Opinion ID: 2813115
Heading Depth: 3
Heading Rank: 3

Heading: The Dispute Over Lawson’s Commission

Text: As the JPMorgan Chase sale was being finalized, Lawson continued to pursue his commission. On February 22 he requested a “max-draw” on his compensation—a request that the company front his anticipated commission. For the next several weeks, Sun management tried to determine the appropriate commission for the sale. Lawson argued that the JPMorgan Chase work should be classified as Enterprise Support Services under the 2005 StorageTek plan because that’s what it was when he started pursuing the deal more than a year earlier. New contracts for Enterprise Support Services Nos. 13-1502 & 13-1503 11 received the highest percentage commission under the 2005 plan because they constitute new business to the company. With an agreed annual price of $21.2 million for the JPMorgan Chase’s U.S. business and another $6.8 million for its worldwide business, Lawson’s commission under the 2005 plan would exceed $1.8 million.1 While these discussions were ongoing, Sun paid Lawson $17,000 on his draw request, fully recoverable if the company later determined that the commission was not owed. Sun management ultimately rejected Lawson’s request to treat the JPMorgan Chase deal as Enterprise Support Services under the 2005 plan. In light of the Sun/StorageTek merger, the sale was not new business, so the company concluded that the higher commission would be an improper windfall to Lawson. Sun said it would treat the sale as an assigned renewal contract under the 2006 plan, triggering a substantially lower commission. On March 17 and again on March 23, Sun e-mailed Lawson a copy of the 2006 incentive plan (technically called the “Data Management Group Sales Compensation Plan”). The plan itself was dated March 13, 2006, and was retroactively effective to December 26, 2005. On April 4 Lawson received his goal sheet, which contained his individual sales targets for the year. Lawson refused to sign it, fearing that doing so would prejudice his claim to a larger commission for the JPMorgan Chase 1 This figure included a multiyear incentive, which could be awarded to a sales executive for securing contracts of two or more years. Without that incentive Lawson’s commission would be about $1.5 million. 12 Nos. 13-1502 & 13-1503 deal. On May 12 Sun e-mailed Lawson a revised goal sheet, which treated the JPMorgan Chase sale as an assigned renewal and awarded a commission of $54,300. Lawson declined it and refused to sign the goal sheet. Lawson thereafter retained counsel and on June 2 made a final demand for a commission for the JPMorgan Chase sale under the terms of the 2005 StorageTek plan. Sun declined to pay the demand. In October 2006 Lawson was laid off in a reduction in force.