Commission Payment Disputes Before and After Termination: Payability, Calculation and Timing

Sales commissions are not regular and predictable sources of income. Those who work on commission see their liquidity ebb and flow. Therefore, when a commission goes unpaid, a dispute is sure to follow. Sometimes these disputes concern whether a commission is payable at all; other times the dispute involves the amount to be paid.

The starting point for legal analysis of a commission dispute is the agreement. If it is written, what does it mean for the circumstance of the commission at issue? If it is not written, does it rise to the level of enforceable promise, and, if not, can it be enforced through alternate theories, such as quantum meruit?

Disputes can arise after employment is terminated. Employees will at times look back and determine that they were not paid enough. More frequently, a business will contend that the employee's departure cuts off any future payments, even though the commission event has already happened. The stakes in these disputes have increased as various states have enacted laws with damage multipliers and fee awards for certain failures to pay.

Listen as our experienced panel delivers knowledge and advice that will enable counsel to minimize the existence of these disputes and to prevail if such disputes occur.

1. Sources of commission obligation
   1. Contract
   2. Non-contract
2. Calculation of commission
3. Post departure commission

The panel will review these key concepts:

• Important commission agreement clauses
• Liability outside of contract liability
• Calculation of commission
• Post-departure commission