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Neal v. Eastern Controls

March 18, 2008


On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-1005-05.

Per curiam.


Argued November 28, 2007

Before Judges Axelrad, Payne and Messano.

Plaintiff Joseph Neal appeals from the grant of summary judgment dismissing his complaint against his former employer, defendant Eastern Controls, Inc. (Eastern). At issue is plaintiff's claim to compensation for post-termination sales commissions--commissions on sales orders placed with defendant before he resigned, but not paid for by the purchaser until after he resigned. Plaintiff raises two points on appeal. First, he argues the motion judge erroneously concluded that plaintiff implicitly agreed to defendant's policy regarding post-termination commissions because he continued to work for defendant after the policy was announced. Second, he argues that the motion judge erred as a matter of law by dismissing his claims for "quasi-contract" or "quantum meruit." We have considered these arguments in light of the motion record and applicable legal standards. We affirm.

In reviewing a grant of summary judgment, we use the same standard employed by the trial court. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 230 (App. Div.), certif. denied, 189 N.J. 104 (2006)(citations omitted). We decide first whether there was a genuine issue of material fact; if not, we then decide "whether the motion judge's application of the law was correct." Id. at 230-31. "In carrying out our review, we owe no deference to the interpretation of the motion judge on matters of law." Id. at 231. In this case, the essential facts are not in dispute and plaintiff challenges only the legal conclusions reached by the motion judge on those facts.


Plaintiff was employed as an at-will commissioned salesperson by defendant for nearly twenty years, resigning on November 12, 2004, to accept employment with another company, a competitor of Eastern. In a memo dated September 8, 1989 (the 1989 memo), distributed to the seven or eight commissioned salespersons on staff including plaintiff, Eastern set forth its policy regarding the payment of commissions. Since the memo is brief, we quote it in its entirety.

We are establishing the following policy regarding payment of commissions due.

It is Eastern Controls Inc.'s policy when hiring a new salesman, for an unestablished territory, to keep that salesman on salary for one to two years depending on the situation until the commission income is such that his portion of the income, per our established policy, will sustain or exceed his base salary. With this in mind and the fact that Eastern Controls, Inc. must train a new salesman, should the present salesman retire or leave for any reason, all payment of salaries and/or commissions will terminate on that date. This means that even though you may have sold a large job prior to leaving Eastern Controls, Inc., there will be no commission paid on that project if it is shipped and commission paid to Eastern Controls, Inc. after termination of employment.

Please acknowledge receipt of this memo by your signature below, and return to Carol Lalli for your personnel file.

Plaintiff never countersigned the document or returned it to the personnel department, though he acknowledged he knew of its contents.

On April 17, 1994, Eastern sent a letter to plaintiff and three other commissioned salespersons who had not executed the 1989 memo. The letter noted that "[a]fter reviewing [their] personnel files" Eastern "d[id] not have a completed memo with [their] signature." It requested plaintiff and the others to "review, sign, and return," the attached 1989 memo for inclusion in their personnel files.

Plaintiff did not sign the re-circulated policy memo but acknowledged that he received, reviewed, and was fully aware of its contents. On November 7, 1994, he faxed the following handwritten comments to Eastern:

After reviewing the attached and giving much thought to the subject, I feel that some type of compensation of commissions should be paid to the salesperson leaving the company.

Since we are paid commissions after the fact, it would be more appropriate for a percentage of the commissions on orders booked to be allotted to that salesperson.

Although the record is unclear as to whether Eastern ever responded directly to plaintiff's comments, it is undisputed that it never changed its post-termination commission policy contained in the 1989 memo and plaintiff did not contend that anyone ever received post-termination commissions from the company.

In 1995, Eastern issued a handbook to all its employees and plaintiff acknowledged its receipt. The receipt form reads in relevant part, "I understand that this handbook replaces any and all prior handbooks, policies and practices of the company." This manual primarily referenced employee conduct and responsibility and did not refer to any policy regarding payment of commissions or compensation for any of Eastern's employees.

When plaintiff resigned, his attorney forwarded a letter to Eastern demanding that plaintiff be paid his commissions "for pending orders entered prior" to his resignation.*fn1 By letter from Eastern's president, Cliff McLaughlin, Jr., defendant refused to pay plaintiff any commission for orders pending at the time he resigned. McLaughlin's letter in pertinent part provided,

It has been Eastern['s] [] long-standing policy that once a salesman quits, he is no longer entitled to receive ANY commissions from any orders placed but remaining unpaid on or before the last date of employment for that salesman. [Plaintiff] received a copy of this policy statement memo in May of 1994 ...

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