Federal judge in Arizona says forfeiture of commissions is unconscionable
It isn’t uncommon for commission-based employees to have contracts stating that they must be employed on the commission payout date to receive payment. Such provisions can result in an employee not receiving commissions for work they performed before separating from the company. A new decision from the U.S. District Court for the District of Arizona should cause employers to take a hard look at those provisions.
Contract required active employment to receive payment
Laura Hanson worked as a mortgage loan originator for Arizona Financial Credit Union (AFCU) for several years. In three successive years, she signed a standardized agreement outlining the terms on which she would receive commissions. Relevant terms included the following:
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