Gill Industries Backed Out of Incentive Payments Promised in Employee Retention Deal, Lawsuit Alleges

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An apparent retention agreement between Gill Industries, Inc. and the employees who decided to continue on at its Richmond, Kentucky facility while the company explored a sale is the subject of a proposed unpaid-wage class action recently removed to the state’s Eastern District Court. 

The nine-page breach-of-contract lawsuit alleges Gill Industries, a global supplier for welding and assembly, negligently misrepresented and fraudulently induced employees into signing a retention agreement that stipulated they’d continue working for Gill in Richmond in exchange for incentive payments while the defendant sought to sell the facility. 

The lawsuit alleges Gill Industries has not made the three retention payments, which were supposed to come in two 15-percent installments of a “retention bonus” followed by a payment of the remaining retention bonus plus unused paid time off (PTO) owed after the expiration of a waiver period, that were promised to come through in 2020. 

In order to effectuate the sale of its Richmond, Kentucky facility, Gill Industries needed proposed class members to remain employed and provide labor, the lawsuit begins. To that end, the case claims, Gill provided workers with a retention agreement and “induced” the individuals to continue working in exchange for bonus payments and payment for unused PTO. 

The plaintiff alleges that when the time came last year to pay workers, Gill did not uphold its end of the bargain. From the lawsuit: 

“When the first retention payment became due, on May 31, 2020, Defendant Gill Industries, Inc., did not pay the amount due in the Retention Agreement executed by the Proposed Class Plaintiffs and Gill Industries, Inc.

When the second retention payment became due, on August 31, 2020, Defendant Gill Industries, Inc., did not pay the amount due in the Retention Agreement executed by the Proposed Class Plaintiffs and Gill Industries, Inc. 

The remainder of the ‘Retention Bonus’ plus unused PTO owed after the expiration of waiver period of the Waiver and Release Agreement was never paid after it became due.” 

The complaint alleges the defendant’s retention agreement, which was purportedly meant to “encourage the recipient to remain employed with the Company, and to address and [sic] concerns about job security,” contained material representations Gill Industries knew to be false or made recklessly. 

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