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socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 33883
Experience:  Retired (mostly)
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Myself and our entire outside sales staff were off from

Resolved Question:

Myself and our entire outside sales staff were laid off from a Houston based company (main office in Rotterdam) in mid August. I was a salary plus commission employee for 22.5 years with this company. the company was awarded a major project that I had found and worked for over a year but was laid off two weeks before the company being awarded the project and they do not feel they owe me my commission. please advise your opinion
Submitted: 9 months ago.
Category: California Employment Law
Expert:  socrateaser replied 9 months ago.
Hello,

Did you have a written contract re commissions?

If yes, then what exactly does the contract say?

If no, then what was customarily required of you in order to earn a commission in previous projects?

Thanks in advance.
Customer: replied 9 months ago.

to clarify I am a resident of Louisiana and the company is based in Houston, Texas, not California.


 


Yes I had a written contract with the company signed by the sales manager and the general manager. The terms are base salary plus two percent commission one on booked sales based on a annual target of 2.1million paid at the end of each month. I have a copy in hand.

Expert:  socrateaser replied 9 months ago.
The term, "booked" suggests that the sale is confirmed by purchase order or contractual signature, etc.

Your claim would be that the employer breached the implied covenant of good faith, and that it knew that the sale was pending, and that terminating your employment was an opportunity to avoid paying a commission that it would otherwise have had to have paid. The act of "prevention" should give you damages for the breach.

The employer will defend that the sale wasn't booked at the time of your termination, and that the covenant of good faith should not be used to provide you with a benefit not expressly provided by the contract terms. Moreover, the employer is entitled to terminate employees, "at will:" at any time, for any reason, or for no reason at all.

Your reply would be that commissions are earned when the salesperson procures a ready, willing and able buyer ("procuring cause doctrine"), and if the buyer finally buys, then the sale is "booked," and that you are entitled to your commission, even though your employment is terminated at the time of the booking -- because the contract does not state that you must be employed at the time of sale, in order to earn the commission.

If there are other employees who are also entitled to the commission, then you could pool your resources and sue. Paying for a lawyer on your own, could make this a poor economic outcome, dependent upon the amount of commissions to which you're entitled. If the employer decides to fight, you could spend $25,000 litigating this sort of thing. But, you may be able to get a quick settlement for some portion of the commission by hiring a lawyer and threatening legal action.

I think it's worth a shot.

If you need a link to a lawyer referral service, please let me know and I will be happy to provide. And, thanks for using justanswer.com!
Customer: replied 9 months ago.

Thanks for the reply and advice. Could I use excerpts from you answer above to send a letter myself before getting a lawyer involved, to see if that works and if doesn't work I can seek a lawyer?

Expert:  socrateaser replied 9 months ago.
Sorry for the delay. I was in a meeting most of the day.

If you provide a positive rating for my answer, then you are free to use whatever I've written at your discretion.

Hope this helps.
socrateaser, Lawyer
Satisfied Customers: 33883
Experience: Retired (mostly)
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