What Commissioned Workers in California Can Learn from the Oracle Settlement

In California, workers who earn commissions rely on clear contracts and timely payments to keep their finances on track. When employers fall short in those areas, the consequences can be serious. Commission pay structures are supposed to be transparent, but in reality, they can be a common source of wage disputes. Sales workers in particular often face issues around unclear agreements, delayed payments and questionable deductions.

A legal battle with one of Silicon Valley’s biggest names recently came to a close. Oracle has agreed to pay $15.5 million to settle a lawsuit filed by two former sales employees in California. The case was not just about one worker’s paycheck. It raised broader concerns about whether the company’s commission practices complied with California labor laws. While Oracle has denied any wrongdoing, the settlement highlights how commission-related violations can add up over time.

The lawsuit, originally filed in 2015 in San Mateo County Superior Court, was brought under the Private Attorneys General Act (PAGA). This California law allows employees to file lawsuits on behalf of the state for Labor Code violations affecting themselves and other workers. In this case, more than 5,000 current and former Oracle employees were allegedly impacted by the company’s policies.

According to the complaint, Oracle did not provide sales employees with written commission agreements when they were hired. In California, that is not just a bad business practice. It is a legal requirement. State law says commission-based employees must receive a written contract that explains how commissions will be earned and paid. The contract must also be signed and provided to the employee. The plaintiffs claimed Oracle delayed or failed to provide these documents and that the commission terms were vague and subject to change without proper notice.

The lawsuit also alleged that Oracle made improper deductions from commissions after sales were completed. In some cases, the company allegedly reduced commission payments based on internal costs or other criteria that were not shared with workers. These practices, if proven, would violate state rules that protect earned wages from being withheld or reduced without justification. The plaintiffs also said they received inaccurate wage statements and were required to sign confidentiality agreements that may have violated their rights.

The case continued for nearly a decade, with both sides participating in court hearings and mediation sessions. A breakthrough finally came in late 2024, when a second round of mediation led to a proposed settlement agreement.

Oracle agreed to pay $15.5 million, which includes around $8.6 million in PAGA penalties. A portion of that amount will go to the California Labor and Workforce Development Agency, while the rest will be distributed to the thousands of affected workers. Oracle has not admitted liability, and the settlement includes a denial of all claims made in the lawsuit.

For California workers, this case is a reminder of how important it is to understand your rights when it comes to commission pay. If you earn commissions, you are entitled to a written agreement that explains how your pay is calculated. The agreement should be clear, signed and provided to you at the beginning of your employment. Employers are also required to issue accurate wage statements and pay commissions promptly once they are earned.

If you suspect your employer is not following the rules around commissions, wage statements or employment agreements, you don’t have to figure it all out on your own. The San Francisco employment lawyers at McCormack Law Firm are dedicated to helping workers understand their rights and explore their options for recovering unpaid wages. Contact us today for a free initial consultation.

Disclaimer: This article is for information purposes only. McCormack Law Firm is not involved in this case.