A regional sales manager who lived in Maryland but worked in Virginia for a Florida-based company lost her job when her employer was acquired by another firm. Since she had initiated several sales before she was terminated, she felt she was owed additional commissions on those sales. She felt so strongly, in fact, that she sued.
What happened. Ronalda Meson specialized in leasing information technology equipment, although the occasional customer bought a system after leasing it. Her first employer, El Camino Resources, was bought in 2001 by GATX Technology Services (GTS), and Meson continued to manage a small Virginia office, where she supervised two other employees. She was paid a base salary and management compensation but was also subject to a complex commission plan.
Commissions were paid when certain "events" were completed, such as a lease origination, renewal, extension, or termination; or an equipment sale. The plan specified that a salesperson must be employed to earn commissions. When, in April 2004, GTS's parent company announced it was selling GTS to CIT Corp., employees were told they would be paid only to July unless offered new positions with CIT. Meson got no offer and was terminated at the end of June. She sued for breach of contract, plus violations of Maryland's wage law and the federal WARN (Worker Adjustment and Retraining Notification) Act--as well as several other charges.
In a federal district court, she agreed to drop some of her claims, and the judge dismissed all the others in favor of GST. Meson appealed to the 4th Circuit, which covers Maryland, North Carolina, South Carolina, Virginia, and West Virginia.
What the court said. Clearly, Meson's true focus was on leases for which she had been paid origination commissions but for which she sought renewal, extension, or termination commissions. Since GTS was sold before those leases matured, GTS said it didn't owe her anything. In fact, it said, had an unprofitable lease matured on its watch, she might have had to return part of her origination commission.
Judges seemed to find GTS's commission plans, newly tweaked every year, very complex. At each stage of a lease or sale, GTS estimated its profit before determining the commission payable. In effect, then, each payment depended on the calculation before it. Sadly for Meson, judges ruled that no payable 'commission events' had occurred while she was employed, so she was owed nothing. Meson v. GTS, U.S. Court of Appeals for the 4th Circuit, No. 06-1942 (11/16/07).
Point to remember: Meson's office of three workers was too small to qualify for WARN's 90-day notice.
