thank you ana robert mellon behalf of the plaintiff slash appellants also presidents angelenos sampson one of the players as well i'd like to reserve three minutes please write in reviewing the record the pleadings the briefing three factual issues kind of jumped out at me as being almost glossed over the first one is the significance of these bonuses mr sampson for example had she met the bonus expectation or had been paid we've been in touch entitled to almost one hundred percent of her salary and the reason i mention that is we're not dealing with minor you know gratuitous type  bonuses these are significant some of the upper level management folks could earn one hundred thousand dollars if they met the expectations contained within these memos the other issue that gets kind of glossed over is the reality that the plaintiffs perform and they performed one hundred percent of their expectation it was after they had performed in january of two thousand and nine when the employer decided that it was not going to pay the bonuses for two thousand and eight finally the other issue that gets glossed over for lack of a better term is that the case law that talks about bonuses in general focuses on the existence of the offer for the bonuses at the same time the employer reserves the right to not pay it and this isn't the case in the circumstance we have two different documents there contemporaneous roughly the employment agreement itself and the two thousand and six memorandum where they generate this new bonus structure but there's also in your view what was the offer in this case the offer is contained within the two thousand and six memorandum that says if you meet these metrics we're changing the system first of all we're going to do away with discretion we're going to do away with these promises that we've kind of dallied about before and we're going to give  you know good question whether it's an amendment or a modification or a subsequent agreement i don't know that it matters well it in here because it's never going to remit can and i mean it's i can't stand entirely by itself it doesn't define anything else it would be needed an employment contract expects only about bonus not about term what you're working on anything else but i think that's what's important in the circumstance is that that memorandum defines the bonus expectation for both the employer and the employment but my question is are you suggesting that it could be stand alone contract by itself and understand that if that were all of existed if there is no employment contract the bonus wouldn't have much of a foundation to stand on because bonuses all the talks about the employees got more than a bonus well and i think the bonus memorandum can stand in independent of the employment agreement itself it's a separate contract perhaps it modifies the other the other agreement the two thousand the employment agreement or the policy that's two thousand and fourteen but the reality is that the clients of the pla perform so to the extent there's other expectations that are contained outside of that agreement i don't know that they're germane to the to the payment of the bonus itself didn't didn't the employees perform under their original employment contract well they're certainly performing under the terms of that contract as well i would agree with him i hear you say and i can understand that the case that they've done what they were supposed to do but i don't know that the two thousand and six memo changes that they did what they were supposed to do before the problem they have is that the employment contract before appears to give the board ultimate discretion even if it turns out to be after the work is performed because a bonus is set up that way and so now i try to figure out well is the two thousand and six agreement something separate is that an amendment that removes the board's discretion me what is and i have trouble understanding is something separate because i really don't see how it can stand by itself it only talks about the bonus system in it it doesn't purport to be an independent employment agreement or a innovation or a complete replacement of the original employment agreement so for me the issue is what what effect does it have on the original employment agreement i don't know that it modifies the terms of the original employment agreement any well it doesn't with regard to the board's discretion isn't that a problem for your argument no because i believe if you read that two thousand and six memo closely it's very particular you will be entitled to a bonus if these metrics are met but also says with few exceptions and that modifies the amount of the bonus that qualifies the amount of the bonus if you read that memo as a whole and that are consistent with story for example we're talking about the policy at the university of washington the agreement to the extent it's read as a whole that with certain limited exceptions language modifies the amount of the bonus it doesn't there is the fifth pick incorporation of exceptions without those exceptions being defined i don't know that those exceptions are either identified or defined the exception relates to the amount of the bonus to the extent they meet profit profitability metrics per plant so again there's a difference between the the but what are the exceptions i don't know the problem happened is that how can you have a contract if the terms aren't certain if the if this is with few exceptions and the exceptions are not cabined in any way defined in any way or described in any way how can that be a contract well i would ask how can that be a legitimate exception to the promise that is in that memo that says you will be paid a bonus in the event you meet these met all of the terms in a contract have to be certain indeed and if you're looking at that phrase independent of the entire memorandum you're not getting the entire contract you're getting only a portion of it and in my opinion it's a whole in a manner consistent with the dissent in story who talks about the policy at needs to be read as a whole you can't independently pick and choose bits and phrases from the from the contract and generate  reserved discretion discretionary boys that you're relying on that language is only modifying the amount of bonus that you think the employees were going to be entitled to with certainty i think that does circle back to clifton's first question and an ar maybe our pals questions which is are are you are you treating the two thousand and six agreement as a standalone agreement or as a modification of the employment contracts hard for me to imagine that's not a modification because i don't see all the terms that would need to be in there otherwise so so just so you know where i'm going forgive me for interrupting but i don't know how you divorce yourself from equivocal language in the employment contract if this is a modification well whether you do it as a modification or amendment or a standalone contract the reality is that it contains sufficient detail to identify what the bonuses may be independent of the employment agreement look at the employment agreement and how broad it is it covers a number of here here's the deal if the two thousand and six agreement is a memo is is is an amendment you can't look at it separately from the employment it's all one bowl of soup i disagree with that and in my opinion because this two thousand and six memorandum is exclusively addressed to the concept of bonus payment structure we have an independent agreement relating to bonuses that may be in addition to the terms and conditions that are contained in the employment agreement but we have a separate document that identifies the circumstance in which these employees are going to be paid you think you that that's your position that allows you to read out language that makes very clear on the employment agreement i think you'd agree it's very clear that the board has discretion indeed and i would also go so far as to say that to the extent the employees perform in a manner consistent with that with the two thousand and six memorandum we no longer have a conversation about what the offer is what what consideration is we're beyond that now because the employees of performing american over the course of an entire year just so i understand your argument if we disagree with you regarding whether or not the memo two thousand and six memo is a modification of the employment agreement if in our view it because we haven't discussed this case but assume that we see this as all one agreement including the employment agreement with this provision of discretion for the employer do you lose if you read that phrase with certain limited exceptions to apply the now if we read the employment agreement with its provision that the employer retains discretion as to whether or not to give bonuses together with  the two thousand and six memo we read those all as one contract do you lose i don't believe so because the plaintiffs the pilots performed performance takes us completely you have is it your argument that performance takes away the discretion it doesn't take the discretion if we're looking at the policy that is the employer reserves discretion to not pay bonuses the no but we're not looking at a policy that says that we're looking at an agreement the two thousand and six memorandum that sort of cigs the question because we're trying to figure out if that part of the original contract survived and you really haven't given me an explanation as to why it changed me there's nothing in the in the two thousand and six memo that says that's one of the changes were making the list lots of changes more money to salary instead of bonus and so forth they don't talk anything at all about companies giving up its discretion so to tell me that the employees already performed i'm not sure i understand how that's an explanation for why the company's given up the discretion they were performing before they say the bonus program work we want to make some refinements they never talk about giving up discretion the refinement so why should we infer that's what the plan did again let's let's focus our attention on stuart that's the case that says substantial performance partial and substantial performance relieves the consideration it gets the employee where they need to be in terms of earning their bonus he telling us that the employees wouldn't have worked as hard but for this two thousand and six plan i can't say that i mean i don't know that any because they were good employees before in the good employees after that's sort of the problem it's not like they've made a trade for something it's not like the company's given up discretion and exchange for harder working employees so i'm still adrift as to how it is we should infer the company's given up the discretion that the original agreement explicitly gave it i think because of the terms of the memo are very explicit and extremely unequivocal you will be entitled to a bonus you will earn a bonus if it's very very specific and unequivocal i'll reserve the balance of what i think  in a modification to the employment agreement was that a stand alone agreement how do you characterize it well your honor it's we don't take the position that it's a standalone agreement and we have trouble seeing how it can modify the original employment contracts because it does have a loser elements to it including the language that you identified earlier that calls out exceptions well of her what is it if it's not a standalone and not a modification what is it it's it's a set of guidelines much like many other guidelines that companies issue that have you know parameters for managers to review and to follow and to consider in making decisions and pretty definitive language you will receive a bonus that's pretty definitive i understand that your hon and i think that the what i will say is that you know what the district court determined is that this two thousand and six memo was actually a modification to the employment agreements and counsel in opening brief which you don't agree with that well i i i don't think that it has the elements to modify the two thousand as two thousand and six employment agreements but whether it does or doesn't it still doesn't change the discretionary nature even if it modifies the employment agreement because the employment agreement on all four corners plainly states that the board retains discretion to determine whether authored it will authorize employment i'm sorry authorised bonuses and that memo comes into play if at all after the board's already determined whether it will issue jelled when had all of its managers sign employment agreements so these employment agreements were issued to all of the managers at that point time and at the same time the two thousand and six memo was also issued and so i agree that there is that that the the t wo thousand and six memo and the employment agreements were contemporaneously reviewed and considered by the plaintiffs and so i think that that further goes to support the position of jelled one which is that the employment agreements which are plainly state that the board retains discretion to authorize bonuses in the first place that the two thousand and six memo then helps to define and provide parameters and understanding for folks about how individual plan profitability may impact those bonuses if they're authorized because that's something that's words like may and if they're authorized don't appear in the two thousand and six memo do they you're right your honor the two thousand and six memo does not refer back to the employment agreements and it doesn't express lee state that it  discretion that set forth in the employment agreement that the when you're facing here is that the workers did the work and there's been no suggestion that their failure to work cause the companies distress at a time when the housing industry in particular is being turned upside down so no fair or not there is some sense of gee here's what you're going to get the two thousand and six memo speaks in pretty firm terms feels like a bait and switch work hard we're going to pay these bonuses unless we're not but it doesn't say unless we're not so so why aren't the workers supposed to say well heck i'm going to get out there and work really hard because look at these great bonuses that are coming my direction well two points to that your honor i think that that that gel when you know had every hope that it that there wouldn't be a global recession and had every intention on you know treating employees well and helping to support them financially and all of the rest of that but it also at the same time when these ago when this agreement and these two thousand and six memo were issued at the same time retain the discretion to decide whether to people in this is in the first place as it's well received and that then that gets to be our question i mean there's no question that if the two thousand and six memo repeated the language that was contained in the employment contract we probably wouldn't be here inversely if the two if the regional employment contract didn't have bad language we probably wouldn't be here because the could cut salaries so our problem now is trying to figure out if the language that gave the board discretion that was contained in the original deployment contract survived into the two thousand and six agreement amendment however we characterize it and why should we say that it did well your honor when the employees signed the two thousand and i'm sorry when the employees sign the employment agreements they read on the very first page this paragraph that plainly retains the discretionary nature of the bonus states that various different factors will be considered on determining how bonuses will be paid if any and some of those factors are identified are the individual plant performance as well as the company's overall financial performance and so when they're looking as well at the two thousand and six memo which doesn't have the end dish of contract which doesn't have them signing or authorizing or any of the sort of traditional elements of a contract it they can't they can't be pulled apart and then  the harmonious reading that the district court resolved and which we asked the ninth circuit here to to to affirm is that the two thousand and six memo i'm sorry that the employment agreements retained the ultimate the board to authorize the bonus program but then at that point in time the two thousand and six memo provides the structure and how will be distributed because of course this is a company with thousands of employees and it will be distributed if it's going to be district if it's going to be distributed correct and so a company with thousands of thousands of employees must necessarily have guidelines and structures and standards for how they would distribute discretionary bonuses if authorized by the board i think you did good point you could read it that way but it doesn't interpretation is certainly possible but it's it's not without there's certainly a lot of wiggle room there and your honor i would i would offer that if this memo the two thousand and six memo was issued you know two years down the road that wasn't contemporaneous with the employment agreements this would be a different case this would be a harder case i think for jelled when to be able to argue and prevail on because because they're not you they're not linked at that point in time and i think it would be more difficult to to to  stand here before the court but certainly if they are the most is is is a useful fact for your purposes but it's not a brand new bonus program indeed the the bonus program apparently existed for a long time and the two thousand and six memo explain some changes in it now those changes don't say anything about removing the board's discretion but they do place greater emphasis on the performance of an individual plant and it could be inferred from that and less significance on the performance of the company as a whole so why can't somebody read this and say well the deal here is we're looking small we're looking local if your plant succeeds you're going to get a bonus if your plant doesn't do very well the fact the rest of the company does great that may be too bad for you that focus moves away from the board's discretion with regard to the overall financial condition of the company and more toward let's see how this plant performed why shouldn't this be taken by the employees as an agreement to focus on what happens within the four corners of my factory well i think the bonus program does place more emphasis on what happens between the four corners of my factory or my plant but the employment agreement plainly states that the company's overall profitability is a consideration as it should be in a discretionary bonus plan because in in the company of jelled when there are many different plants small plants large plants across the country and of course the overall company performance would be a primary driver is to determine whether a discretionary bonus would be issued or not this is providing a framework for how to distribute bonuses if they're authorized in a way in a manner that recognizes individual plant performance your honor your honors i i also wanted to just address the issue of that that plaintiff has raised that somehow this is a standalone contract and i'm not sure that this is an issue that we need to spend much time on but pallant opening brief plainly states that the position in their argument is that the two thousand and six memo was a modification of the employment agreement so it takes us by surprise that they're taking the position that it's a standalone agreement briefing as is that being a point where you agreed but it sounds like actually you're saying they're not so sure there was a modification well i certainly agree that the blue brief left me  impression that was not a contest point i think that the the two thousand and six memo and the employment agreements because there are so contemporaneous can be viewed together in the question is what does the two thousand and six memo do to modify if at all the employment agreement  the modification you really left me wondering now what is your position on that please well your honor we're asking the court to from the lower court's decision and so you know to the extent that the court thinks that this is a modification we don't dispute that because the importance from our perspective is that it doesn't modify the discretionary nature of the bonus program to begin with and again party argument think you've answered my question ok thank you your honor are there any any other questions from the paper when you take whatever route leads to the right result well counsel my question is how out of the plant do i can't speak to the specifics but i am confident that the plants both in question earned a bonus they had a profit profitability metric that entitled or that that qualify them for a bonus i don't know the exact number to follow up points that i just really want to focus the court's attention on is again whether we identify this two thousand and six memorandum as a modification or an independent contractor i don't know that that's terribly germane to the kill take either route to victory as well did i will but the reality is that the claim to appellants the plaintiffs performed and imagine yourself in the circumstance where a two thousand and six bonus memorandum comes around that fundamentally changes the way you're paid you perform in a manner consistent with the memorandum in two thousand and six and in two thousand and seven you perform in a manner consistent with the memorandum in two thousand and seven and get paid in two thousand and eight now i i really you share your concern but the reality is that at that time a lot of people performed and performed well and lost their jobs because their companies failed and the housing industry in particular was hard hit well if they had contracts that carried them guaranteed payment for a given period of time the contracts should and presumably would be honored but you still have to turn to what the agreement between the parties was then and  i hear you and i believe the workers work hard but we're still left with the question of whether the term in the original employment agreement survived or was it excised by the two thousand  memo and the fact that they worked and performed i'm not sure i really don't understand how that answers that question well it answers the question you can't amend it after the fact but that presumes the answer to begin with which is that there is no longer discretion why is why do we say there's no longer discretion because of the very unequivocal language of the two thousand and six is a contingent upon the performance of the plants i don't believe well that the amount of the bonuses is certainly contingent upon the performance of plant to the extent they don't generate a profit they're not entitled to a boat well if the plant oh not a title to anyone else it depends on the profitability level of or not that's my that's my question counsel do you think that in the ability of these your clients to debate that point that is your argument depends upon that correct so to bring all of this full circle if you look at these two documents that are contemporaneous indeed the two thousand and six in the employment agreements are signed of at the same time job and have the capacity as indicated by the very explicit reservation of discretion in the employment agreement they had the capacity to make this two thousand and six memo subject to that agreement they had the ability they they knew that memo didn't change that you know i would expect that to be a little bit more explicit in the two thousand and six memorandum it is their document so we construe it against the draft or indeed and that tag and on page three that says with certain limited exceptions cannot be reasonably read to essentially disqualify all the specific promises that are contained in the balance of the thank you counsel thank you to both counsel the case just argued is submitted for decision by the co