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Minnesota Federal Court Holds Commissions Are Not "Paid" If They Come with Conditions

August 2013

By: Phoebe A. Taurick, Esq.

An employer that tried to condition payment of commissions to a former employee on the employee waiving certain legal claims constituted a violation of Minnesota law, according to a Minnesota federal court, in Karlen v. Jones Lang LaSalle America's, Inc. After his employment ended, the plaintiff brought suit for a variety of legal claims, including nonpayment of commissions and bonus, and failure to reimburse him for work-related expenses.

After bringing this lawsuit, the plaintiff became entitled to certain commissions based on work he completed while still employed. The defendant employer sent checks for the commissions to the plaintiff; however, when asked by the plaintiff's attorney if cashing those checks constituted any sort of legal waiver of claims, the employer's attorney indicated that it would result in a waiver of some of his claims in the lawsuit. Based on this contention, the plaintiff did not cash the checks. Even though the plaintiff lost on all of his other claims, the court held that the attachment of these conditions (conditions to waive legal claims that had no merit) constituted nonpayment of commissions the plaintiff earned, and under Minnesota law, a plaintiff is entitled to double the amount of commissions earned and unpaid.

This case illustrates that in Minnesota, employees must be paid what they have earned without conditions attached to the payment; any other legal issues should be worked out separately and independently from the issue of payment of earned wages, commissions, etc.