IBM Uncapped Commissions Lawsuit
An IBM uncapped commissions lawsuit may be an option for sales representatives whose commissions were reduced after the company promised that those commissions would be “uncapped.” Commission-based sales representatives are often rewarded for their sales efforts, including those working in the computer software industry. If you are an IBM software sales representative who did not receive proper commission for services sold, you may be able to pursue compensation with the help of an unpaid wages lawyer.
If you did not receive the commission you deserve, contact Attorney Group to learn about your options. We offer free, no obligation consultations. We can help answer your questions, and if you choose to pursue a claim we can connect you with an affiliated attorney who can assist you throughout the legal process.
International Business Machines Corporation (IBM) is an American multinational technology company that manufactures and markets computer hardware, middleware and software. The company also offers a wide range of products and services, including cloud computing, cognitive computing, commerce, data and analytics, IT infrastructure, mobile, and security.
IBM is responsible for inventing automated teller machines (ATMs), the PC, the floppy disk, the hard disk drive, the magnetic stripe card and the UPC barcode, in addition to a number of other computer hardware and software applications. The company is headquartered in Armonk, New York, and has operations in over 170 countries.
Commission and Wage Laws
In addition to base salary or hourly pay, sales representatives are often rewarded by receiving a commission, or payment for services or products sold. Commissions are typically based on percentages of the goods sold. According to the U.S. Bureau of Labor Statistics, sales people in wholesale and manufacturing, technical and scientific products make a mean annual wage average of almost $93,000.
Federal regulations state that “[c]ommissions (whether based on a percentage of total sales or of sales in excess of a specified amount, or on some other formula) are payments for hours worked and must be included in the regular rate. This is true regardless of whether the commission is the sole source of the employee’s compensation or is paid in addition to a guaranteed salary or hourly rate, or on some other basis, and regardless of the method, frequency, or regularity of computing, allocating and paying the commission. It does not matter whether the commission earnings are computed daily, weekly, biweekly, semimonthly, monthly, or at some other interval.”
In addition to federal wage and hour laws, states may implement their own regulations as they relate to many types of workers, included salary-based commission-earning sales representatives.
Uncapped commissions simply mean that there is no limit to how much a sales representative can make in any given period. Employee base salaries in an uncapped commission plan are often lower than those of a capped plan because there is an expectation that the employee will potentially earn the majority of their pay through commissions.
A capped commission, however, typically has a higher base salary, but places limits on how much a sales rep can earn in commissions. In some cases, capped commissions may include other opportunities to earn income, such as stock options, a percentage of company ownership or year-end bonuses based on the company’s overall performance.
For years, IBM has promised its sales representatives that they can make as much money as they want with the company, even $1 million in a year, because IBM’s commissions are “uncapped” or unlimited.
A lawsuit filed in December 2016 alleges that IBM offered its sales employees to pay whatever their sales formula produced, no matter the amount of the commission. Instead, the lawsuit claims that the tech giant regularly reduces commissions, retaining hundreds of thousands of dollars for itself.
IBM Uncapped Commissions Lawsuit Claims
According to a lawsuit filed in December 2016, IBM “intentionally sought to incentivize” its sales representatives (including the plaintiff in the case) to pursue sales opportunities by repeatedly promoting the company’s unlimited commissions structure. The plaintiff claims that, at multiple sales meetings, he and other sales representatives were told that they could make $1 million because “commissions would never be capped or limited.”
Instead, the lawsuit claims that “IBM routinely withholds commission payments already earned when it unilaterally determines it should,” and “stole” over half of the plaintiff’s sales commission after completing a sale that totaled over $6.6 million. The lawsuit further alleges that IBM has similarly capped, and even attempted to “clawback,” commissions earned by the company’s sales representatives after shamelessly telling those reps that they “can earn as much money as the want at IBM.”
Lauren A. on May 16, 2016
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Is There an IBM Uncapped Commissions Class Action Lawsuit?
To date, an IBM uncapped commissions class action has not been certified on behalf of sales representatives whose commissions were wrongfully capped. Likewise, IBM uncapped commission lawsuit attorneys are doubtful that a class action will be certified for sales reps whose commissions have been capped. Instead, current or former IBM sales representatives whose commission have been reduced, adjusted or cut by the company should contact an uncapped commissions lawsuit attorney today for more information.
IBM Uncapped Commissions Lawsuit News
- September 2017Lawsuit filed in the North Carolina Middle District Court alleges similar allegations to those filed in December 2016 of wrongfully capping commissions.
- December 2016Lawsuit filed in North Carolina on behalf of a former IBM sales representative claims that the company stole “over half” of the plaintiff’s sales commission.
What Are My Options When I’m Not Paid Commission That I’m Owed?
Workers who have been unlawfully denied commission payment may file an uncapped commissions lawsuit with the help of an unpaid wages attorney.
In those cases, the employee can seek damages for:
- Unpaid commissions not paid by the employer
- Liquidated damages in an amount equal to the unpaid commissions
In certain cases, the employee can also require the employer to pay his or her attorney’s fees for bringing the action to recover unpaid commissions.
How an IBM Uncapped Commissions Lawsuit Attorney Can Help
Your employer cannot legally retaliate against you for pursuing unpaid wages. To do so will subject your employer to civil and criminal liability and will allow the employee to seek damages for back wages and liquidated damages.
Any type of retaliation is prohibited, including:
- Termination of employment
- Reducing job duties or hours
- Submitting a poor performance review that is unwarranted
- Firing a relative of the employee
- Any other type of objectively punitive behavior motivated by the unpaid compensation claim
Employers may have resources available to them to defend an uncapped commissions lawsuit, so it is important for an affected employee to seek counsel from an uncapped commissions lawsuit attorney to learn more about their rights and remedies.