Staff suing AIB's US arm claim they were told bonuses would be repaid

THE HEAD of AIB Capital Markets in North America told his staff last February they would be repaid their 2008 bonuses "soon" …

THE HEAD of AIB Capital Markets in North America told his staff last February they would be repaid their 2008 bonuses "soon" after they were clawed back just days after being paid, according to a legal complaint.

The claim was made in a legal action taken by two employees in the bank's New York office, Ronald Rapp and Douglas Marron. They are suing AIB seeking their respective 2008 bonuses of $315,000 (€213,000) and $185,000 (€125,000). They are also seeking damages for breach of contract and US labour law.

A spokesman for the bank said it was unable to comment as the matter was before the courts.

Paul Carey, managing director of the bank's North America capital markets division, told staff at a February 3rd meeting that they would be repaid their bonuses after the bank had clawed back the payments to staff, according to the legal complaint.

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The executives claim Mr Carey told Mr Rapp that AIB was "contractually bound" to pay the bonuses. Mr Rapp claims he was told on January 28th that the 2008 bonuses had been set and that they would be paid the following week.

After paying the bonuses over the following weekend, AIB then clawed them back from employees over subsequent days.

Mr Rapp claims that the bank tried to recover the bonus from his account, but because he had transferred it to another account on February 2nd, "AIB's attempt to retrieve the money failed".

After being directed to do so, Mr Rapp repaid the bonus around February 20th "in reliance on AIB's repeated assurances that AIB was contractually bound to repay the money". The complaint states that "members of AIB senior management have admitted that AIB is contractually bound to pay bonuses and will pay".

They claim "each assurance has been followed by various excuses as to why the clawed-back bonuses had not yet been repaid".

Mr Rapp and Mr Marron have claimed that AIB has not yet "committed to any date on which payment will be made".