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MD Wage Claim 4th Cir Case-Unearned Commissions

Court of Appeals for Fourth Circuit denies extention of prevention doctrine on MD wage claim 

In its opinion published November 16, 2007, the United States Fourth Circuit Court of Appeals  in Meson V. GATX Technology Serv. Co. declined to apply the prevention doctrine to award unearned commissions to a terminated employee. 

Meson was a commissioned sales employee of GATX.  GATX sold its assets and Meson’s employment was terminated.  Meson filed suit, including for alleged unpaid commissions which are considered wages under Maryland’s Wage and Hour law.   Meson argued that the performance prevention doctrine applied because the asset sale prevented her from receiving the commissions.  The Court acknowledged the prevention doctrine and the legal principles outlined in Fuller v. Brown, 15 F.2d 672 (4th Cir. 1926): 

“[I]f [one party to a contract is himself the cause of the failure of performance, either of an obligation due from him or of a condition upon which his liability depends, he cannot take advantage of the failure”. 

Meson at p. 5, citing, Fuller v. Brown at 116 (quoting 2 Williston on Contracts 677).  Despite acknowledging the doctrine, the Court found that Meson had not earned the commissions at the time of the asset sale.  The Court distinguished the facts in Meson with the facts of prior case law, finding that events which had not occurred were preconditions to the earning of the commissions in question.  “[P]reventing Meson from attempting to earn commissions is not the same as preventing her from receiving commissions that she has already earned”.  Meson at p. 7.

Meson also argued that the GATX commission plan was illegal as a matter of Maryland law pursuant to the holding in Medex v. McCabe (Maryland Court of Appeals 2002). Commissions were payable To GATX employees under a written commission plan.  The commission plan required Meson to be employed at the time of a “Commission Event” which included “lease renewal, lease extension, equipment sale and lease termination”.  Meson at 3.  Citing Medex v. McCabe, the Court noted, as with the prevention doctrine, that the unearned nature of commissions was fatal to this argument.  “The authority on which she relies for such a proposition holds only that if a commission has already been earned, a requirement that an employee be employed on the day it becomes payable is unenforceable.”

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