BOISE — A class-action suit against Micron Technology claiming unpaid bonuses and fraud related to the company’s employee rating system will move forward.
On Monday, Idaho 4th District Court Judge Melissa Moody turned down Micron’s request to dismiss the suit, which alleges the company underpaid bonuses to a large group of employees to the tune of $20 million in 2018. Micron employees Chris Manning, Dennis Piatt, Enrique Quilantan, and Lisa Lopez filed the suit earlier this year alleging a bell curve rating system deprived them of bonuses they were due and pushed other employees to take severance packages based on incomplete information about their performance ratings.
Micron spokeswoman Erica Pompen said in an email earlier this summer that the company does not comment or speculate on pending litigation.
During the hearing, Micron’s attorney, Rick Bergstrom, argued that the suit could not go forward because of a six months statute of limitations on lost wages under the Idaho Wage Claim Act. He also argued the bonuses the plaintiffs were saying were underpaid were not part of a contract, so Micron had discretion to “modify, amend, rescind, interpret, suspend or terminate any portion of it.”
Bergstrom also argued the suit should be dismissed because none of the defendants took severance packages based on “fraudulent” information, and instead elected to complete performance improvement plans and stay on at the company.
Moody ultimately decided to let the suit move forward. More hearings will happen later this year, and Moody will decide if the suit qualifies as class action, which would mean other affected employees or former employees not named in the suit could also receive restitution if the plaintiffs prevail.
According to court documents filed in Idaho 4th District Court, Micron employees each year are given a score of 1 to 5, and the score determines their annual bonus. Manning said for years the company told managers to assign ratings solely based on performance and were not supposed to adhere to any quotas.
The suit alleges this changed in 2018 when Micron instituted a bell curve rating system, mandating in every department employees had to be rated across the entire spectrum. This meant no matter how well everyone on a team was performing, someone would be rated a 5 and someone would be rated a 1 or a 2. The suit alleges because many employees were rated lower than their actual performance, it caused thousands of employees to lose out on bonuses.
Manning, in the suit, said he was required by his superiors to rate his employees on the bell curve, or higher level management would “do it for (him).” Even though he could give employees positive comments on their evaluation and give them high marks in the subcategories, the overall rating assigned had to meet the quota. He was told 10% of those under his purview would have to receive a rating of 2.
“Leadership ‘will not accept anything less than 10 percent,’” read an excerpt from an email quoted in the court documents.
Manning said in the documents he was able to see the rating given to him by his supervisor, which initially was a 4 but then dropped to a 3. He said downgrading his rating due to the required quotas made him lose out on roughly $18,000 in bonuses.
Because employees who scored lower than a 2 and decided to take a severance package instead of continuing with the company were required to sign nondisclosure agreements, none of the plaintiffs meet this description and the section of the suit discussing this practice apply to them directly. Bergstrom argued because of this, a part of the suit focused on employees who scored 2s was unable to move forward, but Moody ruled an in-depth discovery phase, when attorneys can gather evidence, can continue.
Bergstrom also argued that the class of impacted employees is impossible to define, because the definition of whose rating was changed later is subjective.
“What does it mean they have been modified?” Bergstrom said. “Are we talking about, ‘I write on a piece of paper a 4, erase it and change it to a 3?’”
Bergstrom suggested a “pragmatic” solution of limiting the scope of discovery because of this, but plaintiffs’ attorney, Eric Rossman, said the only way to understand the full truth was to gather as much evidence as possible.
“Lord knows I’d love to limit discovery as much as possible,” Rossman said, “...but I’m just not sure how we would do that.”