Court gives green light to tech sales employee's unpaid commission claims

The 4th Circuit (whose rulings apply to all North Carolina, South Carolina, and West Virginia employers) recently revived an employee's lawsuit alleging his employer capped his commissions for three large deals despite representing to him in various communications that the payments were uncapped. The case is a good reminder for employers to be consistent in communications to employees about their eligibility to earn and be paid commissions. Even a commission plan with all the bells and whistles may not be enough to defeat a claim for unpaid commissions if the employer has otherwise disseminated information contrary to the written plan.

IBM's commission structure

Justin Fessler joined IBM in October 2008 and started working as the company's inside sales information specialist for the U.S. federal government in 2009. His compensation consisted of a base salary plus commissions. He operated under one IBM commission plan that was in effect from January 1, 2016, through June 30, 2016; a second plan from January 1, 2017, through June 30, 2017; and a third from July 1, 2017, through December 21, 2017.

Fessler wasn't paid his expected commissions on three separate occasions: