Although it involves Texas law, a recent case illustrates the pitfalls that an employer can face when a former employee makes a claim for commissions or compensation after their employment has ended. It also offers suggestions on how employers with commissioned salespeople can avoid the same traps.
Texas-based Baylor Miraca Genetics Laboratories, LLC (BMGL) developed and analyzed genetic tests that were sold to other labs and organizations. In 2015, Brandon Perthius became its vice president of sales and marketing. In addition to earning an annual base salary of $145,000, Perthius was eligible to earn sales commissions. The two-page employment agreement BGML prepared and Perthius signed stated he was employed “at-will.” It also provided that BGML would pay Perthius a 3.5% commission for his “net sales.”
In 2015, Perthius successfully negotiated a lucrative contract between BMGL and Natera, Inc., one of its customers, which earned him a 3.5% commission for sales under that contract. As the Natera contract neared its conclusion in 2016, BMGL directed Perthius to negotiate a contractual amendment that would extend its sales to Natera into the future.
After months of effort on his part, Perthius was successful in obtaining Natera’s agreement to both extend and increase its purchases of BGML products. The new contract with Natera was the largest in BGML’s history. Here’s what happened next:
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