Opinion ID: 2995694
Heading Depth: 2
Heading Rank: 2

Heading: Perugini’s Compensation was a Bonus

Text: Turning to the merits, Perugini claims that the district court erred in finding that the branch profits constituted bonuses rather than commissions. Perugini argues that because she was contractually entitled to the branch profits, they cannot be considered bonuses. Reliance counters that Perugini’s employment agreement with Homestead characterized the branch profit payments as bonuses, and therefore, Perugini should be bound by the terms of that agreement. The district court found that the branch profits were correctly classified as bonuses, and we agree. Perugini relies on Lister v. Stark, 942 F.2d 1183 (7th Cir. 1991), to support her contention that the branch profits should be considered commission rather than bonus. In Lister, the plaintiff, a salesman whose compensation was based solely on commissions, was promoted to a management position and his compensation was changed to a combination of salary and percentage of regional profits. At least one of the employment documents characterized the regional profits as commission, which was to be considered part of the plaintiff’s salary. However, the plaintiff’s pension was calculated to include salary, without regard to commissions, and the district court upheld that decision. This court reversed, finding it implausible that the plan contemplated that employees promoted to management would receive less in pension benefits than the subordinates they supervised. Perugini latches on this court’s finding in Lister that the regional profits were properly considered commission rather than bonus. Lister, 942 F.2d at 1189. However, as we made clear in Lister, that conclusion was based on the individual circumstances of that case, and our conclusion that a contrary interpretation was implausible: [a]n interpretation will not pass muster . . . when the evidence of records demonstrates that thetrustees entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before [it] or is so implausible that it could not be ascribed to a difference in view or the product of [its] expertise. Lister, 942 F.2d at 1189. In Lister, because the managers’ pensions were based on salary alone, which invariably was less than the salesmens’ pension that were based on commissions, the plan in Lister must have contemplated commissions as a pension benefit. However, interpreting the plan language in this case would not lead to an implausible result. Contrary to the circumstances in Lister, Pergugini’s compensation can easily be characterized as a bonus because not only did the employment agreement define it as such, but because the result is not counter to the evidence before us. The district court correctly classified the branch profits as bonuses. Certainly, the branch profits cannot be considered salary because although they were earned on a monthly basis, they were in no way fixed compensation. Additionally, the branch profits are unlike ordinary commissions because although they are calculated as a percentage of the proceeds, they are not based on Perugini’s personal sales, but rather on the sales of the branch as a whole. Furthermore, Perugini’s contention that the branch profits are contractually required is of no avail because the plan distinguishes discretionary from nondiscretionary bonuses--it excludes nondiscretionary bonuses altogether. Therefore, contrary to Perugini’s claims, the plan contemplates nondiscretionary bonuses like the compensation at issue here. This interpretation is consistent with the description of branch profits in the employment agreement. Accordingly, the district court was correct in finding that the branch profits are better described as bonuses rather than commissions./3