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Being sued for sales draw re-pay California

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  • Being sued for sales draw re-pay California

    Hi - I had a sales draw accrue of approx $100k over 4.5 yrs of work. Employer closed territory and terminated me. Now is suing for re-pay of draw. What legal rights do I have in Calif (corporate is in TN) ? Is it as simple as pay it back or claim BK? FYI my current job provides me enough to get by - I do NOT have $100k laying around or an extra $500/mo (or whatever amt they want) to pay over time. Thk you

  • #2
    First question-did you sign any kind of contract? If so, what does it say regarding their rights to recoup draws?

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    • #3
      Hopefully DAW will come by and answer, but I will say that CA has the best anti-employer rights for drawing back any over payment of wages, but I do agree that it can depend on what you signed if that doesn't go against CA wage law. Your best bet is to call the DSLE and present the question.

      You might read through this article: http://www.vtzlawblog.com/2012/07/ar...-wireless-llc/ It does talk about clawing back commissions where the final sale never occurred, but not about a prepaid draw on commissions never earned

      This one is a little deeper, but might help more as it talks about what is enforceable : http://corporate.findlaw.com/human-r...-york-and.html

      At minimum, you need to make sure they are taking out what is legally owed under minimum wage and any OT for hours worked -- because they can never clawback that minimum amount.

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      • #4
        What were your job duties? What is the industry? Those are the basic FLSA questions which determine Exempt status. Unless you are Exempt, then MW and OT laws are in effect. If you are Exempt, then we need to determine exactly which Exempt classification is in play. 100 or so possibilities under federal law, less under CA law. Without the exact Exempt status we do not know what the MW/OT obligations are.

        Assuming that you are non-exempt or some flavor of Exempt that cares about hours worked (many do), then you need to make a best estimate of hours worked by week, and then figure out what the MW/OT obligation is. Even if they have a very good attorney and did everything correctly from their side, MW/OT is very hard legally to make go away.

        If there is a contract, a local attorney needs to see it. There is no chance that a contract can make labor law obligations such as MW and OT go away. Always worth reading. Every piece of paper they sent you in this matter is worth reading, contract or no. You want to know exactly what argument they are trying to make.

        Lastly key word search "California DLSE manual", download it and read the section on commissions. That will give you CA case laws and DLSE rules on the subject. CA law is very different from other states here.

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        You have not given us enough information to be very useful but if I was your employer, I would have paid you exactly MW/OT (and nothing else) up front, called that a non-recoverable draw, and had a formal commission plan which determined commissions due based on payments actually received less the draw (MW/OT). Employers who do more then that are opening doors which otherwise would not exist.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

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