Full question:
I'm in sales and my company may be sold. My contract states: 'If terminated with cause, no commissions will be paid after the termination date'. Would the sale of the company (and my not being part of the acquired assets) constitute termination with cause in which case I would lose all my commissions?
- Category: Employment
- Date:
- State: California
Answer:
The answer depends on how 'termination with cause' is defined in your contract or employee handbook. Generally, 'cause' implies some form of wrongdoing or inability to perform your job duties. It usually refers to legitimate business reasons for termination, such as misconduct.
Courts or arbitrators often interpret 'just cause' based on various factors, including:
- Did the company provide prior warnings before taking action?
- Is there a clearly communicated rule regarding the conduct that is reasonable and related to the business's operation?
- Did the employer conduct a fair investigation before making a decision?
- Was the investigation objective, without bias from the supervisor?
- Is there substantial evidence supporting the employee's wrongdoing?
- Has the employer enforced rules consistently and fairly, avoiding disparate treatment?
- Was the discipline appropriate for the severity of the offense and the employee's prior record?
In your case, whether the sale of the company constitutes termination with cause will depend on these factors and the specific terms of your contract.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.