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CONTRACTS 16: Claim for payment of commissions post termination.

Plaintiff supplied technical workers to defendant and retains a percentage of the fees received by the customers for the workers placed with them. The written agreement signed by plaintiff states the following terms regarding compensation: 5% commission on all billable hours logged for all workers. Commission is paid monthly. All employment contracts are written.  Plaintiff was terminated in 2016.

In 2018, plaintiff filed an action asserting that defendant stopped paying plaintiff the 5% commission for referred workers in 2016 and failed to provide an accounting of billings for employees referred by plaintiff.

Motion for Summary Disposition

Defendant filed a motion for summary disposition. Defendant asserted that plaintiff’s breach-of-contract claim was unenforceable as a matter of law because the written agreement did not require the payment of commissions to plaintiff after termination of his employment or for defendant to provide plaintiff with an accounting of the hours billed for referred workers.

Contract Ambiguous

The court denied summary disposition on plaintiff’s breach-of-contract claim for payment of post termination commissions, noting that the contract was silent regarding termination of the contract and the obligation to pay commissions after the termination of employment.

An employment contract is just a contract. The goal of contract interpretation is to give effect to the intent of the parties, to be determined first and foremost by the plain and unambiguous language of the contract itself.

At best, the contract is silent on this issue. Although silence does not equal ambiguity if the law provides a rule to be applied in the absence of a provision to the contrary.

The court agreed that the contract’s silence on the issue of post termination commissions does not, by itself, require the payment of such commissions. Rather, because the employment contract is ambiguous on this issue and no rule of law governs its resolution, further factual development is necessary to resolve the ambiguity. Therefore, summary disposition under MCR 2.116(C)(8) is inappropriate.

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At Aldrich Legal Services, our attorneys offer comprehensive business law services for business owners and employers.  Our attorneys can review your business and employer contracts to ensure they are not ambiguous.

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The sentencing guidelines are advisory, and although a trial court must determine the applicable guidelines range and take it into account when imposing a sentence, the court is not required to sentence a defendant within that range.

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