Arkansas Supreme Court Affirms $12,498 Award for Unpaid Commissions
Posted at Arkansas Employment Law by M. McClure on 06/15/2009

The Arkansas Supreme Court recently affirmed a judgment for $12, 498 in unpaid sales commissions to an employee who had been told repeatedly that he was not entitled to commissions. Additionally, the Court considered the evidence required to trigger the penalty provision of Ark. Code Ann. § 11-4-405.  McCourt Manufacturing Corp. v. Rycroft

The employee claimed that he was promised a .5% sales commission at the time he was hired as a Sales Supervisor.  When the employee did not receive his first commission payment, he complained to his supervisor regarding the company's failure to pay the commission.  Until his discharge a year later, the employee continued to complain that he was owed commission.  The Court held that the employee's continued employment did not waive his claim for unpaid wages. 

The Court also reversed a penalty award to the employee for the employer's failure to pay the wages within seven days of a request for payment under Ark. Code Ann. § 11-4-405.  This statute provides that an employer must pay all wages that are due within seven days of a written request or continue paying the employee at the full rate until the wages are paid. The trial court awarded the employee full pay up to the trial date.  However, the Arkansas Supreme Court found that the employee had not provided sufficient evidence that he had notified the "foreman or keeper of . . time" in writing of his demand for unpaid wages.  The employee's attorney had sent a runner to the employer's office with a written request for the unpaid wages, but the runner could not identify the person to whom the letter was given.  The Court found this evidence to be insufficient to trigger the penalty provision of the statute.

The Bottom Line:  Employers should make employment offers in writing.  The offer should include language that indicates that the written offer supersedes any verbal negotiations.  Additionally, the employer in McCourt was fortunate that the delivery of the written request for payment was mishandled.  If the letter had been delivered to the employee's supervisor or the timekeeper, it is likely that the employer would have been required to pay the penalty.