Imagine closing a big sale, anticipating the hefty commission that comes with it, only to find out that your employer refuses to pay after you’ve been terminated. It’s a frustrating and unfair situation that many sales professionals face. Knowing your legal rights and how to recover unpaid sales commissions after termination in San Antonio is crucial in such situations. Galo Law Firm will arm you with the information you need to fight for what you’ve rightfully earned. Call us today at 210-764-6135, and let us advocate for your rights and financial interests.

Understanding Unpaid Sales Commissions

Employees’ rights to unpaid commissions and minimum wage are protected by federal laws like the Fair Labor Standards Act (FLSA). In Texas, the Supreme Court has laid out the applicable standard in cases where former employees claim commissions on sales made before termination in the case of Perthuis v. Baylor Miraca Genetics Laboratories LLC.

The Texas Workforce Commission (TWC) can help employees recover unpaid wages, including sales commissions, through their Wage Claim program. In case you suspect your employer of withholding your commissions, it would be advisable to seek advice from a seasoned employment attorney who can navigate the process and suggest the most effective strategy. Depending on the circumstances, potential remedies and compensation may include:

• back pay
• interest
• additional damages

Legal Protections for Sales Commission Employees

Sales commission employees have legal protections in place, such as the procuring cause doctrine and the terms of their employment contracts and commission agreements. These protections ensure that employees receive the commissions they’ve earned, even if their employment has been terminated.

Procuring Cause Doctrine

The procuring cause doctrine is a legal principle that entitles a terminated employee to receive commissions if they were the primary reason for a sale or contract. This doctrine has been upheld by the Texas Supreme Court in various cases, ensuring that employees receive the commissions they’ve rightfully earned, even after leaving the company.

The doctrine originated from numerous lawsuits brought by real estate agents and is based on the principle of good faith and fair dealing in sales commission contracts. It is upheld by laws in states like Florida and Michigan, among others. Applying the procuring cause doctrine enables terminated employees to reclaim the unpaid commissions they have generated through their efforts.

Employment Contracts and Commission Agreements

Employment contracts and commission agreements serve a significant role in stipulating the terms for earning and collecting commissions, encompassing those after termination. It is essential to have a distinct, signed written agreement for commissions to prevent any misunderstanding or disputes regarding commission payments.

Before signing an employment contract, employees should seek the advice of an experienced contract lawyer from Galo Law Firm who is knowledgeable in drafting and negotiating contracts. Ensuring that your contract clearly states the conditions for earning commissions, such as when they are earned and whether employment through a specific date is necessary to receive them, is vital for avoiding disputes and protecting your rights to unpaid commissions.

Steps to Recover Unpaid Sales Commissions After Termination

Recovering unpaid sales commissions involves several steps, including documenting sales and commissions, consulting with an employment lawyer, and pursuing legal action if necessary to recover commission payments.

Adhering to these steps will enable you to assert your rights assertively and reclaim your rightful unpaid commissions.

Documenting Sales and Commissions

Keeping comprehensive records of sales and commissions is fundamental for substantiating your claim for unpaid commissions. Accurate records can help minimize sales commission disputes and provide evidence in legal proceedings, ensuring a fair outcome.

When documenting sales and commissions, it is important to include the following information:

• Salesperson’s name and identification
• Date of the sale or transaction
• Description of the product or service sold
• Sales amount or revenue generated
• Commission rate or percentage
• Calculation of the commission amount
• Payment terms and schedule
• Signatures of the salesperson and relevant parties involved

Updating your records regularly is essential for guaranteeing that you receive the correct commissions and avoiding potential legal disputes.

Consulting with an Employment Lawyer

It is imperative to consult a seasoned employment attorney from Galo Law Firm to comprehend your rights and alternatives for recovering unpaid commissions. Our employment lawyer can:

• Assess the potential value of your case
• Advise on the right approach to recouping unpaid commissions
• Answer any questions you may have about your specific situation, such as the applicable statute of limitations or alternative dispute resolution methods like mediation or arbitration.

Employment lawyers play a pivotal role in recovering unpaid sales commissions by:

• Guiding laws and regulations about commission payments
• Advocating for your rights
• Evaluating your case
• Compiling evidence
• Negotiating with your employer
• Initiating a lawsuit on your behalf to recoup the unpaid commissions.

Pursuing Legal Action

If consulting an employment lawyer doesn’t resolve the unpaid commission issue, you may need to pursue legal action, such as filing a lawsuit or a wage claim with the Texas Workforce Commission (TWC). The TWC can help employees recover unpaid wages through their Wage Claim program, which investigates claims and takes necessary steps to recover unpaid commissions.

To file a wage claim with the TWC, complete the Wage Claim Form (Form WH-1) and submit it online, in person, by mail, or by fax. Consulting an attorney from Galo Law Firm can help you understand the relevant laws and regulations applicable in your jurisdiction and guide you through the process of filing wage claims or lawsuits to recover unpaid commissions.

Potential Remedies and Compensation

Remedies and compensation for unpaid sales commissions may include back pay, interest, and potentially additional damages, depending on the circumstances. If a company terminates an employee without cause, the employee is legally entitled to some form of compensation. This includes a pro-rata amount of earned commissions for the period they worked, at a minimum.

The amount of compensation in unpaid commission lawsuits will depend on factors such as:

• The amount of commissions owed
• Whether the compensation is guaranteed or discretionary
• Whether the employee must be currently employed to receive payment

By understanding the potential remedies and compensation available, you can better determine your options and the value of pursuing a claim for unpaid commissions.

Protecting Against Retaliation and Discrimination

Employees should be aware of their rights to protection against retaliation and discrimination when pursuing unpaid sales commission claims. Retaliation may include:

• Negative comments on employment reviews
• Increased scrutiny at work
• Denial of vacation time requests
• Discharge, demotion, suspension, or discipline after reporting the unpaid commission issue

Federal laws protect employees from retaliation and discrimination in the workplace, ensuring that they can assert their rights without fear of adverse consequences. If you believe you’ve experienced retaliation or discrimination for pursuing unpaid commissions, consult with an employment attorney at Galo Law Firm who can help you understand your rights and potentially take legal action to protect you from further harm.

Tips for Preventing Future Unpaid Sales Commission Issues

To avert future issues with unpaid sales commissions, maintaining accurate documentation, comprehending your employment contract, and staying updated on your rights are paramount. Accurate records of sales and commissions can help you ensure that you receive the correct commission amounts and avoid disputes.

Understanding your employment contract is also critical, as it outlines the terms and conditions of commission payment, ensuring that you fulfill the necessary criteria to earn and receive your commissions. Additionally, being knowledgeable about your rights can help you identify when your employer violates those rights and take the appropriate steps to recover unpaid commissions when the employer pays incorrectly.

Contact The Galo Law Firm for Help with Unpaid Commissions 

Galo Law Firm provides personalized, results-driven representation for employees and employers in labor and employment law issues, including unpaid sales commissions. Attorney Michael Galo has over 25 years of experience practicing labor and employment law, representing both employees facing workplace injustices and employers in need of legal services.

Whether you’re an employee seeking to recover unpaid commissions or an employer looking for guidance on compliance matters, Galo Law Firm is committed to offering tailored legal representation that addresses your individual needs. To learn more about how Galo Law Firm can help you, call 210-764-6135 or visit our website at https://www.galolawfirm.com/.

Frequently Asked Questions

Does an employer have to pay commissions after termination in Texas?

In Texas, an employee may be entitled to a commission on sales even after termination of employment, provided they were the proximate and but-for cause of the specific sales. Depending on the commission plan’s terms, the employee may be entitled to either a pro-rata share or full commission.

Can commissions be earned after termination?

Yes, commissions can be earned after termination as long as the contract does not explicitly state that continued employment is a requirement and the employee meets the “procuring cause” criteria. In such cases, it is ideal to seek legal help from Galo Law Firm if the employer fails to pay the owed commissions.

What to do if your company isn’t paying you commission?

If your employer is not paying you the commissions you have earned, it is advisable to seek advice from a qualified employment attorney from Galo Law Firm. We can assess the situation and help make sure you receive all of the wages and compensation owed to you.

What legal protections do sales commission employees have?

Sales commission employees have legal protections such as the procuring cause doctrine and their employment contracts or commission agreements, ensuring they receive the commissions they’ve earned, even after their employment has been terminated.

What can I do to prevent future unpaid sales commission issues?

Maintain clear documentation, understand your employment contract, and stay informed about your rights to prevent future unpaid sales commission issues.