International Business Machines Corp. v. Khoury

Appellant International Business Machines Corporation (IBM) appealed a superior court order upholding a wage claim decision issued by the New Hampshire Department of Labor (DOL) in favor of appellee Gary Khoury. As part of his work, Khoury sold IBM’s products to the federal government. Khoury testified that, prior to July 2014, IBM paid its sales representatives commissions based solely upon revenue-generating sales. According to Khoury, under this arrangement, sales representatives lacked an incentive to promote the deployment of IBM products that had previously been sold to an intermediary business partner (for which they received no commission), and a number of sales representatives had quit and found other jobs within IBM. In July 2014, IBM rolled out a new pilot program that allowed sales representatives to earn commissions on both the sale and deployment of IBM’s products. Under this program, sales representatives would receive a “primary” commission for reaching a revenue or sales quota and a “secondary” commission for reaching a deployment quota. Khoury testified that, approximately every six months, IBM sent each sales representative an individualized Incentive Plan Letter (IPL) defining the method by which the sales representative’s commissions would be calculated for sales and new deployments. IBM presented Khoury with an IPL for the period of July 1 to December 31, 2014. Pursuant to the terms of the IPL, Khoury would receive the “secondary” commission at issue in this case after meeting a quota of $571,000 for certain specified signings. The IPL contained several prominent disclaimers. By the end of the IPL period, he had met and surpassed his quota for the specified signings. At the DOL hearing, he testified that, in December 2014, his manager informed him that this entitled him to a commission payment of $154,124.21. That same month, he received $47,619.23 in advances from IBM towards this commission. Khoury testified that he subsequently made repeated unsuccessful inquiries about the additional funds. In March 2015, Khoury filed a wage claim with the DOL for $106,504.65, the balance of the commission. One month later, Khoury was informed that IBM planned to change his IPL terms by increasing the original quota from $571,000 to $1,000,000. Khoury testified that he was told that he could expect to receive a final payment of approximately $35,000 to $36,000. He stated that he then received a payment of $34,558.71 in May. Upon receiving this payment, Khoury reduced his wage claim against IBM from $106,504.65 to $71,946.27. The New Hampshire Supreme Court found no reversible error in the superior court's order, and affirmed it. View "International Business Machines Corp. v. Khoury" on Justia Law