Oracle sued by employees in class action over cancelled commissions

Posted on: March 7th, 2017 by Steve Larson
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A class action lawsuit has been filed in California federal court against Oracle America, Inc. The complaint alleges that Oracle failed to pay its sales force earned wages by retroactively changing contracts to reduce commissions on past sales.

The named plaintiff in the lawsuit alleges that the company told her that she had a negative commission balance of approximately $20,000 after it “re-planned” how much she would be paid for sales she made in 2013. The plaintiff was notified of the change after receiving commissions in November and December 2013 under a previously stated “comp plan,” but Oracle applied the new rate retroactively to June 2013.

“Oracle’s Compensation Department informed plaintiff that pursuant to the comp plan, if she stopped working for Oracle, Oracle would have the right to collect the negative balance from her, including through a lawsuit,” the complaint alleges. The plaintiff quit months later, as soon as she had racked up enough commission earnings to pay off the company-stated debt.

Oracle coerces employees into accepting re-plans by giving them only 24 hours to accept the new commission terms and threatening to withhold paid pending commissions, according to the complaint. Through the practice, Oracle has held back millions of dollars in due commission wages, according to the suit. The commissions are reduced to align the employee pay with the company’s “financial forecasts and bottom line goals.”

The suit alleges causes of action for failure to pay commission wages in breach of California labor code and contract, failure to pay wages upon separation, and unfair competition. The complaint seeks certification of the claims as a class action, restitution, statutory penalties, an award of damages in excess of $150 million, and attorneys’ fees and costs.

The case is Marcella Johnson v. Oracle America Inc., number 3:17-cv-00725, in the U.S. District Court, Northern District of California.