The team of Whitfield Bryson & Mason LLP, helmed by Raleigh, North Carolina based Partner Matthew E. Lee and Attorney Jeremy Williams, won a major victory against International Business Machines Corporation (IBM) for current employee David Swafford after he was denied his rightfully earned sales commissions (David Swafford v. International Business Machines Corporation, Case No. 18-CV-04916-LHK, In the United States District Court Northern District of California, San Jose Division).
Swafford has worked as a sales representative for IBM since 2009, receiving a compensation structure of base salary plus commissions. While IBM consistently and repeatedly circulated educational material to its sales representatives stating commissions on sales would be “uncapped,” Swafford instead was denied his rightfully earned commissions after exceeding his sales quota by 400% in the second half of 2016. Laurie Evans, an IBM executive, claimed the commission amount was “way too steep of a pay out,” and Swafford was informed in February 2017 via email that his commission would instead be capped at 250%.
Swafford filed a lawsuit against IBM claiming IBM had defrauded him when it promised uncapped commissions and that IBM’s whole commissions scheme violates California Labor Code § 2751, which requires employers to set forth the terms of commission payments in a written and signed contract. IBM only provided an Incentive Plan Letter (“IPL”), which explicitly states the commissions “Plan” is not a contract. IBM filed a motion for summary judgment asking the Court to throw out Swafford’s lawsuit; the court refused. Judge Lucy Koh found Swafford’s claim that IBM committed fraud plausible and that the case should be decided by a jury, including potentially considering whether punitive damages should be assessed against IBM. The case was later settled out of court to the parties’ mutual satisfaction.
“IBM has been beating these types of cases for over a decade, so we are happy to finally see courts hold IBM accountable to its employees,” said Lee. “These workers have spent years helping boost the bottom line for IBM. IBM promised them payment for their hard work, and then changed the rules after the fact, instead penalizing the most productive sales employees for going above and beyond their sales quotas. We continue to believe IBM made fraudulent misrepresentations to its own employees and blatantly violated the law by refusing to pay the full commissions that were owed.”
Swafford is not the only IBM sales representative whose commissions were capped, despite the company repeatedly promising otherwise. IBM filed a motion to dismiss a similar lawsuit brought against them by Jerome Beard earlier this year – another sales representative who did not receive full payment of his sales commission. Whitfield Bryson & Mason LLP, in the course of representing Beard, successfully thwarted IBM’s attempt to have the lawsuit summarily dismissed. Beard’s lawsuit is currently still pending against IBM.
“We are proud to represent the employees of IBM in these lawsuits,” said Williams. “We are looking forward to advocating for them in court, and fighting to recover the commissions that they are rightfully owed.”
Devoted to protecting American workers from employers who choose their own bottom lines over paying workers the wages they are owed, the team at Whitfield, Bryson & Mason LLP has led many coordinated litigations in both state and federal courts for workers across the country. The firm has recovered more than $1.50 billion for its clients in numerous states throughout the country.
About Matthew Lee
Matthew E. Lee is a partner at Whitfield Bryson & Mason LLP and has focused his practice on fighting on behalf of individuals against large corporations. He has secured multiple multi-million dollar verdicts and settlements on behalf of his clients, and was appointed to serve on the Steering Committee for Multi-District Litigation No. 2688 In Re: Windsor Wood Clad Window Products Liability Litigation. Mr. Lee was selected for inclusion in Business North Carolina Legal Elite, and named a 2020 North Carolina Super Lawyers honoree.
Whitfield Bryson & Mason LLP has handled thousands of class action cases, and has won significant legal victories for American workers around the country. For more information about the firm, please visit our Website or follow us on Facebook.