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Check employment agreements for commission cutoffs

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in Human Resources

Here’s a good idea if you are reviewing employment agreements that spell out how you pay commissions: Be sure to specify that the end of employment means the end of commissions.

Recent case: Randy Nein, who worked for Hostpro as a salesman, had signed an employment agreement that specified his base pay and commissions. It stated that once employment ended, so did his commissions.

Nein sued several months after being discharged, claiming the company owed him a large commission for a contract he helped bring in. Hostpro didn’t sign the contract for that piece of business until after Nein had been terminated.

The court rejected Nein’s claim, reasoning that the written employment agreement was clear—no employment means no commission. (Nein v. Hostpro, No. B199497, Court of Appeal of California, 2nd Appellate Division, 2009)


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