Opinion ID: 2978496
Heading Depth: 4
Heading Rank: 1

Heading: Prior Commissions

Text: Before the CCI Agreement, SBC had paid the plaintiffs’ commissions based on each signed contract’s LCR, including three such contracts with CCI. Anton never had a commission lowered. 6 Thus, it was completely reasonable for her to assume, and a jury to conclude, that her commission for the CCI deal would be calculated exactly as it had been in the past. With respect to Snipes, however, SBC contends that at the very least Snipes understood that not all contracts were paid pursuant to their LCRs’. SBC points out that its Sales Compensation Team reviewed two of Snipes’s “large sales” and, in one case, made a “downward adjustment” to the LCR calculation. SBC’s argument fails because a jury could reasonably conclude that Snipes saw the Sales Compensation Team’s review as merely a means to verify that commissions were calculated correctly for large contracts—not to give SBC discretion over commissions for large contracts. Indeed, in the case where SBC made a downward adjustment, it did so because the LCR was incorrectly calculated, not because it was exercising its discretion to reduce the commission. Laura Pike, Associate Director of Compensation at SBC, testified that SBC lowered that commission because a portion of the signed contract, equipment sales, was not eligible for compensation. Pike further testified that SBC often gave commissions pursuant to LCR even when it reviewed large sales. Thus, it was reasonable for a jury to conclude that Snipes understood that SBC’s review of large sales was to check for errors in the calculations of commissions—not to give SBC discretion to reduce the commissions. SBC cites Dyer v. Michigan Department of State Police, 326 N.W.2d 447 (Mich. Ct. App. 1982), for the proposition that no implied right is created based on custom where there is a conflicting express policy of the employer. In Dyer, the question was whether police officers could use work vehicles for personal use since they had been allowed to in the past even though an express policy prohibited such use. See id. at 449-50. The court found that the previous personal use did 7 not affect the binding nature of the express policy for two reasons: (1) the rights and duties of the parties were “not regulated by implication [but rather] they are controlled by the express terms of the official policy statements” and (2) the consent to use the vehicles for personal use was given by supervisors who went beyond their authority. Id. The instant case is distinguishable. First, no express contract exists. In fact, the parties have stipulated that they have agreed to an implied-in-fact contract. Therefore, unlike in Dyer, the parties here are regulated by implication—not necessarily the express terms of the Plan. Additionally, SBC itself established the custom of calculating sales commissions based on each contract’s LCR. SBC has not argued that there was improper consent to the payment terms of previous contracts. The terms of the policy in Dyer clearly prohibited personal use of the work vehicles, whereas here the terms of SBC’s Plan have two possible interpretations. Thus, the reasoning in Dyer does not support SBC’s position. SBC also cites Jensen v. IBM Corp., 454 F.3d 382 (4thCir. 2006), to support its position that custom should not be a basis for determining the terms of the implied-in-fact contract. Jensen is inapposite since it does not address whether custom could be a basis for construing the terms of an implied-in-fact contract. In short, SBC provides no Michigan law that illustrates why custom or course of dealing evidence should not govern the implied contract at issue here. Thus, the custom and course of dealing evidence introduced in this case supports the jury’s conclusion that SBC did not have discretion over the size of commissions.