Recently in Parker v. EnerNOC, Inc., the Supreme Judicial Court held that, per the Massachusetts Wage Act, G.L. c. 149, §§ 148A, 150, an employee, who was deprived of a commission as a result of a retaliatory termination by her employer prior to the commission coming due, was entitled to treble the amount of the unpaid commission.
The plaintiff, EnerNOC’s former employee, earned a base salary and commissions on sales. Per the company’s sales commission policy, the plaintiff earned commissions on deals she closed. If the contracts for such deals had a “termination for convenience” clause, the plaintiff would earn a commission on so much of the contract that was guaranteed. Then, per EnerNOC’s “true-up” policy, once the opt-out, or termination, date in the contract had passed, additional commissions on the entire contract value would be paid to the plaintiff. The sales commission policy also provided that an employee was not eligible for “any further [c]ommissions” after the employee was terminated “for any reason.”
After the plaintiff complained that she had not been paid the entire commission to which she was entitled on the guaranteed part of a contract that she had negotiated, EnerNOC fired her. The plaintiff filed suit alleging, in part, that she was owed the entire commission for the part of the contract that was guaranteed and the “true-up” commission per EnerNOC’s “true-up” policy.
After a trial, the jury awarded the plaintiff an amount for the part of the contract that was guaranteed, a separate amount for the entire contract per the “true-up” policy, and amounts for emotional distress and punitive damages related to the retaliatory firing. The trial judge trebled the damages amount related to the commissions on the part of the contract that was guaranteed, but did not treble the “true-up” commission because it was not “due and payable” and “definitely determined” at the time of the plaintiff’s termination. The parties filed cross-appeals.
The SJC explained that, while commissions are “wages” under the Wage Act if “the amount of such commissions . . . has been definitely determined and has become due and payable to [the] employee,” (internal quotations omitted), it had not stated “a categorical rule that commissions that do not meet those conditions are considered not to be wages under the act.” Thus, the SJC held that even commissions that were not “due and payable” when an employee was terminated are considered “wages” under the Wage Act “if the employer’s violations of the act prevent payment of those commissions.” In this case, EnerNOC’s retaliatory termination of the plaintiff was itself a violation of the Wage Act and, since that violation was what prevented her from earning the “true-up” commission, the “true-up” commission was considered “wages” under the Wage Act and subject to trebling.
Finally, the SJC concluded that EnerNOC’s policy that employees were not entitled to “any further [c]ommissions” if they were terminated “for any reason,” was, per the Wage Act, not enforceable where EnerNOC terminated the plaintiff after she complained about not receiving wages she had earned. In so ruling, the Court noted that “[a]n employment policy cannot provide a loophole through which an employer may [evade paying their employees commissions they would have otherwise earned] via retaliatory termination.”