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John
John, Employment Lawyer
Category: Employment Law
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Experience:  Exclusively practice labor and employment law.
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My husband resigned s position effective 9/4. s commissions

Customer Question

My husband resigned his position effective 9/4. His commissions are generally paid the second check of the following month, so his commission for August would have been due this Friday 9/18. Washington state law states something about commissions being due unless there is an agreement between the employee and employer that states otherwise. The "Global Compensation Rules for 2013" that my husband originally signed when he started with the company is 2013 states "Any Team Member that resigned, will forfeit any bonus or commission payments that were not scheduled to be paid before the Team Member's last day with the Company (unless required by local law). So it is a bit confusing, local law says unless there is a signed agreement, their policy says unless its required by law. The other question I have is that each year the company issues a bonus and compensation plan that references the "Global Compensation Rules for XXXX year". My husband signed the original 2013 and 2014, but his boss never had him sign the 2015. So technically he never agreed to the rules, is that a catch?
Submitted: 1 year ago.
Category: Employment Law
Expert:  John replied 1 year ago.

Hi, thanks for submitting your question today.My name is John. I have over 13 years of legal and consulting experience in this area. I’m happy to assist you with your question today.

Washington law in regard to commission agreements, which is essentially the same as the majority of states, is that unless the employer has a written policy of cutting off commissions upon termination, then the employer continues to owe commissions for which the person was the procuring cause of the sale, even when commissions are due well after termination. Here, under the terms of the commission agreement, he would not be entitled to commissions after his date of termination at all.

The second part of your question is more in the air. He signed the first two years' agreements, but not the last, and the question is whether it can be binding on him despite his non-signature. This really would depend on whether the trier of fact (a judge or jury) would see this as an implied contract moving on (i.e., the parties course of performance over the years shows they intended to carry out the same in 2015), or whether the entire agreement just stopped after 2015. I tend to see it as an implied contract, because he kept earning commissions and the parties acted like they were still under contract. If more things about the relationship changed in 2015, I might be swayed more that the past years' terms aren't now binding, but that doesn't seem to be the case. In any event, it would be up to a judge or jury to decide that factually...and it would be difficult for either side I think to say with certainty that they'd win such a lawsuit...that may be your opening to negotiate some amount of it as payable to him -i.e., threaten to sue because the 2015 agreement was never signed, cost of potential litigation may convince them to negotiate some amount.

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