Court Partially Denies Kraken Motion in Former Employee’s Bonus Dispute Case

News | April 9, 2024 By:

On Thursday, March 14, 2024, the US District Court for the Southern District of New York partially granted and denied a motion for summary judgment in a case involving disputed bonus compensation at a cryptocurrency trading company.

The case originated in 2017 when Robert Adler was hired by Payward, Inc., which does business as Kraken, to manage the company’s institutional cryptocurrency trading desk. Under the terms of Adler’s employment agreement, he was entitled to an annual base salary of $125,000. The one-page agreement also referenced prior discussions about Adler receiving a 3.5% bonus based on the profits of the trading desk. However, the agreement stated that additional terms regarding the bonus calculation would need to be agreed upon later.

In 2018, Payward terminated Adler’s employment without paying him any bonus. Adler subsequently filed a lawsuit alleging breach of contract, quantum meruit, and breach of the implied covenant of good faith and fair dealing. He claimed that based on the profits of the trading desk for 2017, he was owed a six-figure bonus. However, Payward disputed how trading desk profits should be calculated and asserted the bonus provisions were too vague to be enforced.

In its ruling, the District Court partially granted summary judgment for Payward on some issues but allowed the main claims to proceed. The court found factual disputes over how the trading desk profits should be calculated and whether industry custom or the parties’ course of dealing provided a method for determining the bonus amount. As a result, Adler’s breach of contract claim was permitted to go forward to a jury trial.

However, the court granted summary judgment for Payward on Adler’s claim for double damages under New York labor law, since Adler held a senior management position rather than being a commissioned salesperson. The implied covenant of good faith and fair dealing claim was also dismissed due to Adler’s at-will employment status. The court further ruled Adler’s alternative claim for quantum meruit could still be pursued given the contractual disputes.

Please contact BlockTribune for access to a copy of this filing.