Am I owed this profit-sharing benefit after quitting?
Yes. The CFO's alleged "interpretation" is wrong on several levels (as is usual when an employer is asked to interpret clauses when these would benefit the employee).
Schachter v. Citigroup, Inc., 47 Cal.4th 610, 618 (2009) explicitly recognizes profit-sharing plans as wages encompassed by the California Labor Code in Section 200 et seq:
A wage is defined as "all amounts for labor performed by employees of
every description, whether the amount is fixed or ascertained by the
standard of time, task, piece, commission basis, or other method of
calculation." (§ 200, subd. (a).) We construe the term "wages" broadly
to "include not only the periodic monetary earnings of the employee
but also the other benefits to which he is entitled as a part of his
compensation." (Wise v. Southern Pac. Co. (1970) 1 Cal.3d 600, 607 [83
Cal.Rptr. 202, 463 P.2d 426].) "Courts have recognized that `wages'
also include those benefits to which an employee is entitled as a part
of his or her compensation, including money, room, board, clothing,
vacation pay, and sick pay. (E.g., Suastez v. Plastic Dress-Up Co.
(1982) 31 Cal.3d 774, 780 [183 Cal.Rptr. 846, 647 P.2d 122];
Department of Industrial Relations v. UI Video Stores, Inc. (1997) 55
Cal.App.4th 1084, 1091 [64 Cal.Rptr.2d 457].)" (Murphy v. Kenneth Cole
Productions, Inc. (2007) 40 Cal.4th 1094, 1103 [56 Cal.Rptr.3d 880,
155 P.3d 284].) Incentive compensation, such as bonuses and
profit-sharing plans, also constitutes wages. (See Neisendorf,
supra, 143 Cal.App.4th at p. 522; Lucian v. All States Trucking Co.
(1981) 116 Cal.App.3d 972, 974 [171 Cal.Rptr. 262]; Ware v. Merrill
Lynch, Pierce, Fenner & Smith, Inc. (1972) 24 Cal.App.3d 35, 44 [100
The clause on retirement benefits nowhere purports the 3%-15% contribution to be contingent on the employee "hav[ing] worked on the last day of the plan year". The clause is only in terms of the "time worked during the fiscal year". The CFO's mention of "plan year" is only an attempt to confuse you. The clause speaks only in terms of fiscal year.
Absent an indication to the contrary elsewhere in your contract, employee manual, or the company's 401(k) plan, the CFO appears to be wrong also by purporting that the employer's contribution is "discretionary". The criteria outlined in the "Retirement Benefits" clause for determination of contribution are:
- one year of continuous service;
- management's review of the financial performance of the company; and
- [employee's] time worked during the fiscal year.
Contrary to what the CFO now alleges, none of these criteria is of discretionary nature.
It is also unclear from where the CFO is bringing up the threshold of 1,000 hours. This might be stated elsewhere in the employee manual or your contract. Regardless, assuming arguendo that the threshold is specified somewhere else, that is not a discretionary criterion either.
Furthermore, the clause nowhere indicates that the rate of contribution is to be determined on a case-by-case basis. Instead, the rate of its contribution depends on management's review of the financial performance of the company, that is, as a whole. This means that the company ought to determine one single rate that will apply to all eligible employees. In turn, that common rate is to be pro-rated according to the eligible time [that each eligible individual] worked during the fiscal year.
The issue of whether or not an employee manual is binding depends on the general understanding that can be adduced from the manual and/or your contract. That general understanding might indicate whether or not the document at issue is to be construed as a contract.
In your manual, contract, agreements, etc., you will need to search for language in the sense that the employee manual "is not, and shall not be construed to create [any contract], express or implied". See the [nonprecedential] decision Bergiadis v. Fred Loya Ins. Agency, Inc., No.B249276 (CA Court of Appeals, Oct. 29, 2014), at section "The Agreement is an agreement to arbitrate".
Even if your contract or manual directly or indirectly (by calling itself "non-binding") excludes profit-sharing plans from the definition of wages, that language might fall on its face as per (1) Sections 201 & 202 of the Labor Code and, (2) the explicit remark in Schachter about profit-sharing plans.
As an example where general understanding from an employee manual is binding, see Richey v. Autonation, Inc., 60 Cal.4th 909, 915 (2015):
The arbitrator found that although the employee manual was "poorly
written," "*there was a general understanding** at Power Toyota that
The point to make about Richey is the Supreme Court of California's endorsement of a decision that was premised on the employee manual (as opposed to the necessity of being a contract).