Legal Question in Employment Law in California

My Company Wants To Cut My Commissions On a Huge Deal
Last week, I made a huge $200,000 sale. I was called in to the office of the Director of Sales and told that the company wants to cut my commission on this contract, which is currently 10%, in half because the profit margins on this deal were very low. He told me this 3 days after the contract was signed and the entire $200,000. was paid by the customer. The Director of Sales, his boss, the VP of Sales, and the COO in the home office all approved this deal and no member of management mentioned cutting commissions until 3 days after the fact. This involved the sale of cemetary property for use in burying a person who had just died. Can the company legally cut my commissions in half 3 days after the signing of the contract and the full payment of the contract amount? Thanks for answering this question.

Asked on 5/05/02, 12:22 am

3 Answers from Attorneys

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Re: My Company Wants To Cut My Commissions On a Huge Deal

It depends on your contract. If the 10% commission is mandatory, as opposed to discretionary, then you can demand the 10%.

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Answered on 5/07/02, 6:09 pm

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Peter Lareau The Law Offices of Peter Lareau

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Re: My Company Wants To Cut My Commissions On a Huge Deal

Alex,

Sounds to me like you had a contract that entitled you to full commission on the deal. Your employer may or may not be able to cut your commissions going forward, but should not be able to cut them on a deal that has already been consumated. The practical question you will face is how do you prove that you had a contract for a 10% commission?

Answered on 5/07/02, 7:40 pm

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