Trial News

An employee who prevailed on a retaliation claim against her former employer is entitled to treble damages on the full amount of her lost compensation, the Massachusetts Supreme Judicial Court has ruled. All unpaid portions of a commission that the plaintiff would have received if her employer had not retaliated against her are considered lost wages under state law and must be trebled, the court determined. (Parker v. EnerNOC, Inc., 139 N.E.3d 328 (Mass. 2020).)

Francoise Parker worked for defendant EnerNOC, an energy services company, and she negotiated a $20 million-plus contract for the company—the largest in its history. Company policy dictated that a salesperson would receive full commission on the guaranteed portion of the contract’s value when the contract was entered into and then a commission on the remainder of the contract’s value once an opt-out period expired—known as a “true-up” policy. If the salesperson was terminated before the entire commission was paid, that person forfeited the remainder.

Parker was terminated after she complained about not receiving the full commission on the guaranteed portion of the contract. She sued the defendant for gender discrimination, violations of Massachusetts wage law, breach of contract, and breach of the covenant of good faith and fair dealing. A jury found in favor of the plaintiff on her breach and wage law claims. The jury awarded damages in the amount of what she was not paid for the guaranteed portion of the contract and additional damages in the amount of what she would have received for the rest of the contract, for which the opt-out timeframe had passed. The jury also awarded punitive damages for the defendant’s retaliatory firing.

The trial judge trebled the plaintiff’s damages on the amount for the guaranteed portion of the contract but not for the rest, finding that Parker was not entitled to claim the portion subject to the true-up policy as lost wages because she was not employed when that money became payable. The defendant appealed, arguing that it did not have a true-up and even if it did, it did not owe that additional commission to the plaintiff because she was no longer an employee.

Massachusetts’s Wage Act requires that a commission be paid when that amount “has definitely been determined” and it “has become due and payable.” The statute prohibits employers from retaliating against employees who seek to assert their rights under the act. It also prohibits employers from creating contracts with employees that exempt them from the statute. The act requires treble damages for violations that result in “lost wages and other benefits.”

The court disagreed with the trial judge’s ruling that the unpaid portion of the commission under the true-up policy was not subject to treble damages because it was not due and payable when the plaintiff was fired. It clarified that this is one way to violate the Wage Act, but it is not necessarily the only way. It also noted that previous cases did not explicitly state that a commission that was not due and payable at the time of termination was not a lost wage, and that the court had not previously considered what could constitute lost wages in a retaliation action. “Commissions that are not yet due to be paid may nonetheless constitute lost wages if the employer’s violations of the act prevent payments of those commission,” the court concluded. Without the employer’s retaliation, the plaintiff would have received the remainder of the commission.

The defendant’s policy (that continued employment through a contract’s opt-out period is required to trigger payment of the rest of the commission) was unenforceable because its unlawful termination of the plaintiff made it impossible for her to fulfill that contingency to receive the full commission. “This result makes logical sense because a fundamental purpose of the Wage Act would be undercut if employers could escape liability . . . by retaliation against employees to avoid paying commissions that would otherwise be due and payable,” the court explained. Therefore, the unpaid amount of the true-up portion of the commission is lost wages under the statute and must be trebled. The state high court also determined that there was sufficient evidence for a jury to find that the defendant had a true-up policy regardless of the forms employees signed saying otherwise, because there were emails indicating such a policy was in effect.

“If the court did not rule the way it did, employers would have a loophole to avoid paying commissions by terminating employees prior to the commission payment becoming due,” said Boston attorney Robert Berluti, who represented the plaintiff. “Hardworking plaintiffs, like Fran Parker, would not receive the full benefit from the services they rendered.”

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