Discretionary Bonus Clause
(Collective Bargaining Agreement)

Summary

This Discretionary Bonus Clause (Collective Bargaining Agreement) provides for employer discretion in awarding bonuses to employees in a collective bargaining unit. It is intended for inclusion in a collective bargaining agreement between an employer and the union representing its employees. It contains practical guidance, drafting notes, and alternate and optional clauses. This clause is intended for private employers. It is based on federal law and does not address all potential state law distinctions; thus, you should check any relevant state and local laws. For information generally on the collective bargaining process, see Good Faith Bargaining when Negotiating CBAs and Mandatory, Permissive, and Illegal Bargaining Subjects: Key Considerations. For other clauses that can be included in a collective bargaining agreement, see Notices Clause (Collective Bargaining Agreement), Seniority Clause (Collective Bargaining Agreement), Sick Leave Clause (Collective Bargaining Agreement), Military Duty Leave of Absence Clause (Collective Bargaining Agreement), Prepaid Legal Service Clause (Collective Bargaining Agreement), and Shift Transfer Clause (Collective Bargaining Agreement). For more information on bonus agreements, see Emp. Cont. & Agreements: A Guide for Corp. Counsel §§ 3.01–3.10. For sample bonus clauses, see Dunlap-Hanna Pennsylvania Forms P 46.01.