Deferred Comp Forfeiture Not a "Rebate"

The Washington Court of Appeals ruled that plaintiff John Logan ‘s deferred compensation from Acordia N.W. Inc. was not a “rebate” within the meaning of the state’s “anti-kickback” statute, affirming a lower court, Washington, DC-based legal publisher BNA reported.

“The forfeiture here is not a ‘rebate’ because Logan did not receive the money and then return it. Instead, he directed Acordia in writing to withhold a certain portion of his salary. There was no ‘rebate,'” the court ruled.

Acordia had a stock purchased deferred compensation plan under which employees could defer their compensation in order to purchase company stock. The plan permitted employees to select their own date of vesting, according to the ruling.

While an employee of Acordia, Logan participated in the plan and selected January 1, 2000, as his vesting date.

However, Logan left the company one year before reaching the vesting date, according to the court. When Acordia forfeited Logan’s benefits under the plan because he had left his job before reaching the vesting date, Logan sued, alleging the company violated Washington’s anti-kickback statute.

A Washington state trial court ruled for Acordia and Logan appealed.

The case is Logan v. Acordia N.W. Inc., Wash. Ct.App., No. 49557-7-I, unpublished 9/23/02.