Samfiru Tumarkin LLP has secured an important Ontario court victory for an employee whose former employer demanded that he repay nearly $33,000 in commission draws after leaving the company.

In 2250898 Ontario Inc. v. Pepe, the Ontario Divisional Court overturned an earlier judgment against our client and dismissed his former employer’s claim for $32,983.08.

The decision provides an important reminder for employees who receive commission pay: a “draw against commission” does not automatically become a debt that you must repay to your employer if your employment ends.

What Happened in 2250898 Ontario Inc. v. Pepe?

• Matthew Pepe was an experienced insurance broker who was recruited to join Ferrari & Associates Insurance & Financial Services as a Senior Account Executive in 2022.
• His employment agreement stated that he would receive a $90,000 annual draw against commissions for the first three years.
• Pepe resigned during his probationary period after working for the company for several months.
• By that point, the company had paid him $42,375 in draws, while he had earned $9,391.92 in commissions.
• His former employer claimed that he had to repay the difference — $32,983.08 — from his own money.
• Pepe disagreed, arguing that his employment agreement did not require him to repay that amount.

The Employer Initially Won Its Claim

The dispute first went before Ontario’s Small Claims Court, where the employer was successful.

The court found that the commission draws were...

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