.2d at 786, 789. Whether an offer is sufficiently

definite is a question of law to be answered by the courts. Chambers v. Travelers Cos., 764 F.

Supp. 2d 1071, 1078 (D. Minn. 2011).

         Employee handbooks with definite policies may constitute an offer for a unilateral

contract under Minnesota law. See, e.g., Pine River State Bank, 333 N.W.2d at 627; Feges v.

Perkins Restaurants, Inc., 483 N.W.2d 701, 707 (Minn. 1992); Chambers v. Metro. Prop. Cas.

Ins. Co., 351 F.3d 848, 853 (8th Cir. 2003). The offers made in an employee handbook must

satisfy the general principles of unilateral contract formation, but no more is required. Feges,

483 N.W.2d at 707. A bonus plan not contained within the employee handbook may likewise

form the basis of an enforceable contract.            See Bley v. Clickship Direct, Inc., No. 01-

661MJD/SRN, 2001 WL 1640093 (D. Minn. Dec. 12, 2001) (finding a definite offer because

there were “specific criteria to measure accomplishment of the goals”). However, the general

principles of contract formation are not satisfied and no offer has been made when compliance


                                                  9
                                           No. 14-3356


with a policy contained in the employee handbook or with the terms of a bonus plan is entirely

discretionary. Travelers Cos., 764 F.Supp.2d at 1087–88 (finding no definite offer because the

plan “clearly state[d] that the awarding of bonuses [was] within the discretion of [the

company]”); Grenier v. Air Express Int’l Corp., 132 F.Supp.2d 1198, 1199, 1201 (D. Minn.

2001) (finding no definite offer because the plan gave the company “complete discretion to

determine what business qualified for the incentive bonus”).

       TCP argues that its retention of absolute discretion to modify the Bonus Plan precludes it

from being a sufficiently definite offer. The cases on which TCP relies do not support its

position. In Chambers v. Travelers Cos., the court considered a benefits plan that stated,

“[bonuses] are discretionary awards used to reward superior performance,” and as such, they

“are given at the discretion of management, and no specific performance rating guarantees [a]

payout.” 764 F. Supp. 2d at 1080. The absolute discretion retained by the company in that case

pertained specifically to whether bonuses would ever be paid at all. As such, it was “not possible

for the Court to fix the legal liabilities of the parties,” making any promise contained in this plan

wholly illusory. Id. at 1087. The other case on which TCP relies, Grenier v. Air Express Int’l

Corp., addressed a bonus plan that purported to offer awards based on the development of new

business. That promise, however, was also illusory because the company reserved complete

discretion for itself to determine what constituted “new business.” 132 F.Supp.2d at 1201. In

both cases, it was the “reservation of discretion as found [under the given facts] [that]

preclude[d] the manifestation of a binding offer”; not merely that any discretion to affect the

terms of the offer was reserved by the companies. Id.

       As noted by the Minnesota Supreme Court, “[a]n offerer of a unilateral contract always

retains the power to modify or revoke the offer so long as the offeree has not begun performance,



                                                 10
                                              No. 14-3356


but retention of that power does not preclude the offer from” being sufficiently definite. Feges v.

Perkins Restaurants, Inc., 483 N.W.2d at 708 (holding that “a mere reservation of the right to

amend or modify [a] handbook” does not prevent its sufficiently definite provisions from

forming the basis of a legally enforceable contract). The facts of Bley v. Clickship Direct

illustrate how this principle is applied in the context of a non-illusory revocable bonus plan.

2001 WL 1640093.           The plan in Bley “provided for specific criteria to measure the

accomplishment of each employee toward . . . stated goals.” Id. at *1. However, the company’s

board retained discretion to modify or cancel the plan “based on factors which the Board

consider[ed] appropriate for the year.” Id. Thus, the discretion to modify or cancel the plan was

absolute. The court found that the plan contained a sufficiently definite offer to form a contract

despite the board’s absolute discretion because “the amount of bonus each employee [was]

entitled to . . . [could] be readily discerned.” Id. at *2.

        The C&I Bonus Plan, like the plan in Bley, contained a sufficiently definite offer: “The

payout schedule below details the percentage of base salary that will be paid for meeting

performance objectives.” (R. 45-10, 2011 Bonus Plan, PageID # 1147.) Analogous to the plan

in Bley, “specific criteria [were used] to measure the accomplishment of each employee.”

2001 WL 1640093, at *1. Thus, we are left with little doubt as to “the amount of bonus each

employee [was] entitled to” if the offer were accepted. Id. at *2. According to the C&I Bonus

Plan, Bahr’s accomplishment of increasing sales by 113% and maintaining a profit margin of

42% warrants a bonus award of 200% of her base salary.

        TCP’s objective manifestations also support the conclusion that the C&I Bonus Plan

constituted a sufficiently definite offer. The plan required the approval of TCP’s CFO, Valerie

Campbell; and in her own words, it was “a valid plan.” TCP’s intent to be bound was also



                                                   11
                                           No. 14-3356


manifest in the precision of the matrix itself—it clearly equated objectively measurable

achievements to specific dollar totals of bonus compensation. Like the offer in Hartung—“[y]ou

boys stick with me for five years and I will give you a hundred dollars a year bonus”—the

statement written above the Bonus Plan’s matrix, “[t]he payout schedule below details the

percentage of base salary that will be paid for meeting performance objectives,” is sufficiently

clear. (emphasis added). The form terms and conditions reserving discretion to TCP that were

attached to the C&I Bonus Plan do not diminish the definitive nature of this promise. These

clauses by their own language applied to limited circumstances.2 See Kvidera v. Rotation Eng’g

and Mfg. Co., 705 N.W.2d 416, 420 (Minn. Ct. App. 2005) (“The language found in a contract is

to be given its plain and ordinary meaning.”). Thus, the presence of these clauses does not

obfuscate the legal obligations of each party that would arise should the offer be accepted. See

id.

       The district court referred to a number of cases from other jurisdictions to support its

conclusion that the absolute reservation of discretion to revoke a plan makes an offer too

indefinite. These cases are easily distinguishable because the plans involved in each of these

cases included only ill-defined or wholly illusory promises.3 Moreover, the Minnesota Supreme



       2
          TCP reserved discretion to: 1) “amend, change, or cancel the Bonus Plan”; 2) “reduce,
modify or withhold awards based upon individual performance or management modification”;
or 3) address “windfall or shortfall situations,” in which case the participant would be notified in
writing. (R. 45-10, 2011 Bonus Plan, PageID # 1146). That this discretion could be exercised
prior to Bahr’s acceptance, as will be discussed below, does not sufficiently mitigate against the
clarity of the offer to prevent the formation of a contract under Minnesota law.
        3
          See, e.g., Jensen v. IBM Corp., 454 F.3d 382, 385 (4th Cir. 2006) (“Even though you
may be given progress reports regarding plan achievement during the year, no one becomes
entitled to any payment in advance of his or her receipt of the payment.”); Geras v. IBM Corp.,
638 F.3d 1311, 1314 (10th Cir. 2011) (“Any information regarding Plan achievement that may
be made available to employees during the year is provided for information purposes only, and
does not constitute a promise by IBM to make any specific distributions to any employee.”);


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                                          No. 14-3356


Court in Feges unequivocally held that the absolute reservation of discretion to revoke an

employment plan or policy does not in itself make the offers contained within indefinite. Feges

v. Perkins Restaurants, Inc., 483 N.W.2d at 708 (“We did not mean to imply . . . that a mere

reservation of the right to amend or modify the handbook precluded the handbook from being a

contract.”). The district court erred by granting summary judgment in favor of TCP on the basis

that the C&I Bonus Plan was too indefinite to be an offer.


       B.      Bahr’s Continued Employment and Efforts In Hitting Her Numbers
               Constitute Valid Consideration

       No offer will ripen into a contract without valuable consideration. Travelers Cos., 764 F.

Supp. 2d at 1087–88. TCP contends that Bahr was incapable of offering consideration because

“[she] was already tracking in line to earning a maximum bonus of 200 percent.” Appellee Br. at

24. We disagree. Consideration exists when the promisee performs “the designated act or

forbearance” stated by the offer. Hartung, 66 N.W.2d at 789. “However, for performance to

constitute an acceptance, it must differ from what the promisee is already contractually obligated

to do.” Peters v. Mut. Benefit Life Ins. Co., 420 N.W.2d 908, 913 (Minn. Ct. App. 1988). TCP’s

contention is meritless because Bahr was not contractually obligated to continue working in her

position for any specified duration of time. See Peters, 420 N.W.2d at 913 (“[C]onsideration

supporting a unilateral contract can be supplied when an at-will employee stays on the job

although free to leave.”); Hartung, 66 N.W.2d at 790 (“The fact that plaintiff made the offer of a

bonus after defendant had entered his employment does not indicate lack of consideration


Schwarzkopf v. IBM, Inc., No. C 08-2715JF(HRL), 2010 WL 1929625, *2 (N.D. Cal. May 12,
2010) (“IBM reserves the right to review and, in its sole discretion, adjust incentive payments
associated with transactions which (1) are disproportionate when compared with the territory
opportunity or quota size; or for which (2) the incentive payments are disproportionate when
compared with the individual’s performance contribution towards the transactions.”).


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                                           No. 14-3356


Since[sic] the defendant was not already legally bound to continue serving his employer for the

specified time.”). Therefore, TCP should not have been granted summary judgment as to count

two of Bahr’s complaint on this basis.


       C.      TCP Did Not Seasonably Exercise Its Discretion

       The district court held, in the alternative, that TCP properly exercised its discretion to

modify Bahr’s award, thus precluding her claim for breach of contract. We do not share this

judgment. The relevant clause read4:


       Management reserves the right to amend, change, or cancel the Bonus Plan at its
       discretion. It also reserves the right to reduce, modify or withhold awards based
       upon individual performance or management modification.


TCP failed to exercise any of these rights prior to Bahr’s acceptance.5 Acceptance of a unilateral

contract occurs upon complete performance. Hartung, 66 N.W.2d at 787. The C&I Bonus Plan

stated, “all bonus plans are on an annualized basis and based on a calendar year.” (R. 45-10,

2011 Bonus Plan, PageID # 1146). Thus, the consideration was given and the contract was

formed when Bahr ended the calendar year with 113% year-over-year sales growth and a

42% gross margin. From that point, no modifications could be made to affect her 2011 bonus

because it had already vested. See Hartung, 66 N.W.2d at 789 (“The moment [that the] offer

was thus converted into a contract, the bonus became due and payable.”); see also Kvidera, 705

N.W.2d at 423 (“[R]espondent’s right to the [bonus] vested . . . the day after the expiration of the

[applicable bonus period].”). In light of the clear offer to contract—“[t]he payout schedule

       4
        TCP concedes that it was not relying on the Windfall and Shortfall provision.
       5
         The record strongly indicates that the decision to unilaterally reduce C&I awards was
made on January 15, 2012. On that date, CFO Valerie Campbell sent the email that identified as
a problem the C&I bonus estimates and noted the need to adjust the award accordingly, to
“considerably less than the original bonus estimates.” (R. 41-1, Ex. E, PageID # 370.)


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                                           No. 14-3356


below details the percentage of base salary that will be paid for meeting performance

objectives”—we cannot tenably interpret the Bonus Plan to allow post-acceptance modification.

See 11 Williston on Contracts § 32:11 (4th ed. 2014) (“[A]n interpretation which renders a

contract lawful is preferred over one which renders it unlawful.”); 1 Williston on Contracts

§ 4:21 (4th ed. 2014) (“[A] reservation in either party of a future unbridled right to determine the

nature of performance . . . has often caused a provision to be too indefinite for enforcement.”).


               1.      Pre-Acceptance

       TCP suggests that Bahr was put on notice that her entitlement to any bonus was indefinite

when CFO Valerie Campbell sent a company-wide email on December 21, 2011, stating that the

“ability . . . to pay bonuses will not be determined until the books are completely closed for the

year which would be sometime in January.” (R. 45-11, Bonus Ltr., PageID # 1448). Contracts

may be revoked by words or conduct that is inconsistent with the intent to honor a promise.

Feges, 483 N.W.2d at 708. However, the intent to revoke must be clearly communicated to the

offeree;   the general dissemination of information that may or may not be perceived as

inconsistent with the offer is insufficient. See id. (finding that the offers made in an employee

handbook had not been revoked simply upon the issuance of a revised handbook that explicitly

disclaimed any intent to contract).

       Campbell’s December 12, 2011, company-wide email was not a clear revocation or

modification of the C&I Bonus Plan. Notably, the email distinguished employees on a “defined

bonus plan” from the general population of employees by noting that the holiday bonus would be

“considered an advance on [their] official bonus.” (R. 45-11, Bonus Ltr., PageID # 1448.)

Under these circumstances, Bahr reasonably surmised that the December 21 email did not impact

her rights under her “defined bonus plan.” Cf. Feges, 483 N.W.2d at 708 (distinguishing


                                                15
                                           No. 14-3356


between employees who received a handbook that was an offer to contract followed by one that

was not, and those employees who only received the latter). For this reason, the December 21

email was not sufficiently clear to revoke, amend, change, cancel, or modify, the C&I Bonus

Plan or Bahr’s individual award thereunder.


               2.      Post-Acceptance

       TCP contends that post-acceptance modification is supported by Bley v. Clickship,

discussed above, and by Brozo v. Oracle Corp., 324 F.3d 661 (8th Cir. 2003). Bley is inapposite

for such a proposition6 and the facts of Brozo are distinguishable. In Brozo, the court considered

a bonus and commissions plan that reserved a right for the company to make changes to

individual awards “at any time, during or after the close of the fiscal year.” 324 F.3d at 663

(emphasis added). The plan also noted that bonuses would “not vest until the Company ma[de]

any and all final changes.” Id. The Brozo court relied on this “unambiguous” language in

holding that the company was entitled to reduce a commission even after it had been fully

earned. Id. at 667.

       The C&I Bonus Plan contained no language suggesting that Bahr’s bonus could be

changed after the fiscal year closed or that it would not vest until the point at which she received

the payout. Moreover, the C&I Bonus Plan was distinct from Bahr’s employment contract. On

its own, the plan in Brozo was not a sufficiently definite offer to contract because its promises

were no more than a mirage in light of the company’s ability to retroactively affect what would


       6
           The plaintiffs in Bley were fired before any bonus was paid out. Bley, 2001 WL
1640093, at *2. Naturally, the bonus plan required that the employees still be with the company
at the close of the bonus period. Id. at *1. Thus, the appellate court remanded the case for the
trial court to determine whether the company fired its employees in good faith or as an attempt to
free itself of its bonus obligations which it would otherwise be contractually obligated to pay. Id.
at *2.


                                                16
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otherwise be vested rights. The dissent noted as much, but could not overcome the parties’

agreement that the bonus plan was simply part of a larger negotiated contract. Id. at 671 (J. Lay,

dissenting) (“[T]hat his employer may act within its sole discretion to do whatever it wants to do,

renders the contract illusory.”). Therefore, we find no support in Brozo’s holding that Minnesota

law allows for the post-acceptance modification of Bahr’s vested rights. Absent a valid defense

by TCP, Bahr was entitled to summary judgment on her breach of unilateral contract claim.


               3.     Bahr’s Continued Employment

       TCP strives to foreclose summary judgment in Bahr’s favor by positing that her retention

of the reduced sum in concert with her continued employment modified any contract rights she

once had.7 The unreported case on which TCP relies involved a modification that resulted from

a company’s repeated failure to pay an employee’s commissions due under an employment

contract and the employee’s implicit acquiescence to the repeated practice of nonpayment.

Friedenfeld v. Withrop Resources Corp., C5-0201606/C4-02-1659, 2003 WL 1908112, *5

(Minn. Ct. App. Apr. 22, 2003). Bahr’s bonus was derived from a distinct plan dealing only with

her performance in 2011 and not an ongoing employment contract. There was one bonus, which

she did not receive in full, and it vested prior to her resignation. See Kvidera, 705 N.W.2d at 423

(“[R]espondent’s right to the [bonus] vested . . . the day after the expiration of the [applicable

bonus period].”). Thus, she could not have acquiesced to a new arrangement where it was

generally understood that bonuses were a discretionary award.




       7
         TCP also asserts that Bahr’s continued employment effected an accord and satisfaction,
but has waived this defense as it was not raised below. Macurdy v. Sikov & Love, P.A., 894 F.2d
818, 824 (6th Cir. 1990).


                                                17
                                               No. 14-3356


        We recapitulate: the C&I Bonus Plan was a sufficiently definite offer; Bahr accepted the

offer by giving the valuable consideration of her continued employment; TCP did not timely

exercise its discretion to amend, change, cancel or modify the Bonus Plan (or Bahr’s award

thereunder); nor did Bahr’s acceptance of the inadequate sum modify her previously vested

rights. Thus, Bahr was entitled to an award equal to 200% of her base salary, and she is now due

at minimum the $51,716 unpaid balance of her bonus. That TCP overextended its finances is

irrelevant. A party may not forego one obligation merely because they believe the satisfaction of

another is more important. There is no language in the C&I Bonus Plan that makes the payouts

thereunder subordinate to TCP’s bank financing terms. TCP was aware when it offered the

Bonus Plan to induce Bahr’s retention and continued excellence that her bonus liability in

particular was tracking toward a substantial figure. TCP reserved many outs so that it would not

be bound to its offer on the basis of substantial performance. That the company failed to

exercise its reserved rights is the basis for its liability.


        We find it unnecessary to fully discuss Bahr’s breach of bilateral contract claim, but note

our agreement with the district court’s grant of summary judgment on that issue. The pre-

employment email exchange does not support Bahr’s contention that she joined TCP based on

the explicit promise that TCP would institute a specific bonus plan. Moreover, TCP instituted a

bonus plan that was more advantageous than what was previewed in the email exchange. Bahr’s

other theories of recovery are also fruitless, but need not be addressed. We do not pass judgment

on Bahr’s right to amend her complaint.




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                                             No. 14-3356


II.       The Minnesota Prompt Pay Statutes
          We now turn to the prompt pay statutes. Bahr claims entitlement to double damages,

relying on three distinct provisions of the Minnesota statutes: §§ 181.03, 181.13, and 181.14.8

These provisions do not create substantive rights; instead they offer a recovery mechanism for

past due wages and impose civil penalties on employers that fail to seasonably remit those

wages.9 Caldas v. Affordable Granite & Stone, Inc., 820 N.W.2d 826, 837. The applicability of

each provision will be addressed in turn.


          A.     Section 181.03

          Liability under this section attaches only if the employer acts with a fraudulent intent. §

181.03. Bahr contends that TCP executives were aware that the fixed charge coverage ratio

would be a problem prior to the end of the calendar year, yet continued encouraging Bahr to hit

her numbers so that she could earn the maximum bonus. This contention is not supported by the

record and is insufficient to plead fraud. See Fed. R. Civ. P. 9(b). TCP is entitled to summary

judgment with respect to this provision. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252

(1986).


          B.     Section 181.13

          Section 181.13 applies only where an employee has been discharged by the company.

Bahr claims that summary judgment was inappropriate because there is sufficient evidence in the

record to suggest that she was constructively discharged.             Though Bahr expressed her


          8
         Only §181.03 provides for double damages. An employer who is found liable under
any of these provisions shall also be made to pay for reasonable costs and attorney fees. §
181.171.
       9
         An earned bonus constitutes a wage under the statutes. See Kvidera, 705 N.W.2d at
423–24.


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                                           No. 14-3356


“disappointment” and desire to work for a “more honest” company upon her resignation, the

record indicates that she was offered other opportunities for advancement and continued to

receive top marks in her performance reviews after the dispute began. Construing the facts in the

light most favorable to Bahr, working conditions were not “so intolerable that [she was]

essentially forced to leave the employment.” Willis v. Henderson, 262 F.3d 801, 810 (8th Cir.

2001). TCP is therefore also entitled to summary judgment foreclosing any recovery under this

provision.


       C.      Section 181.14

       TCP does not dispute the applicability of § 181.14 other than contesting Bahr’s

entitlement to the bonus itself. Section 181.14 requires the full payment of any earned and

unremitted wages to be made at “the first regularly scheduled payday following the employee’s

final day of employment.” Bahr’s bonus was earned at the close of the 2011 calendar year and

was to be paid no later than 45 days later, pursuant to the C&I Bonus Plan. This payment was

outstanding when Bahr resigned on October 8, 2012. The next regularly scheduled payday was

October 15, 2012. Payment of Bahr’s “earned and unpaid” bonus was statutorily due on that

date. See Kvidera, 705 N.W.2d at 423–24 (holding that an “earned bonus constitute[s] a ‘wage’

for the purpose of Minn. Stat. § 181.13”).10

        When an employer fails to remit earned but unpaid wages the employee can demand

those wages in writing, at which point they must be paid within twenty-four hours. § 181.14(2).

The failure to make a timely payment results in a civil penalty “equal to the amount of the

employee’s average daily earnings at the employee’s regular rate of pay . . . not exceeding

       10
         Section 181.13 uses the same “wages or commissions” language as used in section
181.14. “These two statutory provisions must be read together.” Chatfield v. Henderson, 90
N.W.2d 227, 232 (Minn. 1958).


                                               20
                                              No. 14-3356


15 days in all.” § 181.14(2). The penalty is mandatory and there is no minimum dollar threshold

for its enforcement. Kilton v. Richard G. Nadler & Associates, 447 N.W.2d 468, 471 (Minn. Ct.

App. 1989). Thus, TCP is liable for civil penalties pursuant to § 181.14 of the Minnesota

Statutes.


                                        CONCLUSION

       We REVERSE and REMAND to the district court for entry of summary judgment in

favor of Bahr consistent with this opinion.




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