Contingent Commissions Agreements Are Not Required to Be Paid Upon Termination Under the Massachusetts Wage Act.

Lukas, a former employee of Unidine Corporation, believed that sales commission was still owed to her after she voluntary resigned with company.

As the Director of Business Development, Lukas was responsible for identifying, cultivating and enlisting new customers.  Some of these job duties allowed her to earn an annual commission. The wording in the contract between Lukas and her employers, stated as long as she is actively employed and in good standing with the company, she shall be eligible to receive a commission or bonus providing he/she is not been terminated.

Following her departure, Lukas sought payment of approximately $197,000.00 in sales commissions for the new service contracts that she claimed she produced while employed at Unidine.

Lukas believed she was entitled to seek commissions because sales were “definitely determined” prior to her departure therefore would be consider “due and payable”. Lukas argued that it would be unlawful based on previous the Massachusetts Supreme Judicial Court’s decision in Awuah v. Coverall North America, Inc. (2011), where the Court held that an employer may not lawfully withhold wages to an employee based on an agreement that the wages are not earned until a customer remits payment.

The court found that under the Massachusetts Wage Act, an employee’s commissions can be conditioned on receipt of customer payments upon which the commissions are based.  As such, the court found that Unidine was not required to pay any additional commission payments to Lukas following her resignation from employment.