Tuesday, June 30, 2015
Ind. Decisions - 7th Circuit decides one Indiana case today, a reversal
In David Lawson v. Sun Microsystems, Inc. (SD Ind., Young), a 21-page opinion, Judge Sykes writes:
David Lawson sold computer maintenance and support services for StorageTek, Inc., mostly to large corporations. He was paid a base salary and commissions on his sales under an annual incentive plan promulgated by the company. Sun Microsystems, Inc., acquired StorageTek in August 2005. At the time Lawson was working on a large sale to JPMorgan Chase & Co., but the deal did not close until March 2006. If StorageTek’s 2005 incentive plan applied, Lawson would earn a seven-figure commission, perhaps as high as $1.8 million. If instead the sale fell under Sun’s 2006 incentive plan, his commission would be far less—about $54,000. Sun determined that the 2006 plan applied and tendered the lower commission. Lawson refused it and sued for breach of contract and violation of Indiana’s Wage Claim Statute. He argued that the 2005 plan continued in effect through at least March 2006, when the JPMorgan Chase deal was finalized.
The district court rejected the statutory wage claim but submitted the contract claim to a jury, which found in favor of Lawson and awarded $1.5 million in damages. Sun appealed, and Lawson cross-appealed to challenge the district court’s ruling on the statutory claim.
We reverse and remand with instructions to enter judgment for Sun. The sale did not qualify for a commission under the terms of the 2005 plan. Although the original plan documents said the plan would remain in effect until superseded by a new one, a September 2005 amendment set a definite termination date for the plan year: December 25, 2005. To earn a commission under the 2005 plan, sales had to be final and invoiced by that date. Because Lawson’s sale wasn’t finalized and invoiced until March 2006, Sun is entitled to judgment as a matter of law. This conclusion necessarily defeats the cross-appeal. * * *
In sum, the JPMorgan Chase sale unambiguously did not qualify for a commission under the 2005 plan. And because Lawson was not entitled to a commission under the 2005 plan, his claim for unpaid wages under the Indiana Wage Claims Statute necessarily fails.
Accordingly, we REVERSE the district court’s judgment and REMAND with instructions to enter judgment for Sun.
Posted by Marcia Oddi on June 30, 2015 02:14 PM
Posted to Ind. (7th Cir.) Decisions