Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-00797/USCOURTS-cand-3_06-cv-00797-3/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 28:1441 Petition for Removal - Employment Discrimination

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UNITED 

STATES 

DISTRICT 

COURT

For the Northern District of California

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UNITED 

STATES 

DISTRICT 

COURT

U

For the Northern District of California

NITED 

STATES 

DISTRICT 

COURT

U

For the Northern District of California

NITED 

STATES 

DISTRICT 

COURT

For the Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

KEVIN DOGEN,

Plaintiff,

v.

GLOBALWARE SOLUTIONS, INC., and Does 1

through 20,

Defendants. /

No. C 06-00797

MEMORANDUM & ORDER

Motion to Amend Complaint

INTRODUCTION

 Plaintiff Kevin Dogen (“plaintiff”) filed this action against Globalware Solutions, Inc.

(“defendant”) alleging claims for tortious termination in violation of public policy, breach of

contract, breach of the implied covenant of good faith and fair dealing, quantum meruit, unjust

enrichment, promissory estoppel, accounting and unfair business practices. Specifically, plaintiff

alleges that he was fired by defendant, his former employer, shortly before the consummation of a

significant sale in order to preclude payment of commissions to plaintiff. Plaintiff seeks various

damages, including recovery for emotional distress and exemplary damages; however, the central

damages sought are the commissions plaintiff asserts he is due as a result of the revenue generated

by the sale.

Plaintiff now seeks to amend his complaint to include a claim for unpaid wages in violation

of California Labor Code section 201, corresponding prayer for statutory fees and costs pursuant to

California Labor Code section 218.5 and penalties pursuant to California Labor Code section 203. 

Defendant contends that the proposed amendment is futile, untimely and will prejudice defendant. 

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DISTRICT 

COURT

For the Northern District of California

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Having considered the parties’ arguments and submissions, and for the reasons set forth below, the

court enters the following memorandum and order.

LEGAL STANDARD

 The amendment of pleadings is governed by Federal Rule of Civil Procedure 15(a), which

provides a lenient standard for amendment. Where, as here, a party must seek leave of court to

amend its complaint, “leave shall be freely given when justice so requires.” Id. The policy of Rule

15(a) is applied with “extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048,

1051 (9th Cir. 2003) (citation and internal quotation marks omitted).

Reigning in this liberal standard are four factors which, when present, militate against

granting leave to amend: bad faith, undue delay, prejudice to the opposing party and futility. Griggs

v. Pace Am. Group, Inc., 170 F.3d 877, 880 (9th Cir. 1999). When determining whether any of

these factors are present, all inferences should be drawn in favor of granting leave to amend. Id. Of

these factors, prejudice is the most important. Absent prejudice, or a “strong showing” of the

remaining factors, the presumption in favor of granting leave to amend remains. Eminence Capital,

316 F.3d at 1052. Delay alone is not dispositive, but is relevant, particularly when unexplained. 

Lockheed Martin Corp. v. Network Solutions, Inc., 194 F.3d 980, 986 (9th Cir. 1999).

DISCUSSION

Defendant essentially raises two contentions in opposition to plaintiff’s motion to amend. 

First, defendant contends that the unpaid commissions at issue do not constitute “wages” within the

meaning of Cal. Lab. Code section 200 et seq., thereby rendering the proposed additional claim for

violation of Cal. Lab. Code section 201 futile. Second, defendant contends that plaintiff’s claim for

unpaid wages constitutes a substantive change in plaintiff’s allegations, and that defendant will be

prejudiced by this untimely amendment.

Defendant construes plaintiff’s claim of wrongful termination as a claim for wages and

commissions plaintiff would have earned had he remained employed with defendant. Wages are

defined by statute as “all amounts for labor performed,” Cal. Lab. Code section 200(a), and

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DISTRICT 

COURT

For the Northern District of California

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according to defendant’s argument, plaintiff is seeking only recovery for labor he would have

performed. This argument is buttressed by the fact that plaintiff does not seek pre-termination

wages and commissions, but only post-termination commissions.

Defendant’s argument disregards the temporal nature of sales commissions. Commissions

are earned before they are paid, and under California law, discharging an employee to avoid paying

commissions already earned violates public policy. Gould v. Maryland Sound Indus., Inc., 31 Cal.

App. 4th 1137, 1148 (1995). Plaintiff contends that his efforts while employed by defendant

culminated in the sale, and that “[u]nder plaintiff’s compensation agreement, he is entitled to

substantial commissions from the revenue generated from” the sale. First Amended Complaint, ¶¶

8–9. The fact that the commissions would be calculated and paid post-termination does not alter the

fact that they were allegedly earned pre-termination. Thus, on the face of plaintiff’s existing

complaint, plaintiff seeks commissions for labor he performed while employed by

defendant—commissions which would fall within the statutory definition of “wages.” Cal. Lab.

Code § 200(a).

Defendant next argues that plaintiff has not previously alleged that he is owed unpaid wages,

and that as a result, defendant failed in discovery and mediation to plumb the factual depths of

plaintiff’s unpaid wages. This argument falls with the first. Reasonably construed, plaintiff’s

complaint does in fact seek unpaid wages: the commissions plaintiff contends he earned while

employed by defendant. Defendant was on notice of this contention when it was served with the

original complaint in this action, and has demonstrated no prejudice. 

Plaintiff’s proposed amendment does not, in substance, contain new allegations, but only a

new cause of action based on the same facts and a prayer for statutory fees and costs. It is true that

plaintiff delayed in making this amendment, and has failed to explain this delay. Nonetheless,

plaintiff’s delay in making this amendment has not delayed these proceedings and will not require

additional discovery. Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d 708, 712 (9th Cir. 2001). 

Further, delay alone cannot justify denying leave to amend. Id. at 712–13. Accordingly, plaintiff is

granted leave to file a second amended complaint.

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COURT

For the Northern District of California

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CONCLUSION

Based on the above findings, the court hereby GRANTS plaintiff’s motion for leave to file a

second amended complaint.

IT IS SO ORDERED.

Date: 

MARILYN HALL PATEL

District Judge

United States District Court

Northern District of California

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