Opinion
No. CV 09-5029386-S
December 16, 2009
MEMORANDUM OF DECISION
Plaintiff sues defendant PLS, Inc. and Girard A. Robitaille for unpaid commissions allegedly owed him for the third quarter of 2008, in violation of Conn. Gen. Stat. § 31-71a, 31-71c, and 31-72. The facts are as follows:
The plaintiff was hired by defendant PLS, Inc. in the year 2000. From the start he was compensated by a fixed salary and commissions based on sales to his customers, which commissions were paid quarterly. The commissions constituted one-half of his compensation and was the reason he accepted employment with PLS, Inc. In 2003, plaintiff's title changed to Vice President in charge of marketing. He was responsible for generating new business, sustaining all business and, generally, growing the company's customer base.
Although over the years the formula for calculating the plaintiff's commissions changed, in 2005 it provided plaintiff was to receive .882 percent of sales for existing flat business to his customers; 0.5 percent of sales of new business to his existing accounts; 2.7 percent of sales to his new customers; and 1.0 percent of sales to his new customers in the second six months. Each commission calculation was performed for each sales employee based on sales to each of the employee's customers. Defendant's software and printouts confirm commissions were calculated by segregating the sales of each sales employee by category of sale.
The company also had a plan for customer service representatives to receive bonuses based on sales to all customers and based upon a pool of all customers. Plaintiff's commission payments, however, were related to sales to his customers. Also, plaintiff's commissions were not related to the company's profit realized from his customers. His pay slip indicated payment of his regular salary and each quarter of his "commission." CT
In the fourth quarter of 2007, plaintiff agreed to delay payment of his commissions in order to help plaintiff's cash flow.
Plaintiff left the defendant's employ in October 2008. At that time he had not been paid his commissions for the third quarter of 2008 (the months of June, July and August). The calculation of his commission generally took 45 days. It wasn't until late December that he emailed Robin Sauve, the Vice President of Administration, requesting payment of his third quarter commissions.
Ms. Sauve replied that she had turned over his request to President Girard Robitaille, Sr. ("Jerry"), who would be calculating plaintiff's commissions. An exchange of e-mails continued until January 8, 2009 with Ms. Sauve replying that payment was in "Jerry's hands." Plaintiff was never told in the exchange of e-mails that he would not get his commission. Sometime later, defendant Robitaille told plaintiff he would not be paid the commission because he had left the company.
Plaintiff claims he in entitled to commission for the third quarter of 2008 totaling $19,791.52, based upon $4,872.63 for July 2008, $10,431.78 for August 2008, and $4,487.11 for September 2008.
In June 2009, defendant paid the plaintiff the balance of the commission owed for the fourth quarter of 2007, stating that sum was "owed" to the plaintiff.
Conn. Gen. Stat. § 31-72 gives an employee the right to institute a civil action to collect unpaid wages and also a right to recover "twice the full amount of such wages, with costs and such reasonable attorneys fees as may be allowed by the court."
Wages are defined in Conn. Gen. Stat. § 31-71a(3) to mean "compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission, or other basis of calculation." Although the definition seems straight forward, our Supreme Court observed in Mytych v. May Department Stores Co., 260 Conn. 152, 159 (2002), that "it fails to set forth a specific formula by which wages must be calculated or determined." The Appellate Court further stated in Ziotas v. Reardon Law Firm, P.C., 111 Conn.App. 287, 312 (2008): "Accordingly, whether compensation may be considered a wage and CT Page 1236 the method of calculating the amount of wages are derived from the employer-employee agreement." (Italics as in the original.) The method of calculating the amount of plaintiff's commission is not an issue in this case.
In Weems v. Citigroup, Inc., 289 Conn. 769, 782 (2008), the Supreme Court held that bonuses "that are awarded solely on a discretionary basis and are not linked solely to the ascertainable efforts of a particular employee, are not wages under § 31-71a(3)."
In the instant case, payment of commissions was not discretionary in the defendants. The defendant Robitaille created the formula for calculating the commissions. That formula created a right to commissions for each employee based upon the ascertainable effort of each employee retaining his customers or acquiring new ones. Plaintiff's commissions, thus, did not fall within the rubric of Weems, but was, in fact, earned.
Defendant argues that there was no agreement to pay plaintiff a commission after he left the defendant's employment. In that regard, defendant relies upon Christensen v. Bic Corp., 18 Conn.App. 451, 455 (1989). In that case the court denied the plaintiff employee a bonus on the grounds that the defendant never "intended to be contractual bound to pay the plaintiff a bonus in the event he was discharged." In the instant case, in contrast to a bonus, the plaintiff is entitled to the commissions for the months of June, July and August because he earned them.
The fact that he left the defendant's employment is irrelevant. Section 31-71c(a) provides: "Whenever an employee voluntarily terminates its employment, the employer should pay the employee's wages in full not later than the next regular pay day . . ." What is relevant here is not that the defendant never agreed to pay an employee the earned commission after he left employment, but, rather, that the defendant never agreed not to pay the plaintiff his earned commissions after he left employment.
In this case the plaintiff has the burden to prove by a preponderance of evidence that the defendants agreed by either words or deeds, to recognize and undertake a contractual commitment to pay the commission. Christensen v. Bic Corp., 18 Conn.App. 451, 454 (1989). Plaintiff met that burden by proving that the defendant established a plan of paying commissions for the sales effort of the sales employee who sustained or increased sales to each employee's customers; that the defendant paid plaintiff quarterly commissions over eight years; that defendant conceded that payment of the fourth quarter 2007 commission was "owed" to the plaintiff, and that the total implication of the defendant's plan was that the employees earned their commissions for each quarter.
This case is distinguishable from situations such as in Christensen where a bonus was not payable at year's end until it was authorized. Then, an employee may be required to show that the employer agreed to pay the bonus even after he left the employee's employment.
But in the instant case, the plaintiff earned his commission for the third quarter. The defendant cannot justify refusing to pay that commission unless there was a specific agreement not to pay the commission if he left. Although there was some evidence that the defendant did not pay these earned commissions after an employee left, there was no evidence that these employees had claimed those commissions.
Thus, the court concludes that plaintiff's commissions are wages within the meaning of § 31-71a(3). There was an implied agreement for the defendant to pay them even after plaintiff left defendant's employ.
Plaintiff has proven he was entitled to commissions totaling $19,791.52, consisting of $4,872.63 for July of 2008, $10,431.78 for August of 2008, and $4,087.11 for September of 2008. The defendant claims that the amount of commissions for August should be reduced by $4,261.86 for revenues realized from a customer known as Meyer Son on the grounds that that customer was billed in October 2008. Plaintiff, who had administered the commission program at one time, testified that commissions were owed and booked on the job date and not the billing date. The court believes that testimony. As a consequence, the $4,261.86 should be included in the August total. Moreover, plaintiff was still employed at PLS, Inc. on October 10, 2008, when Meyer Son was billed. Thus, the court concludes that plaintiff is entitled to commissions of $19,791.52.
Section 31-72 provides: "Where there has been a failure of an employer to pay wages, the employee should recover `twice the full amount of such wages, with costs and such reasonable attorneys fees as may be allowed by the court' . . ." However, in Hanson v. Clifford, 219 Conn. 217, 229 (1991) the Supreme Court said, "[I]n an action for wages brought pursuant to Conn. Gen. Stat. § 31-72, awards for double damages and attorneys fees are inappropriate in the absence of . . . bad faith, arbitrariness or unreasonableness."
In this case, the evidence was that the defendant, PLS, Inc. refused to pay the plaintiff's third quarter 2008 commission on the grounds that it was not obligated to do so after plaintiff left defendant's employ. This was a wrong, but bonafide belief and doesn't rise to the level of bad faith, arbitrariness, or unreasonableness. As a consequence, the plaintiff is not entitled to double damages and attorneys fees. The plaintiff, however, is entitled to costs and interest at the statutory rate of 10% from January 1, 2009.
As to the personal liability of defendant, Robitaille, the evidence was that he determined whether or not the third quarter commissions would be paid to the plaintiff. He, thus, was "the specific cause of the violation" and is personally liable for the violation. Butler v. Hartford Technical Institute, 243 Conn. 455, 463. Mr. Robitaille "had the ultimate authority and control within the corporation to pay wages," and thus is liable for their payment. Petronella v. Venture Partners, Ltd., 60 Conn.App. 205, 215 (2000).
Based on the foregoing, judgment may be entered in favor of the plaintiff and against both defendants for the sum of $19,791.50 plus costs and statutory interest from January 1, 2009.