Legal Question in Employment Law in California
Benefits Cut, Commissions Cut, Required Signature
I work for a very large National corporation. I receive a salary plus commission plus mileage. This morning (Friday) I was notified that effective immediately, the company will no longer pay vacation or holiday benefits. You will receive any vacation time accrued up until last Monday. In addition, my sales commissions have been cut in half effective last Monday. This means that large deals I have been working on for months which were not submited until later in the week are only worth half of what they were worth last week. Shouldn't I have received prior notice? Also, the company is requiring that you sign agreement to these changes or be terminated. One of the items in the agreement is that if anything happens to the account and you are no longer employed there, the company can come after you for the commission already paid to you by garnishing your wages, etc. at your new job.
Does any of this sound right? When I was hired a year and a half ago, I was promised a new compensation package shortly which was in the works and would be much more lucrative. I have this in writing via e-mails. When I would ask about it, the answer was always to just wait.
Do I have any recourse? Do I have to sign the agreement?
1 Answer from Attorneys
Re: Benefits Cut, Commissions Cut, Required Signature
Unless your original contract states that the agreement is good for a fixed period of time, the company is free to change the terms and conditions of its compensation package at any time, upon notice to you. It is not necessary for you to sign an agreement to the new terms...notice is all that is required. Your signature probably is for the purpose of acknowledgment of receipt of the notice.
A change of terms cannot be retroactive. If you have already earned commissions for sales you have made, they cannot cut the commissions in half. If work remains to be done to earn those commissions, they probably can change the terms but it would require a close examintaion of your prior contract, what the industry standard is, and other factors before a definitive answer can be given.
If you believe you are being cheated out of earned commissions, you should meet with a labor law attorney in your area for a review and opinion.
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