Skip Navigation

6310 Hillside Court
Suite 160
Columbia, MD 21046

P. 410-290-0707

 

 

Baltimore, MD 

P. 410-962-1199

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.”

BTLG Attorneys At Law

Talk to a lawyer

Bold labels are required.

News from BTLG:

Expansion of Definition of Race to Include Hairstyles
Effective October 1, 2020, the definition of race under Maryland discrimination laws has been expanded to also include hair styles
Maryland Economic Stabilization Act (“Mini Warn Law”)
Effective October 1, 2020, Maryland employers who employee 50 or more individuals are required to comply with updated mandatory provisions of the Maryland Economic Stabilization Act (“Mini Warn Law”)
Insurance Coverages for Businesses: Will your insurance cover you for a coronavirus-related loss?
Some insurance policies may allow for claims on coronavirus related losses
Maryland closes restaurants, gyms and theaters
Maryland Governor Hogan issued an Executive Order with further direct impact to Maryland business
More BTLG News