Legal Question in Employment Law in New York
Worked on draw against commissions (1099 basis) beginning in year 2 of employment with commercial real estate company. A generally clear contract (that identified any shortfall as debt) was executed except it did not address the need for a regular reconciliation of draw vs. commission to be provided to me (as I understand current NY law may require). During year 2, I did receive regular statements with pay reconciling draw vs. commission and balance due. Company stopped draw in month 12 of year 2 which caused me to resign. During last 12 months of employment total draw was two times the commission earned. Current economic conditions resulted in inability to close deals. 8 weeks after leaving Company I received a letter requesting repayment of shortfall with reconciliation attached noting that if payment is not received on a timely basis a 1.5% monthly interest would be assessed as per contract. Do I have to pay shortfall or does omission of "frequency of reconciliation" clause in contract provide an out? If an out, how should communication with company be handled? If not, do I have any other recourse? I have essentially no savings or assets and am now working for another company in the same industry with a similar draw against commission compensation agreement.
1 Answer from Attorneys
No, there is no escape clause based on your explaination of your circumstances. Its seems that there was contract based on the course and conduct of the parties; meaning, you both acted as if a contract exisited. Therefore, a court is likely to enforce a remedy in your employer's favor. Perhaps you can explain your sistuation to your employer and make monthly reconciliation payments over en extended period of time.
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