Late last year, we began representing a sales executive of a publicly traded technology company with unpaid commission claims exceeding $1 million dollars. Our client had greatly exceeded his assigned sales goals that triggered accelerators under his compensation plan that significantly enhanced his commissions. The unique legal issue in the case involved the employer's attempt to retroactively amend our client's compensation plan in an effort to offset the huge commission that had accrued. In fact, after the plan was “amended,” the company claimed our client actually had obligation to repay thousands of dollars in commissions that had been paid to him when the original compensation plan was in effect. It was our position that such retroactive changes were permissible only with respect to future commissions, but were unenforceable for commissions that had already been earned.
Recognizing its tenuous legal position, the company agreed to settle just prior to the initiation of binding arbitration. After months of negotiations, the company agreed to pay a substantial portion of the commissions we claimed were owed.