Question
I am employed by a small company in Israel. The law mandates that all employees must have a pension plan and that the premiums must be paid each month by the employer. The premiums are funded partly by the employer and partly by a deduction from the employee's salary. My employer deducted from my salary but never deposited any money into a pension plan. After two years the employees found out that he did not open a pension plan on their behalf and some employees threatened our employer that they will sue him in court. Our employer then proceeded to take out a pension plan on each employee's behalf and deposited the amount that would have been in their pension fund had he paid on time, including the principal that would have been paid from the worker and from the employer and the profits that were actually made by the fund in those years. The reason he paid this amount is because he feared being sued in court where he could have been fined and made to pay this amount anyway. The employer and I are religious and I would not have gone to court. But several employees are not religious and would have sued in secular court. Can I keep the money that is above the principal since he didn't really want to give it to me but was essentially forced to give it by the threat of secular court action? Also, perhaps what he gave me is interest because he paid me more than the principal?
Answer
The basis for your first question is a ruling of the Gemara (BB 40B) and SA (CM 205, 2) that if someone forces a person to give him a present the recipient may not keep the present because the one who gave the present did not really want to give it and an essential component in any valid transaction is the desire of both parties to transact.
However, there are two issues that require investigation. One issue is whether, from the standpoint of Torah law, a threat is called coercion. The second is whether he gave you a present or paid you what you deserved. With regard to the second issue, besides being a law that your employer is required to fund a pension plan on your behalf as he did in the end, it is also a contractual obligation of your employer and, therefore, it may not be a present at all.
The reason the first issue requires scrutiny is that in the classical case of coercion that we find in the Gemara, the method of coercion is physical force. For example, the Gemara (BB 48A) discusses the validity of a korban that was given as a result of coercion and there the coercion that was employed was physical coercion. Therefore, we have to first consider whether the threat of a suit in court is considered coercion to invalidate a present.
A case that is discussed by the Gemara (BB 40B) concerns a lender who was given his borrower's field to use for three years in order to pay back the borrower's debt. After three years the lender blackmailed his borrower, saying that if he doesn't formally sell him the field, he will claim (falsely) that the field belongs to him. Since he was living in the field for three years and the borrower has no proof that the field was given to him for temporary use as payment for his debt, he will win and keep the field without paying for it. The Gemara rules that since it was known that the lender's agreement to sell was only made under threat, the sale is invalid.
Rav Hai Gaon (Sefer Hamekach chapter 31), basing himself on this ruling of the Gemara, rules that if a buyer blackmails a seller with a threat that he is capable of carrying out, the sale is invalid. This is also the conclusion of Rabbenu Chananeil (Commentary to BB 40B) and many other Rishonim (e.g., R. Yona, Rashbo, Ran).
Even though many Rishonim follow the approach of Rav Hai and Rabbenu Chananeil, the Maharik (res 185) cites a Gemara (Shevuos 46A) that rules that if a person threatens someone that he will chop down his tree and later we see that the tree was chopped down we cannot assume that the one who threatened was the one who actually chopped it down because many people threaten things but don't carry out their threats. The Maharik addresses the Gemara's ruling in the case of the lender which was the source for Rav Hai's ruling and cites the interpretation of the Ra'avyo to deflect the proof of R. Hai and Rabbenu Chanaeil.
The explanation of the Ra'avyo is that in the case of the Gemara the lender acted as an owner and had already acted by hiding the evidence that the field did not belong to him. Therefore, his threat to never return the field was a real threat. However, we do not see that a threat to take action constitutes coercion to void a present. Therefore, the Maharik rules that if the one who gave the present did not state that he acted only out of duress we do not consider the present to be a forced present.
While the Mechabeir (205, 7) rules like Rav Hai, the Ramo cites the position of the Maharik. The Nesivos (205, 12) cites the Maharchash who rules that even according to Rav Hai the threat to sue in secular court does not constitute coercion since it is not a forgone conclusion that the one who sues will win. This is certainly true in Israel today where judges can and do apply the law in almost any manner that they see fit.
Thus, we have determined that in your case, even if we assume that the amount that your employer deposited in your pension fund that was for lost profit is a present, your first concern, i.e., that you may not keep the money because it was given under duress, is not a problem since according to all opinions your employer's action is not legally considered an action based on coercion.
Thus, we have determined that legally the money was not given under duress. We will now examine the second point, whether the additional money that was given to you constitutes a present or that you were entitled even to the money that was deposited in your fund to reflect the profits that you would have earned had your employer deposited into your fund each month as he was obligated. Whereas for your first concern this point is no longer critical, it is critical in order to resolve your second concern, i.e., whether the additional amount constitutes ribbis.
The case that is discussed in the Ramo (CM 292, 7) that is similar to your situation is a person who deposited funds in a bank and later requested the return of his funds to invest in a profitable venture. The Ramo, based on the Mordechai (BK 123), rules that if the banker failed to return the funds, the banker must surrender his earnings to the depositor. The Shach (292, 15) cites the Maharshal who disagrees with this ruling because he argues that these are only causative damages and further cites the Nimukei Yosef who writes that the Yerushalmi also maintains that the banker is not liable.
Many later poskim (e.g., Chasam Sofer (res. CM 178), Chavos Da'as (169, 14)) however, agree with the Ramo and deflect the Maharshal's objection by differentiating between one who merely causes damage and one who benefits at the expense of his victim's loss. In your case your employer presumably benefited from the funds that he withheld from his employees.
Practically, many Poskim (e.g., Beis Ephraim (CM 26), Avnei Nezer (YD 103)) maintain that one could not force the banker to pay since he could say kim li like the Maharshal, since it is a credible position. However, the Chasam Sofer rules against the Maharshal and the Chazon Ish (BK 22, 3) also maintains that one cannot say kim li like the Maharshal.
In your situation, since you were already paid you would certainly be able to keep the money if the above applies to your situation. However, the reason why it may not apply is because the money that was withheld from you was not money that you deposited with your employer but wages that were owed to you. Thus, the issue is whether being reimbursed for lost potential income is considered interest since your employer owed you the money and he now paid you more money than the principal that he owed you.
In order to determine whether there is a problem of ribbis we must investigate two issues. The first issue is whether, if the money had been given as a loan to your employer, then paying you for lost income does constitute ribbis. The second issue is whether owed wages are the same as a loan.
For a loan the Rashbo (res. 3, 227) writes that a borrower may not reimburse his lender for lost potential income because that constitutes payment of interest to the lender. While it seems that this issue is a dispute with the Sema (81, 65) permitting and the Shach (81, 81) prohibiting, the Shevus Yacov (1, 64) writes that it is prohibited because it constitutes interest and the Chasam Sofer (res. CM 178) likewise rules that it constitutes interest.
However, in your case the money that was owed to you was not a loan but wages. Perhaps, one may pay for lost potential income from withheld wages. In fact, this issue is the subject of a dispute among the Rishonim. The Ohr Zorua (BM 181) whose reponsum is cited by the Teshuvas Maimodies (Mishpotim 15) records that the Ra'avyo ruled that for wages the worker is entitled to be reimbursed for potential income that he lost due to the tardiness of his employer. You have a stronger position because in the case of the Ohr Zorua the employer never obligated himself to pay for lost potential income whereas in your case he did obligate himself. The Ohr Zorua records that other Rishonim disagreed with the Ra'avyo and maintained that it is forbidden to pay for lost potential income because of ribbis.
The Beis Yosef (YD 160 par. Hame'akev) and the Shach (176, 8) rule against the Ra'avyo. But the Bach (YD 161, par. Avak Ribbis) rules that if the worker already received the lost profits, he may keep the money since one can still rely on the Ra'avyo. Furthermore, the Chavos Da'as (169, 14) and the Chassam Sofer (Likkutim 26) rule like the Ra'avyo. Finally, in a ruling that pertains to your case, the Maharshdam (YD 222) rules that if the employer already gave his employee the lost income, he may keep it.
There is a further very strong reason to be lenient in your situation, namely that it is not certain that a pension fund's investments will be profitable. Therefore, one may not view the money that is greater than the principle as compensation for late payment because it was not certain that there would be profits.
In conclusion: Your two concerns were well taken, but you may keep all the money that your employer deposited into your pension plan.