Unpaid Sales Commissions

Natalie Koss assists salespeople in collecting their unpaid sales commissions. It is unlawful for your employer to withhold commissions on sales made during your employment. Whether you’re currently employed or recently terminated, you may be able to recover your unpaid sales commissions. Ms. Koss is experienced in representing sales professionals who are owed commissions.

Attorney Natalie Koss represented a technology salesperson, who won one of the largest unpaid sales commission judgments in Washington, DC, for $1.1 million.

Collecting Unpaid Sales Commissions

Ms. Koss has collected millions of dollars for salespeople in unpaid sales commission disputes, as well as in awards for employment discrimination experienced by sales professionals. She has extensive and specialized experience representing salespeople and sales managers in sales commission and incentive plan disputes.

Unpaid Sales Commissions: Industry Experience

Natalie Koss has provided experienced representation to salespeople and sales managers in many industries and sectors, including:

  • Technology
  • Computer Hardware
  • Software Sales & Service
  • Software-as-a-Service (SaaS)
  • Open Source Bundling & Support
  • Federal Sector
  • Data Storage
  • Medical Devices & Pharmaceuticals
  • Real Estate & Insurance Brokerage
  • Online Advertising, Media & Communications
  • Building Materials & Construction
  • Federal Government Contracting
  • Financial Services & Securities

An open source solutions salesperson represented by Natalie Koss recently won a $200,000+ arbitration award for unpaid sales commissions.

Sales Commissions, Incentive Plans & Bonuses

Employers must pay you all wages, including sales commissions, before you are terminated. Your employer may be liable for damages if they refuse to pay you.

Generally, salespeople are due all commissions that they have earned. When commissions are earned, they become wages, and an employer has the obligation to pay them.

You may earn a commission or contractual bonus after closing a sale or performing the majority of the work required for a project. State laws may protect certain wages regardless of restrictions that employers may seek to impose after a deal is booked. You are entitled to your compensation.

Termination & Separation

Do you lose your commissions when you separate from an employer? The answer requires a complete review of each situation.

Determining whether or not sales commissions have been earned is not always immediately clear. The definition of an earned commission depends on when an employer turns a prospective sale into a booked deal. Compensation plans seek to identify earned commissions, however, the employer may not be forthcoming with the information you need to determine the amount you’re owed.

Before submitting your resignation, schedule a consultation to review your compensation plan and amounts due to you. If you’ve already resigned, received a separation agreement or have been terminated, schedule a compensation consultation immediately to review your claims.

In many cases, you may be surprised to learn that you are due unpaid sales commissions. The actions of the employer could increase their liability and amounts owed to you. 

Unlawful Acts & Employment Discrimination

Salespeople, like any employee, may be owed damages due to unlawful acts and discrimination, in addition to unpaid commission claims. Oftentimes, salespeople are denied their commissions, or employers treat them unfairly through discriminatory actions, including age, race, sex or another type of discriminatory behavior. In every consultation, Natalie Koss will review your employment history and reasons for termination in order to identify additional claims that may increase your award for damages.

In a recent arbitration matter, Natalie Koss represented a Federal sector enterprise software salesperson who won a $2.8 million award for claims related to Family and Medical Leave Act interference and retaliation.

Sales Compensation Plans: Updates, Changes & Restrictions

Compensation plans that include commission pay must be in writing in most jurisdictions. Employers must provide written changes or amendments to these plans before the changes begin to govern a salespersons’ commission pay.

Employers may not change your plan after booking sales, nor may they restrict the amount of earned commission payments due to you. 

Complex situations may arise involving commission limits that are currently in your plan. A compensation plan may have windfall limits or commission caps. Salespeople should scrutinize restrictions and seek counsel when an employer refuses to pay a sales commission based on these limits. Windfalls and caps don’t always apply equally to every type of deal, and employers can easily classify a sale – or even part of a sale – to fit a category that prevents you from receiving all of the compensation from your hard work.

Sales Category Disputes

Incorrect sales categorization is a common area of sales commission disputes. 

An example of mis-categorization is in technology, software and SaaS sales, where deals are categorized as “new sales” or “contract renewals.” New sales receive larger commission payouts than renewals.

Employers, however, don’t always define “new sale.” In many situations, a sales plan may not state whether the sale of a new product line to a current customer is a “new sale” or “renewal.”

This ambiguity creates problems. When a compensation plan fails to define sales categories, it forces managers to interpret the plan themselves. An operations team may mistakingly decide that, based on their understating of a compensation plan, all sales to current customers are renewals. This interpretation may be incorrect, and the salesperson may be due commissions on new product lines to all customers.

An employer may also incorrectly recategorize a previously paid deal from “new sale” to “renewal.” This can result in a charge against the current commission balance or a clawback and lead to a significant income loss for a salesperson.

Employers are often incorrect in deal category disputes, and they do not want to admit their mistake, as it may expose them to additional wage-related costs and penalties.

A review and legal consultation is necessary when a sales category dispute arises. Natalie Koss is highly experienced in this type of dispute.

Arbitration & Litigation for Unpaid Commissions

Commission disputes often resolve through negotiation. However, when an employer refuses to engage in negotiation, the only option is an adversarial process. Through litigation, Natalie Koss has won judgments in favor of her clients, including a million dollar award, and, in many cases, the course that she drives a lawsuit results in the employer settling before trial.

Litigation is not available to everyone. In many cases, a salesperson has previously executed an employment agreement and agreed to binding arbitration for all legal disputes. Arbitration follows the same rules as courtroom litigation, however, a private arbitrator decides the case and issues an award.

The benefits of arbitration include speed. It’s a much faster process than traditional litigation, and the parties are not subject to the court’s schedule. The parties also have a process for selecting the arbitrator. This is very important. The proliferation of arbitration provisions has created a demand for arbitrators, and many attorneys with years of specialized experience in specific areas of law now serve as arbitrators. The result is that arbitration decisions are well-informed decisions by legal specialists. Ms. Koss has successfully represented clients in arbitrations that resulted in multi-million dollar decisions.

Since 2020, most arbitrations have been remote, which does not require travel expenses.

Compensation & Non-Compete Agreements for Salespeople

Natalie Koss regularly counsels salespeople regarding employment agreements. Prior to executing any employment document, you may contact Ms. Koss to schedule a review. Before accepting a new position or signing an updated compensation plan, a full review of the agreement may alert you to significant pitfalls that could impact your earnings or career. You may also have the option to negotiate provisions of your agreement. Ms. Koss can advise you on possible courses of negotiation to achieve your desired results.

Non-compete agreements may be individual documents or a provision of another employment agreement. In some industries, it’s important to understand the non-compete before leaving for a competing employer. Specific industries and employers do not like salespeople defecting to a competitor, and they will threaten the employee – and their employer – with litigation. If you receive a threatening letter from a former employer, contact Natalie Koss. She has counseled employees and helped them successfully navigate these matters. 

Severance Agreement Review & Negotiation for Salespeople 

When you receive a severance agreement, contact Natalie Koss immediately to schedule a consultation to review your agreement. Severance and separation agreements have deadlines, and you must decide how to exercise your rights prior to that deadline. Ms. Koss has reviewed and negotiated numerous severance agreements that, in many situations, have resulted in additional months or years of severance pay.

A severance agreement review includes a full review of your employment situation to determine whether you have any unpaid commissions, wages or have experienced employment discrimination. More information about severance reviews and negotiation is available here.