IBM Faces California Class Action Lawsuit Over Unpaid Sales Commissions

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

As a hardworking employee, you have a reasonable expectation to be paid the full amount you have earned. This includes your regular wages, overtime and sales commissions. Employers are required to pay their salespersons all promised and earned commissions.

There are hundreds, if not thousands, of sales representatives in California who earn sales commissions as employees of IBM. A former IBM employee filed a potential class action lawsuit in a U.S. District Court in San Francisco, accusing the tech giant of failing to pay him and others earned commissions.

IBM also allegedly did not provide employees with a valid written contract in violation of California law. After working for IBM for 17 years, plaintiff Mark Comin left his job in 2018 out of frustration. Comin claimed his former employer did not pay him the commissions he was owed after he closed multiple deals with companies like Apple and Intel.

According to the complaint, IBM does not provide sales reps with a formal contract specifying the terms of their commission payments. Instead, the company gives employees incentive plan letters that outline sales targets and commission rates. There is also a disclaimer that states the letter should not be considered a contract, meaning that the company can pay employees any amount as they see fit.

California labor laws require employers to provide employees with a commission agreement or plan, which is a written contract that contains details of the commission to be paid. Comin accused IBM of incentivizing sales and then later lowering commission rates after a sale is made in order to avoid paying employees what they are owed in the absence of a valid contract.

Other IBM sales reps have made the same claim in similar lawsuits over the years. Each time, the employer has maintained that it does not owe anything to the employees because there is no formal contract for commission payments, the complaint said. IBM was unsuccessful in trying to dismiss Comin’s claims that it engaged in unlawful business practices related to how it structured commissions for sales reps.

If your employer is not paying you the full commissions you are owed, contact the employment law attorneys at McCormack Law Firm. Our law firm is experienced in handling unpaid sales commissions and other employment law issues for workers in the San Francisco Bay Area.