As an attorney who practices in contractor rights and worker rights issues, I encounter many different underpayment scenarios. While all income theft is troubling, it’s particularly tough to encounter those folks who are made victims of their own success. Namely, it’s hard to see a commissioned worker or contractor make a huge sale — earning them a fixed (and large) commission under a contract or commission plan– and at that point, the benefiting company tries to change the deal. It’s as if you can see the wheels turning in the company rep’s mind right after the sale: “I didn’t know you’d make that kind of sale, and a 10% commission could be that much. I think I’ll throw the company’s weight around, and get you to accept something less so I get more.”
If you find yourself in this situation, you’ll certainly feel great pressure. The pressure of wanting to keep what you rightfully earned, versus the pressure of not wanting to lose your entire job or contract if the company you’re dealing with is willing to go to serious lengths in throwing its weight around. This article proposes factors to consider if you find yourself in this situation.
So what do you do, if you hit a grand-slam sale, and the party paying your commissions wants to bean you with a lowball change-up? (Sorry for all the baseball talk, but it seems to arise naturally in these scenarios).
You think things through. Certainly before agreeing or signing off on what they want. If they’re pressuring you to make a fast decision, all the more likely they are trying to force you to make a decision they know will greatly benefit them and hurt you.
While you think things through, consider these things:
— Do you want to work with the company long-term, given they have acted in bad faith on this occasion?
— If you do NOT want to work with the company long-term, is it worth agreeing/signing to the concession they want? For example, if you now plan to cease working with the company in a few months and the concession is worth six months’ income or more, is that a concession worth making to preserve the (short-term) work arrangement?
— Should you talk to an attorney about legal rights and options before agreeing to the requested concession? Of course, you must weigh the potential cost of legal fees versus the potential benefits of securing your full commission and resolving all disputes. Some attorneys (including myself) are willing to work meritorious cases on a contingency or hybrid legal fee arrangement that shares risk and reduces or eliminates out-of-pocket legal fees. Talking through possible contingency or risk-sharing arrangements could alleviate concerns about legal fees. But you must certainly keep in mind potential costs and risks, versus potential benefit, when you start speaking with any attorney.
— What legal rights do you you have? In Wisconsin (where I reside and represent many clients across the State), there are a number of legal claims that potentially provide strong legal rights to someone bilked of commissions. These claims may include breach of contract claims, statutory wage claims, equitable claims, or other important case-law rights (e.g. Phillips v. US Bank) that hold companies responsible for trying to change the deal to avoid paying certain earned benefits or money.
An attorney (whether me or another attorney who practices in contract or wage issues) could help you sort through potential legal claims and options. These include the option of negotiating before litigating, or the option of doing nothing beyond the initial legal evaluation.
The question for you– if you are underpaid commissions due to a post grand-slam change-up– is whether you want to accept the lowball that’s headed your way, or whether you want to look into other options. Getting beaned may get you to first base, so to speak. But there may be other options to allow you to trot all the way to home plate, given you’d hit the sale out of the park in the first place. Okay, I’ll stop with the baseball. Feel free to contact me if you want to discuss commissions.