Geysen v. Securitas Security Services, USA, Inc.
142 A.3d 227 (2016)
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Rule of Law:
An employment agreement providing that an employee's right to a commission is contingent upon a condition precedent, such as the client being invoiced prior to the employee's termination, is not a violation of public policy or Connecticut's wage statutes because parties are free to define by contract when a wage is considered 'earned'.
Facts:
- In August 2005, Securitas Security Services, USA, Inc. hired Kevin Geysen as an at-will business development manager.
- Geysen's compensation included a base salary and commissions on contracts he procured, governed by a sales incentive plan.
- Effective December 23, 2006, Securitas amended the sales incentive plan.
- The amended plan stipulated that upon an employee's termination, commissions would cease, except for 'any commissionable amounts that have been invoiced to the client prior to the' employee's termination date.
- From 2005 to 2008, Geysen worked for Securitas and secured contracts for clients.
- On May 22, 2008, Securitas terminated Geysen's employment, citing an investigation into improper business activities.
- Geysen alleged that the reason for his termination was a pretext for the nonpayment of commissions for work he had procured but which had not yet been invoiced to the client.
Procedural Posture:
- Kevin Geysen filed a complaint in a Connecticut trial court against Securitas Security Services, USA, Inc., alleging a wage statute violation, breach of the implied covenant of good faith and fair dealing, and wrongful discharge.
- Securitas filed a motion to strike the counts for breach of the implied covenant and wrongful discharge.
- The trial court granted Securitas's motion to strike both counts.
- The parties proceeded on the wage statute claim, stipulating to facts and asking the trial court to rule on the enforceability of the commission provision.
- The trial court ruled that the commission provision was unenforceable because it violated public policy.
- The parties then stipulated to a judgment in favor of Geysen on the wage claim, while preserving their appeal rights.
- Securitas appealed the judgment to the intermediate appellate court, and Geysen cross-appealed the striking of his other two counts; the case was then transferred to the Supreme Court of Connecticut.
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Issue:
Does an at-will employment agreement provision, which conditions the payment of a commission on the employer having invoiced the client before the employee's termination date, violate Connecticut public policy and the state's wage payment statute?
Opinions:
Majority - Rogers, C.J.
No, the commission provision does not violate public policy or the state's wage payment statute. The court emphasized Connecticut's strong public policy favoring freedom of contract, allowing parties to determine the terms of their agreements. Citing its precedent in Mytych v. May Dept. Stores Co., the court explained that Connecticut's wage statutes do not substantively define when wages accrue; rather, they provide remedial protections for wages once they have been earned according to the employer-employee agreement. Here, the agreement established a clear condition precedent for earning the commission: the client must be invoiced prior to the employee's termination. Because this condition was not met for the disputed commissions, they were not 'due' under the statute. However, the court also held that the trial court improperly struck the plaintiff's claim for breach of the implied covenant of good faith and fair dealing. While the contract provision itself is valid, an employer may not terminate an employee in bad faith with the specific intent to deprive them of compensation they have almost earned. The wrongful termination claim was properly stricken because the termination did not violate a clear public policy, as the underlying contract provision was valid.
Analysis:
This decision reaffirms the principle of freedom of contract in defining when compensation is earned in at-will employment relationships in Connecticut. It solidifies that employers may legally implement commission plans with clear conditions precedent, such as invoicing before termination, without violating state wage laws. However, the case carves out a significant protection for employees by recognizing that a bad-faith termination intended specifically to circumvent the payment of such commissions can constitute a breach of the implied covenant of good faith and fair dealing. This distinguishes between the facial validity of a contract term and the bad-faith application of that term, creating an important avenue for employees to challenge pretextual firings designed to avoid compensation.
