Lawsuits Claim IBM Underpays Sales Commissions
Last Updated on August 11, 2020
Important Information
Attorneys working with ClassAction.org are no longer investigating this matter. The information here is for reference only. A list of open investigations and lawsuits can be viewed here.
Case Update
- August 11, 2020 – Investigation Closed
- Thank you to everyone who contacted us in regard to this matter. At this point, attorneys working with ClassAction.org are no longer reviewing claims on behalf of IBM salespeople. For an open list of investigations, please visit this page. The information below was posted when the investigation began and remains for reference only.
At A Glance
- This Alert Affects:
- IBM sales representatives who believe they were underpaid on their commissions.
- What’s Going On?
- IBM has been sued over allegations that it is capping sales representatives’ commissions despite promising that workers could make as much as they want because sales commissions are uncapped.
- Could I Get Fired for Speaking Up?
- Federal law prohibits employers from retaliating against workers who exercise their legal rights.
Attorneys working with ClassAction.org would like to speak to current and former IBM sales representatives who believe they were underpaid on their commissions.
Allegations have surfaced that IBM is capping these employees’ commissions despite promising that salespeople could make as much as they want because there would be no caps on commissions. IBM has already been sued over these claims, and it’s believed additional workers can come forward to try to recover commissions they suspect were withheld from them.
What Are the Workers Saying Happened?
One lawsuit against IBM claims that the company repeatedly represents to its sales representatives that they “could make as much money as they want” because their commissions would never be capped or limited. Despite these claims, the lawsuit alleges that IBM “routinely withholds” commission payments when it unilaterally determines it should.
In this lawsuit, the plaintiff claims he closed a sale that totaled approximately $6.6 million and should have netted him a commission of $800,000. IBM, however, allegedly tried to avoid paying out the full $800,000 by lowering the total sales amount and then capping the commission, the suit claims.
The plaintiff claims IBM changed the sales amount for the deal from approximately $6.6 million to $3.9 million. From there, the company then allegedly lowered the plaintiff’s commission from $800,000 to $348,847, according to the suit.
Furthermore, the suit alleges IBM refused to provide the plaintiff with any details on how his final payment was calculated. The man says that he was left with two choices – accept the lowered sales commission or quit. He claims he later learned that in addition to allegedly capping commissions, IBM also attempts to “claw back” commissions that sales representatives have already earned.
There have been several positive rulings for plaintiffs in individual cases, which has led some attorneys to believe that class action lawsuits are also viable.
Complaints About IBM Reportedly Altering Sales Commissions
The plaintiff in the lawsuit is not the only one who has complained that IBM is capping sales commissions. In fact, an article dating back to 2012, titled “IBM Tries to Screw Salespeople Out of Commissions, Says One Who Just Quit,” profiled a man who claimed the company tried to get out of paying commissions – so much that he ended up quitting after more than 10 years on the job.
Various other grievances about IBM reportedly capping sales commissions can be found on GlassDoor.com and other websites. A sample of these complaints can be read below [sic throughout]:
“Sounds like a healthy salary and plan…reality, it’s not. They have a strange formula for generating your targeted earnings that almost never comes out at what they project.”
— Anonymous Employee, GLASSDOOR.COM
“Sales commission are impossible to collect, they go out of their way to nickle and dime you”
— Anonymous Employee, GLASSDOOR.COM
“I was with IBM for 10 years and was the #1, #2, #1 rep in my software brand in the NATION for years 2009, 2010, 2011 respectively. In 2009 and 2010, I was paid accordingly. At least by IBM standards. In 2011, they screwed us all. 2012 was shaping up to be the same. In 2011, I was paid $40,000 commissions on $12,000,000 in revenue. Why? I was given a $12,000,000 quota. I left in February...and my former region’s best and brightest are peeling off."
— BUSINESSINSIDER.COM
How Could a Lawsuit Help?
A lawsuit could help current and former employees recover money for any commissions that may have been left unpaid. Furthermore, the court could order that IBM change the way it pays its salespeople.
Could I Be Fired for Filing a Lawsuit?
Federal law strictly prohibits companies from taking any retaliatory action (this includes firing, demoting, reassigning, etc.) against employees simply because they've exercised their legal rights. That means it would be illegal for IBM to fire you if you decided to sue the company. Attorneys working with ClassAction.org have said that their clients have not been retaliated against for filing suit against IBM. In fact, one employee was even promoted.
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