Legal Question in Business Law in Maryland

Unpaid Commissions after Termination

I was an outside salesman working in VA for a MD firm. They closed our VA office and I was laid off. As an employee, I was paid a base salary and commissions based on box sales and installation projects. I was also eligible for spiffs which were paid directly to the salesman from the manufacturer for sales of specific products. Upon termination, I was provided a sev. package that included one month's salary and one month's commission based on the previous year's average. They also will pay me a reduced commission on a large project that was booked several months ago and will be complete within the next 3 to 4 months. In their system, once an installation order is booked, the responsiblilty for the order goes to the installation department and the salesman relinquishes direct responsiblity for the order. They will pay no other commissions nor allow me to claim the manufacturer spiffs for booked business. Their published payment plan says that commissions will be paid within two pay periods after invoicing. The commissions on the job should be $20K+ with spiffs of $5K. I also have other jobs booked with commissions of 1-2K and spiffs of $2K. They offered $7.5K. Am I right to expect full payment on orders booked?


Asked on 1/25/06, 1:22 pm

3 Answers from Attorneys
Robert Sher Wagshal and Sher

Re: Unpaid Commissions after Termination

From the facts you present, I would think you are entitled to the same commission you would receive if you hadn't been laid off, unless there is language in the company's payment plan that says otherwise. The law on entitlement to commissions is whether the salesman was the procuring cause of a buyer who is ready, willing and able to complete the purchase. It sounds like you meet the test, since the project is underway and will presumably be completed and paid for soon.

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Answered on 1/25/06, 3:28 pm
Jonathon Moseley Jonathon A. Moseley

Re: Unpaid Commissions after Termination

First, if you were hired to "perform" the contract in Virginia, I think that you can sue in Virginia, and I believe I am qualified as a Virginia attorney to comment. In a Virginia court, the judge MIGHT apply Maryland law, but it would still be a Virginia case. I cannot pratice law in Maryland, which is why I make this distinction.

However, you would be equally entitled to bring an action in Maryland, which might be better because it would be easier to actually collect.

So I would NOT discourage you from meeting with Robert Sher.

And I agree with Robert Sher.

EXCEPT... that when you were provided with a severance package, I would be concerned that you signed some kind of waiver or agreement that might block any opportunity to claim any more than what you already got. That is the normal practice with severance packages. SO you have to look into that.

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Answered on 1/25/06, 9:00 pm
G. Joseph Holthaus III Law Offices of G. Joseph Holthaus

Re: Unpaid Commissions after Termination

I would need to review the severance agreement as well as any compensation agreement. You should have available your payment stubs or documents of other form(s) of compensation that were made under the agreement. This agreement is with a Maryland company and is within Maryland jurisdiction. One factor to consider is whether it is advantageous to make a complaint in Maryland instead of Virginia. Contact an attorney to discuss these matters.

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Answered on 1/25/06, 9:39 pm


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