Hicks, R. v. Global Data Consultants, LLC

J-A10007-22
2022 PA Super 134ROBERT B. HICKS : IN THE SUPERIOR COURT OF
: PENNSYLVANIA
Appellant :
:
:
v. :
:
:
GLOBAL DATA CONSULTANTS, LLC : No. 746 MDA 2021
Appeal from the Order Entered May 17, 2021
In the Court of Common Pleas of Franklin County
Civil Division at No(s): 2018-834
BEFORE: PANELLA, P.J., KUNSELMAN, J., and KING, J.
OPINION BY PANELLA, P.J.: FILED AUGUST 08, 2022
Robert B. Hicks appeals from the order denying his motion for post-trial
relief after the trial court, in a non-jury verdict, found in favor of his former
employer, Global Data Consultants, LLC, (“GDC”) and denied Hicks’s breach
of contract and Wage Payment and Collection Law (“WPCL”) claims.1 Hicks
seeks payment of commissions pursuant to GDC’s commission schedules, and
further argues that he is entitled to a new trial. We affirm.
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1 While the trial court’s order directed the prothonotary to enter a judgment
in favor of GDC, no judgment was entered on the docket. It is well-settled
that “an appeal to this Court can only lie from judgments entered subsequent
to the trial court’s disposition of any post-verdict motions, not from the order
denying post-trial motions.” Johnston the Florist, Inc. v. TEDCO Const.
Corp., 657 A.2d 511, 514 (Pa. Super. 1995) (en banc) (citation omitted).
However, we may review an appeal in the absence of a properly entered
judgment where, as here, the trial court’s denial of the motion for post-trial
relief was “clearly intended to be a final pronouncement on the matters
discussed ….” Id. at 514 (citation omitted). As such, we will consider this
appeal as being properly before this Court.
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GDC offers information technology (“IT”) services for business,
education, and government clients. On February 11, 2011, GDC presented a
job offer letter to Hicks for employment as a sales representative to sell IT
services. The offer letter stated that Hicks would be paid a salary of $80,000
per year, and that Hicks would be eligible to receive commissions for certain
qualified sales of GDC’s services. The offer letter also highlighted GDC’s
requirement that Hicks execute a non-compete agreement and emphasized
that Hicks’s employment would be at-will: “the representations in this letter
… should not be construed in any manner as a proposed contract for any fixed
term. It is GDC’s policy that all employees are and shall remain an ‘at-will’
employee of the Company.” Offer Letter, 2/11/11. Moreover, GDC’s employee
handbook stated “[e]mployment with [GDC] is ‘at-will’ and will last so long as
both the employee and [GDC] choose to continue the relationship without
limitation on either party. … Nothing in this handbook or in any other oral or
written statement shall limit the right to terminate or alter the employment-
at-will relationship between [GDC] and the employee.” Handbook, 11/1/04,
at Section 101 (Nature of Employment).
GDC attached to the offer letter a “Schedule of Commission and
Incentives for Robert B. Hicks” (“2011 Commission Schedule”), which set forth
its method of calculating the earned commissions. The 2011 Commission
Schedule stated that Hicks would receive commission for
sales invoiced and received from accounts that were acquired by
GDC through your direct and primary efforts[;] [c]ommission
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compensation will be calculated at the end of each month and paid
no earlier than in the last payroll period of the month following the
month in which the commission is earned[.]
2011 Commission Schedule, at 1 (unnumbered). Further, Hicks had to be
employed by GDC when the commission was due. Id.2
Under the 2011 Commission Schedule, Hicks would receive 3-4%
commission of gross revenue for sales of IT services; 7% commission of
permanent staff placement services revenue; and 10% commission of gross
profit on hardware/software sales after cost of goods sold. Further, if the
customer elected to pay the fixed fee up-front in full, it was GDC’s practice to
pay commissions on the full amount of the fixed fee 45 days after the end of
the month. However, if the customer elected to pay the fee every month, GDC
would pay commissions 45 days after the end of the month in which payment
was received from the customer.
Notably, GDC did not require Hicks to sign the offer letter or the 2011
Commission Schedule; in contrast, Hicks signed the non-compete agreement
before beginning work with GDC in February 2011. GDC paid Hicks
commissions consistently with the terms of the 2011 Commission Schedule
for nearly three years.
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2 We note that the language in the 2011 Commission Schedule was similar to
GDC’s stated policy for payment of commissions, which required that (1) the
sale was acquired through Hicks’s direct and primary efforts; (2) GDC received
payment from the customer; and (3) Hicks was employed by GDC on the date
the commission was due to be paid.
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In October 2013, GDC entered into a staffing agreement with Central
Susquehanna Intermediate Unit (“CSIU”). GDC paid Hicks, who was the
account manager for CSIU, commissions under the 2011 Commission
Schedule for the CSIU invoices issued in October, November, and December
2013, for the staffing services performed by GDC.
On January 21, 2014, GDC informed Hicks that it would implement a
modified commission schedule (“2014 Commission Schedule”) for its sales
representatives for all invoices generated in and after January 2014. The 2014
Commission Schedule was substantially similar to the 2011 Commission
Schedule, but pertinently stated the following conditions: (1) GDC reserved
the right to adjust commission schedules at any time; and (2) the commission
was to be made payable to Hicks 45 days following the close of each month.
Further, the 2014 Commission Schedule separated staffing commissions from
IT services; changed commission rates and commissionable sales amounts;
and indicated that the new staffing sales commission rate was to be applied
to gross profit rather than revenue, which constituted a departure from the
2011 Commission Schedule. The parties did not negotiate any of the terms of
the 2014 Commission Schedule and Hicks did not sign the document. Relevant
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herein, GDC applied the commission changes to staffing services provided to
CSIU in January 2014 and ultimately paid to Hicks in March 2014.3
In June 2014, GDC acquired LAM Systems, Inc., which sold computer
hardware and deployment services in the state and local education (“SLED”)
market. Following the purchase, GDC established a SLED segment within its
company. Further, Jeff Sauve, an employee of LAM, became Vice President of
the GDC SLED segment. The SLED segment had a specific commission
schedule, separate from the above schedules, which paid 2.5% commission
on professional services sales revenue and 7% commission on
hardware/software sales on gross profits. The SLED commission schedule also
included language that GDC could adjust the schedule at any time and that
the commission would be paid 45 days following the close of each month. At
the time GDC acquired LAM, Hicks had accounts that fell within the purview of
the SLED segment; however, these accounts were not transitioned to the
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3 Based upon GDC’s policy, it could have applied the 2014 Commission
Schedule to commissions for staffing services performed in November 2013
and paid to Hicks in January 2014 and to services performed in December
2013 and paid to Hicks in February 2014 because those commissions had not
yet been earned by Hicks when the 2014 Commission Schedule went into
effect. However, GDC paid Hicks commission for services performed in 2013
under the 2011 Commission Schedule. According to Hicks, his CSIU
commissions were decreased by 90% compared to what they would have been
if calculated under the 2011 Commission Schedule and amounted to lost
commissions of $55,691.63.
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SLED segment and Hicks was paid commissions under the 2014 Commission
Schedule.
In July 2014, Hewlett-Packard presented GDC’s SLED segment with an
opportunity to provide hardware to Agora, an online cyber charter school for
K-12 students in Pennsylvania. After initially passing on the opportunity to
send a proposal to Agora, Dave Zeiler, who would become Agora’s Liaison CEO
in August 2014, called Sauve4 and asked that GDC submit a proposal. Hicks
prepared the proposal on behalf of GDC, and Agora ultimately named GDC as
its vendor.
GDC chose Hicks to lead the managed solutions/services aspect of the
sale. However, Zeiler insisted that Sauve continue to be involved in the
process, and Sauve acted as Zeiler’s point of contact at GDC. In March 2015,
Agora issued its initial purchase order, which was comprised of hardware,
customized help desk services, and other customized managed solutions and
services.
Prior to the payment of the commission on the Agora sale, GDC
determined that it would split the commission between Sauve and Hicks for
their respective contributions in securing the account. GDC asked Hicks for his
opinion on how the commissions should be divided. Hicks responded that he
should receive 80% of the hardware commissions on the Agora sale and Sauve
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4 Zeiler and Sauve were former teammates on the Clemson University football
team.
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should receive 20%. Moreover, Hicks affirmed that he did not want to cut
Sauve out of the commission split and that he would respect any decision
made by GDC.
In the end, GDC decided that Hicks would receive 100% of the
professional services commissions because he handled nearly all of the
services aspect, and Hicks and Sauve would each receive 50% of the
hardware/software commissions in year one.5 Relevantly, GDC calculated
Hicks’s portion of the commission under the 2014 Commission Schedule, while
calculating Sauve’s commission under the SLED schedule. After the first year
of the deal, GDC informed Hicks that the hardware/software commissions
would be calculated and paid pursuant to the SLED commission schedule and
that Hicks would receive 70% of the commission while Sauve would receive
30% of the commission. Hicks continued to receive 100% of the services
commission. In total, Hicks received approximately $200,000 in commissions
on the Agora sale.
Eventually, the relationship between GDC and Agora deteriorated when
Agora had funding issues. GDC and Agora reached a settlement agreement
relating to any unpaid invoices. Despite the settlement agreement and
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5 Notably, Hicks had split commissions with other GDC employees with respect
to two other clients. See Trial Court Opinion, 3/29/21, at 12 (stating that in
September 2013, Hicks agreed to split commissions on the InsuranceNews
sale); id. at 30-32 (noting that Hicks split commissions on the Clearfield Area
School District beginning in August 2015).
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subsequent payment to GDC, Hicks did not receive certain commissions,
totaling $2,843.52.
On March 28, 2018, Hicks accepted a position with Grainger,
Incorporated. Once the non-compete agreement with GDC terminated on
March 28, 2019, Hicks formed Fortec Solutions, which was a direct competitor
of GDC.
On March 29, 2018, Hicks filed a complaint, followed by an amended
complaint, against GDC, alleging breach of contract and a claim pursuant to
the WPCL due to underpaid commissions. GDC filed an answer with new
matter. Hicks then filed a reply to the new matter. The case proceeded to a
non-jury trial in August 2020. Following the conclusion of the trial, the trial
court denied Hicks’s breach of contract and WPCL claims, except for the
$2,843.52 that Hicks was owed following the termination of the Agora
agreement. Hicks filed a motion for post-trial relief. The trial court entered
an order, denying the motion. This appeal followed.
On appeal, Hicks raises the following questions for our review:
1. Did the trial court commit an error of law by determining
that these commission schedules were not contracts for
compensation secondary to Hicks’s at-will employment
relationship with GDC?
2. Given that Hicks locked in his right to receive specific CSIU
commissions when CSIU signed up for business with GDC,
did the trial court err in dismissing Hicks’s claims seeking
vested-rate commissions and liquidated WPCL damages?
3. Given that Hicks vested commissions under the 2014
Commission Schedule formulas when the sale closed, did
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the trial court err in dismissing Hicks’s claims for shortfalls
and liquidated WPCL damages resulting from GDC’s
retrospective deviations from the schedule?
4. Does Fleck [v. Durawood, Inc., 529 A.2d 3 (Pa. Super.
1987),] compel the conclusion that Hicks vested his right
to specific commissions when GDC accepted the sales he
closed?
5. Where an error of law controls the outcome of a non-jury
trial, this Court may award a new trial with instructions to
the trial court[?]
Brief for Appellant at 7-10 (issues renumbered for ease of disposition;
extraneous language omitted).
Our appellate role in cases arising from non-
jury trial verdicts is to determine whether the findings of
the trial court are supported by competent evidence and whether
the trial court committed error in any application of the law. The
findings of fact of the trial judge must be given the same weight
and effect on appeal as the verdict of a jury. We consider the
evidence in a light most favorable to the verdict winner. We will
reverse the trial court only if its findings of fact are not
supported by competent evidence in the record or if its findings
are premised on an error of law. However, where the issue
concerns a question of law, our scope of review is plenary.
The trial court’s conclusions of law on appeal originating
from a non-jury trial are not binding on an appellate court
because it is the appellate court’s duty to determine if
the trial court correctly applied the law to the facts of the case.
Stephan v. Waldron Elec. Heating & Cooling LLC, 100 A.3d 660, 664–65
(Pa. Super. 2014) (citation, brackets, and ellipses omitted).
We will address Hicks’s first three interrelated claims together. Hicks
contends that the 2011 and 2014 Commission Schedules constitute
enforceable compensation contracts which obligated GDC to pay him the
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promised compensation for the CSIU and Agora sales. See Brief for Appellant
at 45, 57. To that end, Hicks argues that although an at-will employee may
be terminated at any time, the doctrine does not preclude an employer’s
obligation to pay compensation for work completed prior to termination
pursuant to an enforceable contract. See id. at 46-48, 49-50; see also id. at
50, 52-55 (suggesting that the trial court committed legal error by relying on
the “at-will” disclaimer in the offer letter to establish that the 2011 and 2014
Commission Schedules did not constitute contracts).
Specifically, Hicks asserts that the 2011 and 2014 Commission
Schedules met the requirements to establish a contract: (1) the job offer
letter and 2011 Commission Schedule constituted an offer which was intended
to induce Hicks to leave his job; (2) Hicks accepted the offer when he
commenced his employment with GDC; and (3) the contract was supported
by consideration as GDC agreed to pay commission for Hicks’s performance
as an account manager. See id. at 46-49, 52.6 Hicks claims that the trial
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6 We note that Hicks’s argument appears to use the concepts of bilateral and
unilateral contracts interchangeably in discussing this issue. Notably,
”[b]ilateral contracts involve two promises and are created when one party
promises to do or forbear from doing something in exchange for a promise
from the other party to do or forbear from doing something else.” Stephan,
100 A.3d at 665 (citation omitted). “Unilateral contracts, in contrast, involve
only one promise and are formed when one party makes a promise in
exchange for the other party’s act or performance.” Id. (citation omitted).
Here, based upon Hicks’s stated claim and the facts of the case, he is arguing
that he entered into a unilateral contract with GDC. Hence, we will proceed
under this construct.
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court failed to understand that an employer’s payments of wages to an
employee evidences a compensation contract in every employment
relationship and in no way threatens Pennsylvania’s at-will employment
presumption; according to Hicks, the trial court’s finding threatens employees
across the Commonwealth and the right to obtain wages under the WPCL. See
id. at 56.
As a result, Hicks contends that he locked in the commissions
established by the 2011 Commission Schedule when he closed the CSIU sale
in 2013, and that GDC could not apply the 2014 Commission Schedule to this
sale. See id. at 65-67. Hicks argues that GDC’s payment of reduced
commissions resulted in losses of more than 75% and seeks judgment in his
favor in the amount of $55,691.63 in commission shortfalls and $8,131.92 in
liquidated WPCL damages. See id. at 66-67.
Likewise, Hicks claims that the 2014 Commission Schedule controls his
commission for the Agora sale. See id. at 67-68. Hicks highlights that the
2014 Commission Schedule does not permit GDC to split his commissions and
does not premise his commissions on any minimum level of effort-accounts
that were acquired by GDC through Hicks’s direct and primary efforts. See id.
at 69-70. Hicks seeks judgment in his favor in the amount of $189,930.28 in
commission shortfalls and $47,482.57 in liquidated WPCL damages. See id.
at 69, 71.
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“The presumption of at-will employment confers a legal status upon
employees hired for an undefined term of employment which addresses a
particular aspect of the employment relationship—the ability of both employer
and employee to terminate their employment relationship at any time without
explanation or cause.” Braun v. Wal-Mart Stores, Inc., 24 A.3d 875, 942
(Pa. Super. 2011) (citation omitted). “The doctrine does not, however,
address other aspects of the employment arrangement, such as issues
regarding the promised form and amount of compensation for work completed
prior to an employee’s termination.” Id. (citation omitted). Essentially, the
“doctrine does not relieve an employer of its contractual obligation to provide
the compensation promised in return for an employee’s services.” Id.; see
also Sullivan v. Chartwell Inv. Partners, LP, 873 A.2d 710, 716 (Pa.
Super. 2005) (stating that “status as an at-will employee is irrelevant to
whether a contract existed to provide compensation during the term of his
employment.”).
In a unilateral contract in the employment context, “the communication
to employees of certain rights, policies and procedures may constitute an offer
of an employment contract with those terms. The employee signifies
acceptance of the terms and conditions by continuing to perform the duties of
his or her job; no additional or special consideration is required.” Evans v.
Cap. Blue Cross, 269 A.3d 569, 575 (Pa. Super. 2022) (citation omitted).
[T]he provisions comprising the unilateral contract may be viewed
as a contract incidental or collateral to at-will employment. An
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employer who offers various rewards to employees who achieve a
particular result … may be obligated to provide those awards to
qualifying employees, although retaining the right to terminate
them for any or no reason.
Braun, 24 A.3d at 941 (citation omitted).
Further, the WPCL “provides employees a statutory remedy to recover
wages and other benefits that are contractually due to them.” Id. at 953(citation omitted); Hartman v. Baker, 766 A.2d 347, 352 (Pa. Super. 2000)
(stating that the WPCL only “establishes an employee’s right to enforce
payment of wages and compensation to which an employee is otherwise
entitled by the terms of an agreement.”) (citation omitted). The WPCL defines
“wages” to include the payment of commissions as set forth in an employment
contract. See 43 P.S. § 260.2a. Moreover, if an employee demonstrates that
any “amount to be paid pursuant to an agreement remains unpaid, then that
employee may be entitled to liquidated damages.” Braun, 24 A.3d at 954(citation, brackets, and quotation marks omitted).
Here, GDC’s offer letter for employment explicitly stated that Hicks’s
employment would be at-will. See Offer Letter, 2/11/11 at 1 (stating that “[i]t
is GDC’s policy that all employees are and shall remain an ‘at will’ employee
of the Company. While we ask for reasonable notice, you may terminate the
employment relationship at any time, with or without cause, and with or
without notice, and the Company retains the similar right.”); see also N.T.,
8/25/20, at 37 (wherein Hicks admits that he was an at-will employee). As
part of the offer letter, GDC also attached the 2011 Commission Schedule.
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See 2011 Commission Schedule, at 1 (unnumbered). The parties did not
negotiate the terms of the 2011 Commission Schedule and Hicks did not sign
either the offer letter or the 2011 Commission Schedule. See N.T., 9/15/20,
at 64-65.
Moreover, the parties agree that certain conditions had to be met prior
to Hicks earning a commission, including: 1) the sale had to be acquired
through Hicks’s direct and primary efforts; 2) the sale had to be invoiced and
GDC had to receive payment from the customer; and 3) Hicks had to be
employed by GDC on the date the commission was due to be paid. See N.T.,
9/1/20, at 149-51 (wherein Thomas Trgovac, an owner of GDC, testified about
GDC’s method on paying commissions); N.T., 8/25/20, at 40-41, 44-45
(wherein Hicks testified as to the conditions that had to be met to earn
commissions); see also N.T., 9/15/20, at 75 (noting that GDC’s policy was
that a commission was not earned unless and until all conditions were met).
The commissions were paid 45 days after the end of the month in which the
customer paid their fee. See N.T., 9/1/20, at 151-52.
GDC paid Hicks in accordance with the 2011 Commission Schedule,
including for all CSIU invoices issued between October and December 2013.
See N.T., 9/15/20, at 75; N.T., 8/25/20, at 93; see also Hicks Commission
Report, 12/1-31/13, at 1-2. On January 21, 2014, GDC notified Hicks that the
2014 Commission Schedule would be implemented and applied to Hicks’s
invoices beginning in January 2014. See N.T., 8/25/20, at 49-50, 151; N.T.,
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8/24/20, at 94-95. The 2014 Commission Schedule also stated that GDC could
adjust commission schedules at any time; Hicks had to be employed when the
commission was due; and the commission would be paid 45 days following
the close of each month. See 2014 Commission Schedule, at 1 (unnumbered).
Hicks did not sign the 2014 Commission Schedule. See N.T., 9/15/20, at 71.
GDC applied the 2014 Commission Schedule in calculating Hicks’s
commissions for CSIU for sales in January 2014 and onwards. See N.T.,
8/25/20, at 53. Notably, Hicks admitted that he did not immediately earn a
commission on the CSIU sale at the time it signed the sales agreement. See
id. at 56.
In March 2015, Agora ordered hardware, software, and professional
services from GDC. See N.T., 9/15/20, at 90; N.T., 8/24/20, at 161. Prior to
paying the required commission in June 2015, GDC discussed how to divide
the commission between Sauve and Hicks based upon their respective
contributions in securing the account. See N.T., 9/15/20, at 90-91, 140-41.
In May 2015, Hicks emailed Michael Coons, then Vice President of Global
Development, to discuss the Agora commission split and proposed an 80%-
20% split in his favor on the hardware sales but indicated that “you guys have
always been fair[,] and I will respect any decision you make.” Id. at 94.
Subsequently, GDC decided to pay Hicks 50% of the hardware/software
commission in the first year of the sales and 100% of the services commission,
calculated under the 2014 Commission Schedule. See id. at 96-98; see also
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id. at 96-97 (stating that GDC paid Sauve his portion of the
hardware/software commission under the SLED commission schedule). GDC
then informed Hicks that the hardware commissions for the second year of
the Agora deal would be calculated and paid pursuant to the SLED commission
schedule – Hicks would receive 70% of the commissions and Sauve would
receive 30%. See id. at 100. GDC paid Hicks consistently with the split
agreement and Hicks did not dispute this arrangement. See id. at 98-99; see
also N.T., 8/25/20, at 92 (wherein Hicks admits that he accepted the split
agreement regarding Agora).
Based upon our review of the evidence and case law, we agree with
Hicks that the commission schedules constituted unilateral contracts, which
he accepted by continuing the performance of his sales position. Preliminarily,
although the offer letter and the handbook detailed that Hicks was an at-will
employee, the commission schedules do not contain any “disclaimers
explaining that it should not be interpreted as a contract.” Evans, 269 A.3d
at 576; see also Sullivan, 873 A.2d at 716. A reasonable person in Hicks’s
position would understand that his continued performance would entitle him
to compensation in the form of commission as stated in the schedules. See
Evans, 269 A.3d at 576-77 (concluding that a unilateral contract was formed
where a reasonable person in the appellant’s position would understand that
her continued performance as an employee would entitle her to benefits under
the employer’s benefit plan if she met its requirements); Bauer v. Pottsville
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Area Emergency Med. Servs., Inc., 758 A.2d 1265, 1269 (Pa. Super. 2000)
(finding that the employee entered a unilateral contract with his employer
where the terms and provisions of the employee handbook created a duty to
provide the employee with full-time benefits once he worked 36 hours per
week for 90 days). Indeed, GDC was “obligated to pay commissions under the
applicable commission schedule in place at the time the commission is due to
be paid provided the employee had met all other requirements for the
commission to be paid.” Trial Court Opinion, 3/29/21, at 40. Accordingly, we
conclude that a unilateral contract was formed between Hicks and GDC.
Nevertheless, we conclude that Hicks is not entitled to relief on his
breach of contract or WPCL claims that he should receive more compensation
for the CSIU and Agora sales. Here, Hicks does not dispute that the unilateral
contracts (commission schedules) supplanted his status as an at-will
employee. See Brief for Appellant at 51; see also Braun, 24 A.3d at 943(noting that compensation contracts modify an employee’s at-will status if a
reasonable person would interpret the provisions of the contract as
establishing an employer’s intent to overcome the at-will presumption);
Cooper v. Broadspire Services, Inc., 2005 WL 1712390, at *3 (E.D. Pa.
2005) (“[The p]laintiff’s bare allegation that her employment relationship was
contractual is insufficient to rebut the presumption of at-will employment,
particularly in light of the [employer’s] employment at-will policy”).
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It is well-settled that in the context of at-will employment, the employer
not only has the power to terminate the employment relationship but may
also dictate prospective changes to an employee’s terms of employment,
including compensation. Under this framework, an employer cannot
retroactively modify the terms of compensation for work that has already been
completed. See Braun, 24 A.3d at 942; see also Green v. Edward J.
Bettinger Co., 608 F.Supp. 35, 42 (E.D. Pa. 1984) (stating that under
Pennsylvania law, “[t]he undoubted right to terminate an at-will contract
necessarily includes the right to insist upon changes in the compensation
arrangements as a condition of continued employment.”).7 However, when an
employer notifies an employee of changes to the at-will employment contract
and the employee continues working with knowledge of the changes, the
employee has accepted the changed terms. See Braun, 24 A.3d at 942; see
also Gehin-Scott v. Newson, Inc., 848 F.Supp. 585, 589 (E.D. Pa. 1994)
(noting that if an employee is dissatisfied with the terms offered by the
employer, he/she is free to resign).
In light of the foregoing, because Hicks was an at-will employee, there
was nothing prohibiting GDC from prospectively changing the commission
schedule. Here, GDC informed Hicks that it was prospectively changing the
commission schedule in 2014 for all sales in and after January 2014, and Hicks
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7In effect, modification is an inherent feature of at-will employment since the
employer could simply terminate the old contract and offer a new one.
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accepted these new and changed conditions by continuing his employment.
See Brief for Appellant at 51 (wherein Hicks affirms that following GDC’s
implementation of the 2014 Commission Schedule, he continued to work for
GDC for several years afterwards, thereby accepting the changes); see also
Trial Court Opinion, 3/29/21, at 50. As a result, based upon GDC’s policy and
the plain language in the 2014 Commission Schedule, Hicks earned his
commissions for any sales in January 2014 45 days following the close of the
month—March 2014.
Accordingly, GDC did not retroactively change Hicks’s pay. The
introduction and application of the 2014 Commission Schedule was a
prospective change in compensation to Hicks’s at-will employment, which was
lawfully applied to his CSIU commissions after January 2014. See Braun, 24
A.3d at 942; see also Green, 608 F.Supp. at 42.
Likewise, the parties explicitly agreed to the commission split for Agora
prior to the payment of these commissions, and Hicks ultimately accepted the
split commission by continuing his employment. While Hicks makes much of
the plain language of the 2014 Commission Schedule and the requirements
therein, he wholly ignores that the 2014 Commission Schedule, which
predated the Agora commission split, stated that GDC could change the terms
of the commissions, and established that the parties were not bound by them.
Moreover, Hicks does not raise any issue with his prior arrangements to split
commissions with other employees of GDC. See N.T., 8/25/20, at 63 (wherein
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Hicks admitted that he used the prior split commission agreement when
negotiating the split of the Agora commission); see also Trial Court Opinion,
3/29/21, at 12, 30-32. Hence, Hicks has not demonstrated that GDC
committed legal error in its calculation of the Agora commission. See Braun,
24 A.3d at 942; see also Green, 608 F.Supp. at 42.
Finally, although Hicks seeks payment of wages under the WPCL, he
does not present any pertinent argument relating to the application of WPCL
to the facts of this case. See Pa.R.A.P. 2119(a). In any event, nothing in WPCL
prohibits changing the commission plan for at-will employees if the change
was announced before the wages were earned and applies prospectively.
Therefore, because GDC was well within its power to prospectively change the
commission schedules for their at-will employee Hicks, and Hicks accepted the
change in calculation of the prospective commissions, his first three claims are
without merit.
In his next claim, Hicks contends that he locked in his right to specific
commissions when GDC accepted the sales he closed. See Brief for Appellant
at 58, 62. Specifically, Hicks claims that if the compensation contract is silent
as to when the right to pay vests, “an employee vests their right to be paid
specific commissions when an employer accepts the sales opportunity
generated by the commissioned employee.” Id. at 61 (citing Fleck, 529 A.2d
at 5 (“Pennsylvania follows the general rule that a person employed on a
commission basis to solicit sales orders earns or is entitled to his commissions
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when the order is accepted by his employer.”)); see also id. at 58-59, 62-
63. Hicks highlights that the 2011 and 2014 Commission Schedules do not
clearly define when he earned or vested his right to receive the commissions.
See id. at 59, 62-63; but see id. at 60 (acknowledging that the 2011
Commission Schedule stated that he would be “paid no earlier than in the last
payroll period of the month following the month in which the commission is
earned.”) (emphasis omitted). Hicks asserts that once the sales contracts
were executed, GDC could not change the commission formulas that would be
applied to future customer invoices. See id. at 63. Hicks concludes that the
trial court’s misapplication of the holding in Fleck compels the entry of a
judgment in his favor. See id. at 63-65.
Under Pennsylvania contract law, the terms of the contract determine
when commissions are computed and paid. See Daniel Adams Associates,
Inc. v. Rimbach Pub., Inc., 519 A.2d 997, 1004 (Pa. Super. 1987); see
also 27 Am.Jur. Employment Relationship § 53 (“Generally, an employee’s
right to a commission depends on the terms of the parties’ contract; terms
governing the payment of commissions may be a matter of agreement in
advance of the employment or become a part of the undertaking during the
employment.”). However,
[w]here a contract is silent or ambiguous, Pennsylvania law
generally will not divest an employee’s right to an earned
commission. Unless there is a contract provision to the contrary,
an employee selling on a commission basis is entitled to his or her
commission on a sale when the sale is made and accepted by the
employer.
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Little v. USSC Grp., Inc., 404 F. Supp. 2d 849, 854 (E.D. Pa. 2005) (citation
omitted); see also Fleck, 529 A.2d at 5. Hence, the general rule that a
commission is earned when the order is placed, as stated in Fleck, is not
absolute; it may be altered by a written agreement by, or the conduct of, the
parties which clearly demonstrates a different compensation scheme.
Here, the 2011 Commission Schedule stated that “[c]ommission
compensation will be calculated at the end of each month and paid no earlier
than in the last payroll period of the month following the month in which the
commission is earned.” 2011 Commission Schedule, 2/11/11. Additionally, the
schedule stated that Hicks’s “entitlement to receive a commission payment on
the date the commission is due to be paid is contingent on [Hicks] having
status as a regular full-time employee of GDC on the date that commission is
due to be paid.” Id. Further, the 2014 Commission Schedule stated that Hicks
“must be employed by GDC on the date the commission check is due[,] and
[c]ommission will be paid monthly and payable to employee 45 days following
the close of each month.”
The commission schedules explicitly state that compensation will be
calculated at the end of each month and paid no earlier than in the last payroll
period of the month following the month in which the commission is earned.
Moreover, Hicks would only be entitled to the commission if he is a regular
full-time employee of GDC on the date that commission is due to be paid.
Importantly, Hicks affirmed that to secure the commission, he had to meet
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certain conditions pursuant to GDC’s policy, including that the sale had to be
acquired through his direct and primary efforts; GDC had to receive payment
of the invoice from the customer; and he had to be employed by GDC on the
date the commission was due to be paid. See N.T., 8/25/20, at 40-41, 44-45
(wherein Hicks testified as to the conditions that had to be met to earn
commissions); see also Reply Brief for Appellant at 20 (acknowledging that
Fleck does not mean that GDC would have to pay the commission before
receiving payment on the invoices or that Hicks would be entitled to
commissions after his employment with GDC concluded). To that end, Hicks
admitted that he did not receive the CSIU commission at the time CSIU signed
the agreement. See N.T., 8/25/20, at 56.
Accordingly, the plain language of the commission schedules and the
credible testimony and evidence adduced at trial established that Hicks did
not earn a commission until all conditions were met. See Trial Court Opinion,
3/29/21 at 8-9. (“[Hicks] did not offer any evidence to rebut the testimony
establishing that a commission was not earned until all conditions were met
and [GDC] paid the commission to the employee.”). Finally, the “general rule”
stated in Fleck does not establish that Hicks’s right to his commission “vests”
in perpetuity under the commission schedule applicable at the time of the sale,
particularly, where, as here, Hicks was an at-will employee and GDC could
prospectively change commission schedules. Therefore, contrary to Hicks’s
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argument, he did not immediately earn the commission at the time of the
sales and Fleck is inapplicable in this case.
In his final claim, Hicks asserts that this Court must order a new trial
with a finding that the commission schedules are contracts. See Brief for
Appellant at 72-83. According to Hicks, “[a] new trial is necessary to allow for
proper factual findings to be made against the backdrop of the appropriate
legal framework and in place of those findings made by the trial court in the
legal vacuum borne out of the trial court’s resolution of the threshold contract
issue.” Id. at 73. Specifically, Hicks argues that addressing the claims in the
context of a contract would change the result, noting that the parties offered
competing interpretations as to when he earned or vested his right to specific
commissions; and the trial court made credibility determinations based upon
its finding that no contract existed. See id. at 74-83. Hicks claims that a new
trial with the framework that the commission schedules are contracts would
establish his right to the requested commissions. See id. at 83.
We may only grant a new trial if the trial court “clearly and palpably
abused its discretion or committed an error of law which affected the outcome
of the case.” Rohe v. Vinson, 158 A.3d 88, 95 (Pa. Super. 2016) (citation
omitted). “We will reverse the trial court’s denial of a new trial only where
there is a clear abuse of discretion or an error of law which controlled the
outcome of the case.” Id. (citation omitted).
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As noted above, we agree with Hicks that the commission schedules are
unilateral contracts; however, such a finding does not entitle Hicks to relief on
his claims. Indeed, in rehashing his claims, Hicks wholly ignores that he was
an at-will employee and that GDC could prospectively change the terms of his
compensation, including commissions, as part of its power as the employer.
Here, GDC changed the commission schedule in January 2014, Hicks
acknowledges that he accepted the changes by continuing his employment,
and GDC paid Hicks in accordance with the 2014 Commission Schedule for
sales after January 2014. Likewise, Hicks explicitly agreed to split the
commissions on the Agora sales. Finally, Hicks acknowledges that the
conditions triggering his right to the commissions could not be fully met until
at least 45 days after the sale was closed. Considering our above discussion,
we conclude that Hicks is not entitled to a new trial and his final claim is
without merit. See id.Order affirmed.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 8/8/2022
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