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Delta-Lawyer, Lawyer
Category: Employment Law
Satisfied Customers: 3546
Experience:  In-House Counsel & Litigator
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I am employed as a VP Sales company that sells data and

Customer Question

I am employed as a VP Sales for a company that sells data and information services. I have both a salary and a commission payment arrangement. I have been employed by this company for seventeen years, ten of which with the current owner. My commission has been set at 20% since I joined the company. There's never been an issue until two years ago, when my employer decided not to pay me the full commission on a sale that I made.
Most of our sales are made on an annual basis. In this case, however, my client elected to take a advantage of a three year offer, that included an up front payment for the entire amount. This client had the option of buying a one-year data supply at a price of $125,000, or purchasing a three year supply, at a cost of $300,000, with the total fee paid up front. The elected to go with the three year arrangement, which was done with the full knowledge of my employer. The sale was made and the three year contract was signed.
There had been no questions or discussions about paying the full 20%, or $60,000, commission. But, when the commission payment was due, my employer told me that they were only going to pay $20,000, or 20% of one year of the agreement. I argued the point vehemently, but was told that they simply would not pay me the full amount.
I believe I have a strong legal position and I would very much like to talk to a representative to see how I might follow through legally, on this matter.
Submitted: 2 years ago.
Category: Employment Law
Expert:  Delta-Lawyer replied 2 years ago.
I hope this message finds you well, present circumstances excluded. I am a licensed attorney with over a decade of employment law experience. It is a pleasure to assist you today.
I too believe that you have a strong case against the employer under the premise or cause of action of breach of contract and bad faith business dealings.
The only legal leg that they have to stand on - and it would be weak at that - is that they may spread out the commission in three parts over three years to better mimic the typical payout. Even that argument or defense is weak because they have the money in hand right now.
The fact that you have voiced your opinion on the matter is good because it has placed them on notice of your position. I suggest that you email the owner one last time (for legal notice purposes) and tell them that you wish to be paid the amount you are owed in full as soon as reasonably possible. Tell them that you feel this is bad faith and that it breaches your commission agreement (both historically and as agreed to) and that you were never given any notice (written or otherwise) of any change in terms of your commission relative to signing a three year deal. Tell them that you would like an answer within 5 business days as to their decision in writing.
If they do not respond affirmatively, then your only option left is to sue them for the money.
Understand that they can terminate you for suing them for the money owed. When you beat them in court, you will likely also be awarded damages for the termination, but that award may not come for years.
This is the double edged sword of this type of litigation.
Best case scenario is that you find other employment as soon as reasonably possible and then bring the suit against the employer for what they owe you. Then, the termination issue is immaterial and you can simply litigate for what is legally yours.
Let me know if you have any other questions or comments.
Please rate my answer positively as well.
Best wishes going forward!
Expert:  Delta-Lawyer replied 2 years ago.
Did you have any other questions or comments? I want you to be as comfortable as possible as you move forward with this issue. Thanks