Marathon Petroleum Did Not Pay Full Bonuses After Merger Class Action

This class action concerns the merger of Marathon Petroleum Company, LP with Andeavor, LLC. The complaint alleges that Marathon promised certain bonuses to Andeavor employees who were terminated without cause after the merger, but the complaint claims that Marathon has not paid the bonuses.

The class for this action is all eligible Marathon employees who were terminated without cause prior to December 31, 2018 and did not receive their full 2018 non-prorated ICP bonuses.

The defendants in this case are Marathon, Andeavor, and a third company, Mahi, LLC, which appears to have been formed to take Andeavor’s place after the merger.

Andeavor had an Incentive Compensation Program (ICP) that paid performance-related bonuses to certain employees. Before Marathon acquired Andeavor, the complaint says, it promised these employees that even if they were terminated after the deal, they would be paid their full non-prorated 2018 ICP bonuses. This was “memorialized in the Employee Severance & Benefit Treatment Guide and the S-4 Registration Statement that Marathon filed with the Securities Exchange Commission (SEC).

The bonuses are based on three components: company-wide results, business unit results, and individual performance. The figures for these three components are then plugged into a formula to calculate the bonuses. ICP plan states that employees who leave the company but meet certain requirements are still eligible for the bonuses, but that their earnings figures used in the formula will end with their last paycheck. It also states that exceptions can be made to this rule as long as they are approved.

The merger had to be approved by shareholders. The companies feared that they might not get approval because of “job apprehension amongst Andeavor’s employees.” The complaint says, “Therefore, to ensure that Andeavor employees would be fully incentivized to work tirelessly through the merger’s closing toward the combined company’s long-term goals, Andeavor and Marathon promised all eligible employees … that they would not prorate their 2018 ICP bonuses.”

This promise was made to employees, the complaint says, under the letterhead of both companies.

The plaintiffs in this case, Michael J. Morrison and Dana Harvey, were eligible for 2018 ICP bonuses. Both received ICP statements from Marathon, saying that they would receive their full bonuses. The complaint also sets forth other instances in which it claims the agreement to pay the non-prorated bonuses was confirmed.

The merger took place on October 3, 2018. Morrison was terminated on that date, and Harvey on October 12.

On March 5, 2019, Marathon paid the 2018 ICP bonuses. The bonuses they were paid were not for the full year, but were prorated to the last day of their employment. Although the employees have asked Marathon to pay the full bonuses as promised, the company has not done so. The complaint alleges breach of contract.

Article Type: Lawsuit
Topic: Employment

Most Recent Case Event

Marathon Petroleum Did Not Pay Full Bonuses After Merger Complaint

April 17, 2020

This class action concerns the merger of Marathon Petroleum Company, LP with Andeavor, LLC. The complaint alleges that Marathon promised certain bonuses to Andeavor employees who were terminated without cause after the merger, but the complaint claims that Marathon has not paid the bonuses.

Marathon Petroleum Did Not Pay Full Bonuses After Merger Complaint

Case Event History

Marathon Petroleum Did Not Pay Full Bonuses After Merger Complaint

April 17, 2020

This class action concerns the merger of Marathon Petroleum Company, LP with Andeavor, LLC. The complaint alleges that Marathon promised certain bonuses to Andeavor employees who were terminated without cause after the merger, but the complaint claims that Marathon has not paid the bonuses.

Marathon Petroleum Did Not Pay Full Bonuses After Merger Complaint
Tags: Failure to Honor Terms of Agreement, Merger-Related, Mergers or Acquisitions