Legal Question in Employment Law in California
Verbal agreement changed retroactively
I am a sales representive for a manufacturing company. My employer and I had a long standing verbal agreement (over 2 years,) on how my sales commissions would be paid. They have always been paid quarterly based on monthly sales. The commission money should be baid on March 30th 2005 for the products sold in the months of December 04, January 05 and February 05. On February 16, 2005, my boss came to me and said she was changing the commission plan and making it retroactive to January 1, 2005. The new plan eliminates almost all commission because it set the sales goals to an unreachable level. (She didn't even tell me what the new commission % would be if I met the new level, I think because she knows I can't possible reach it.) Is it legal for an employer to change a verbal agreement on a retroactive basis like this? They would owe me a little more that $3,000. If so, how do I proceed? Small claims court? Thank you,
2 Answers from Attorneys
Re: Verbal agreement changed retroactively
What you suggest could work. However, don't expect your job to last much longer. Then again, do you want to continue working there if you're not making commisions? The commissions already were earned, so you should be entitled to them. Good luck!
Re: Verbal agreement changed retroactively
Privileged Communication:
I am not sure you are properly valuing the amount at $3,000 -- that valuation depends on what you mean by "already earned." Is that "booked," "closed," "in the pipeline?" Your argument should be that you are entitled to the old commission structure on anything that closed or WILL CLOSE based on your efforts prior to the change in the commission structure. There is always (in these cases) a question of whether you are entitled to overtime pay (very complicated analysis that employers frequently get wrong. . . .)
As to the issue of what now? Sure, the employer can fire you if they don't like you. But if you are fired for complaining about not being properly paid, you have a claim for wrongful termination (in violation of public policy -- the public policy being that you put in your 8 hours based on a promise of certain pay, and that the employer, BECAUSE IT IS IN THE BEST INTERESTS OF THE HEALTH AND WELFARE OF ALL OF US LIVING IN THE STATE OF CALIFORNIA, better well damn honor its agreement. . .)
You should have an attorney sitting in the wings, guiding the play by play, if not, make sure to put your request in writing -- and if you don't get a good response from your immediate boss, send it up the food chain -- to HR, the VP, etc. (this all makes good legal sense later.) Good luck; feel free to email privately if you have further questions. . . (P.S. the retroactive change, if you haven't yet guessed, is illegal.)
P.P.S. Attorneys like us give tons of free advice and work primarily on a contingency structure -- BIG PHARMA is pushing a contingency fee cap of 20% for the November ballot. . . watch out for it -- and vote NO -- you never know when you'll need a lawyer and can't pay hourly fees. . .
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