Unpaid Commissions Litigation
Highly paid salespersons on Wall Street are typically paid a significant percentage of their annual compensation in commissions. A commission is a compensation based on a percentage of the salesperson’s orders or sales.
Such compensation is a commission regardless of whether the salesperson sells securities, goods, services, real estate, insurance, or anything else.
In a commissioned salesperson’s agreed terms of employment must be in writing and signed by both the employer and the commissioned salesperson. This employment agreement must include the following:
- A description of how wages, salary, drawing accounts, commissions, and all other monies earned and payable shall be computed
- How often will the employee be paid?
- The frequency of reconciliation (if the agreement provides for a recoverable draw)
- Details pertinent to payment of wages, salary, drawing account, commissions, and all other monies earned and payable when the employment relationship ceases.
As a penalty, the Manhattan Labor Law creates a presumption that if the terms of employment are not reduced to writing, the terms that the commissioned salesperson presents are the agreed-upon terms of employment.
Both during a commissioned salesperson’s employment and after the employee resigns or is terminated, employers frequently refuse to pay, in whole or in part, earned commissions. Commissioned salespersons properly maintain that the commissions are their right under their contracts of employment.
Employers may miscalculate the commissions earned. Employers may baselessly argue that the terms of the employment agreement give them broad discretion to deviate downward from the agreement’s formula for computing the employee’s commissions. Alternately, brokerage firms may unlawfully withhold payment of commissions because of pending or potential customer complaints against the salesperson or because of pending or potential regulatory investigations arising from the salesperson’s conduct.
In there are contractual, statutory, and common law grounds on which, based on the facts and circumstances, a commissioned salesperson may be entitled to recover his or her underpaid or unpaid commissions. At the Law Offices of David S. Rich, LLC, we have substantial experience representing employees in the investment banking and financial services industries seeking to recover their unpaid commissions.
Litigation And FINRA Arbitration Of Commissions Disputes
FINRA arbitration panels decide the vast majority of Wall Street compensation disputes. Many FINRA, NASD, and NYSE arbitration panels have awarded, to commissioned salespersons, underpaid or unpaid commissions, despite employers’ arguments against such awards. If you have been denied commissions or want to contest a determination made concerning your commissions, contact the Law Offices of David S. Rich, LLC. We assist employees and independent contractors seeking to recover unpaid commissions, including:
- Investment bankers
- Stock, bond, options, derivatives, currency, commodities, and futures traders
- Financial advisors, financial analysts, and research analysts
- Retail brokers
- Managing directors and senior vice presidents
- Sales executives, sales directors, and sales representatives
- Account executives
- Other financial services employees
You May Have Causes Of Action Against Your Employer For Failing To Pay You Commissions
Under Manhattan law, a commissioned salesperson may pursue, among other claims, causes of action for breach of contract, quantum meruit, and violation of Article 6 of the Manhattan Labor Law against his or her employer for failing to compensate the employee for commissions earned by him or her. On a cause of action for unpaid commissions, a salesperson may be entitled, based on the facts and circumstances, to recover compensatory damages, liquidated damages equal to 100% of the unpaid commissions found to be due, attorneys’ fees and costs, and prejudgment interest. Contact the Law Offices of David S. Rich, LLC, to consult with skilled employment and securities litigation and arbitration attorney about your commission dispute.
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