At-Will Commission Salesman Not Entitled to Commissions on Post-Termination Payments

In Linder v. Innovative Commercial Sys. LLC, decided April 30, 2015, the Appellate Division, First Department affirmed the dismissal of plaintiff’s complaint alleging failure to pay commissions.

Citing the Court of Appeals’ decision in Pachter v. Bernard Hodes Group, Inc., the court explained:

Given the seven-year course of dealing between the parties, in which plaintiff received regular statements about his commissions, and the always adhered-to practice of paying the commissions only if and when customers paid on the contracts plaintiff procured, plaintiff earned his commissions upon payment by the customer. Thus, absent an agreement expressly providing for posttermination commissions, plaintiff, an at-will commissions salesman, was not entitled to commissions for payments made by customers after his termination. Furthermore, since plaintiff was fully compensated under his agreement with defendants, he had no claim for a violation of the Labor Law. Nor did he have a claim for unjust enrichment, where defendants merely retained the amounts that they were not obligated to pay for posttermination commissions. (Emphasis added.)

This case illustrates the benefit of attempting to negotiate, where feasible, an agreement expressly providing for so-called post-termination commissions.

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