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Trebling of Commission Under Wage Act Required Even Though Commission Was Not 'Due and Payable' When Employee Was Wrongfully Terminated, Massachusetts Supreme Judicial Court Rules

In Parker v. EnerNOC, Parker alleged that she was terminated less than one month after closing the most lucrative client contract in EnerNOC’s history in part because she complained about the amount of her commission for the contract. Although Parker prevailed on her Wage Act claim in the BLS, she appealed after the BLS judge did not treble a portion of the commissions she was owed. Parker, as discussed below, prevailed on appeal. 

EnerNOC employees earn a base salary in addition to commissions from client contracts. The client contract here contained an opt-out provision after a one-year trial period. Under EnerNOC’s pay structure, EnerNOC would pay its employees a “guaranteed payment” based on the one-year trial period and a “true-up” payment if the contract survives the trial period. After Parker was terminated, she received a guaranteed payment, but did not receive a true up payment because it was unknown whether the client would continue the contract beyond the one-year period. In the end, the client never exercised the opt-out provision, so Parker would have been entitled to the true-up payment had she not been terminated.

In the BLS where this case originated, the jury found that EnerNOC violated the Wage Act by retaliating against Parker for complaining about the amount of her guaranteed payment commission. Parker was awarded an increased guaranteed commission as well as her true-up commission. The BLS judge affirmed the jury’s award, but trebled only the guaranteed commission finding that “because the unpaid commission amount under the true-up policy was not due and payable at the time of the plaintiff’s termination, it could not be considered a lost wage” and that the Legislature only made treble damages available for an award of lost wages and other benefits, not future economic injury such as future commissions.

On appeal, the parties disagreed as to what part of the damages award was subject to trebling under the Wage Act. The SJC ultimately determined that both types of commissions should be trebled. The SJC noted that:

[W]e have said that the term “wages,” for purposes of the Wage Act, encompasses commissions when the amount of such commissions has been definitely determined and has become due and payable to the employee. However, in so stating, we did not announce a categorical rule that commissions that do not meet those conditions are considered not to be wages under the act; instead, the clause provides that the failure to pay commissions when they are definitely determined and due and payable is one way to violate the act. Further, our cases interpreting the meaning of “definitely determined” and “due and payable” for the purposes of the timing of payment under the act did not contemplate whether unpaid commissions constitute “lost wages” resulting from retaliation.

The Court held that “although [Parker’s] commission never became due and payable pursuant to the true-up policy during her employment, it is, nevertheless, a ‘lost wage’ under the act subject to trebling” because “commissions that are not yet due to be paid may nonetheless constitute lost wages if the employer’s violations of the [Wage Act] prevent[s] payment of those commissions.” 

Case Name: Francoise Parker v. EnerNOC, Inc.

Business Litigation Session of the Massachusetts Superior Court Docket Number: 1684CV02580-BLS2

Date of BLS Decision: June 4, 2018 (Hon. Kenneth W. Salinger)

Massachusetts Supreme Judicial Court Docket Number: SJC-12703

Date of SJC Decision: February 12, 2020 (Hon. Kimberly S. Budd)

  • Maya H. Ginga
    Associate

    Maya H. Ginga is an associate in Nutter’s Litigation Department.

    Before joining Nutter, Maya interned at the Kraft Group LLC. She supported the in-house legal team for all of the Kraft businesses, including the New England ...

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