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Patrick, Esq.
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I worked isurance company. In the commission policy it

Customer Question

I worked for an isurance company. In the commission policy it stated that once I hit certain premium amount I would receive a bonus. They paid me a pro-rated bonus and stated in the policy that it's not considered earned until the following March. The bonus was based on my production. They paid me a pro-rated portion on my work. I left the company prior to March and they are sending me a bill for the pro-rated amount. If I stayed until March I would of got the rest of the bonus. I live in TX. Are they allowed to go after the pro-rated amount. Again, it was based off of my production
Submitted: 2 months ago.
Category: Employment Law
Expert:  Patrick, Esq. replied 2 months ago.

Good evening and thank you for entrusting me to assist you. My name is ***** ***** I will do everything I can to answer your question.

Commission agreements are creatures, of contract, which means that whatever your commission agreement imposes as a term or condition to earning the commission will typically be enforceable. There is nothing unlawful about a commission policy providing that a commission is not earned until a later date. So, provided you were given notice of this policy in advance of receiving the commission, it would generally be enforceable. This means that your employer could theoretically sue you to recover the commissions that were not technically "earned."

The good news is that employers in these circumstances are generally willing to negotiate because they recognize that litigation would cost them time and money. So, perhaps you can negotiate a partial repayment, or some sort of installment plan without interest. That would typically be the best approach under the circumstances you describe.

I hope that you find this information helpful. Please do not hesitate to let me know if you have any questions or concerns regarding the above and I will be more than happy to assist you further.

If you do not require any further assistance, please be so kind as to provide a positive rating of my service so that I may receive credit for assisting you. Very best wishes moving forward.

* Disclaimer *

Just Answer is a venue for informational and educational purposes only. No attorney-client relationship is formed by these communications.

Customer: replied 2 months ago.
Several other states do not allow this type of behavior. The commission was earned when I submitted the case. They paid several other bonuses and not going after those. All considered bonuses. They pick and choose which ones to go after. This was a new plan they put Inforce to hold us hostage so EE's wouldn't leave. It was in the 2015 comp plan for th first time and taken out in the 2016 comp plan. They are going after 5 EE's and the other 4 got attorneys and they all say do not pay. They made us sign the repayment plan or they would not pay us any compensation at all. Th comp plan was vague and never defined which bonuses need to be paid back.
Expert:  Patrick, Esq. replied 2 months ago.

Thank you.

If the commission was already earned at the time they first implemented this provision about needing to stay on until March, that would be illegal. I think my initial understanding was that this was always their policy, in which case there would be nothing illegal about enforcing it. The fact they pick and choose when to enforce it would not prohibit them from enforcing it. By that logic if a company doesn't always enforce every violation of a contract it loses the right to ever enforce the contract. There are strategic and practical reasons why an employer doesn't always decide to enforce contracts. It is unfortunate when an employee is targeted and singled out, but it is not inherently illegal.

My other thought is that if they required you to sign this agreement as a condition to receiving your earned wages, which you seem to be saying they did ("they made us sign the repayment plan or they would not pay us any compensation at all") that would likely render the entire contract unenforceable as it was signed under duress and without adequate consideration.

Please let me know if there is anything more I can do for you...

Expert:  Patrick, Esq. replied 2 months ago.

Were you able to view my response?

Customer: replied 2 months ago.
There strategy was implemented in 2015 and then takin out in 2016. I left on 8/24/15. They use to pay these bonuses the following year. Since they cut the comp play and reduced comp they said we will pay you pro rats on the earned bonuses to keep us here. They made us sign a form or no payment at all. In our business we sell business for mostly 1/1 effective dates. So the business was sold in 2014 for a 1/1/15 effective date. On 12/22/2014 they said these are the changes in an email. The business was sold and not effective. They changed the comp numbers and reduced our comp by about 20%. In effort to keep people they paid us this e bonuses early to offset the lost income. In March of 2015 they sent out a formal complaint plan retro to 1/1/15 which they usually do. However, this pro Tara bonus was never done. In June 2015 they said if we didn't sign the agreement no money at all. The comp plan says all bonuses will be pro rated. However, in there comp plan they didn't spell out which plans would be owed back. I received a $150k bonus on the same bonus wording and they are not going after that bonus. So they are picking and choosing which ones to go after. The result of the pro rats bonus made them change the 2016 comp plan to remove this bonus. Should I pay his back or not. I have a copy of the combo plan if you want me to send it to you.
Expert:  Patrick, Esq. replied 2 months ago.

Thank you for your reply.

Unfortunately, I am prohibited from telling what you should do, as this is simply a form for general legal information. If you have any specific followup questions I am more than happy to address those for you, though. Please let me know.

Customer: replied 2 months ago.
Does it sound legal to enforce certain bonuses and not others. Please read the last email to clarify what they did.
Expert:  Patrick, Esq. replied 2 months ago.

Yes, that's legal. No law requires an employer to force everything or nothing. They can selectively choose which bonuses to enforce. They may have strategic, practical or personal reasons for doing so (I would be completely speculating as to what those reasons could be).

I hope this helps.

Customer: replied 2 months ago.
One last question. You said legal. But what if they pick and choose which person to go after. Is that discrimination.
Expert:  Patrick, Esq. replied 2 months ago.

Discrimination simply describes any unequal treatment that occurs for an arbitrary reason. However, discrimination is not illegal unless it is motivated by a legally protected trait, such as race, religion or disability. So, if you could prove that your employer was only enforcing your bonuses because you are Jewish, for example, that would be illegal discrimination. But it's the motive that matters. You would need to prove that your employer's motive was a legally protected trait.

I hope this helps. Again, please feel free to let me know if you have any further concerns. If I have answered your questions, I would be very grateful for a positive rating of my service so that I may receive credit for assisting you.

Very best wishes.

Expert:  Patrick, Esq. replied 2 months ago.

Was there anything else?

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