Legal Question in Business Law in California

holding back commissions earned

At our company we just received a new compensation plan. In there it says that if we are not employed at the time they pay commissions, we will not receive any. Whether we quit or get fired.

So our company pays commissions for all deals we closed, a month later. For December deals we close, we get paid on those the last working day of January.

So essentially if we ever resign, we will not get paid on for the previous months comissions that we earned. Or we could close a large deal and if the decide they do not want to pay me, they can fire me.

Is this legal???


Asked on 1/26/04, 5:24 pm

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: holding back commissions earned

I can't quote the exact section of the Labor Code, but I don't think it's legal.

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Answered on 1/26/04, 6:11 pm
Robert Miller Robert L. Miller & Associates, A Law Corporation

Re: holding back commissions earned

Thank you for your posting.

A firing based upon a company not wanting to pay a commission would be a pretext firing, and not illegal. More importantly, it would certainly be breach of contract, and unjust enrichment, as you've benefitted the company, and they've chosen to breach a contract by firing you in bad faith, based upon an economic interest.

I don't think you'd have any problem finding an attorney willing to take on a case if this in fact happened in the future.

I hope that this information helps, but if you want more information, have further questions, or feel that you need legal representation, please feel free to email me directly at [email protected]. It's my pleasure to assist you in any way that I can.

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Answered on 1/26/04, 7:44 pm


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