Joseph Campbell v. Groundworks Operations, LLC
1476234
Va. Ct. App.Nov 19, 2024Background
- Appellants were former employees of Groundworks Operations, LLC (including JES Construction, LLC) who were paid, wholly or partly, by commissions on sales.
- The employer historically paid commissions based on an oral agreement—half when a deal was finalized and half upon completion and final payment by the customer.
- Company policy was to forfeit unpaid commissions for unfinished jobs if an employee left before job completion.
- In 2022, a new written commission policy was introduced, further restricting commission payouts following termination.
- Appellants sued under the Virginia Wage Payment Act, alleging failure to pay earned commissions; the trial court dismissed the case, ruling commissions were not protected "wages."
- Appellants appealed the trial court's dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are commissions "wages" under the Virginia Wage Payment Act? | Commissions count as wages; the Act's remedial purpose protects all earned compensation, including commissions. | Commissions are distinct from wages; the statute distinguishes the two. | Yes, "wages" is broad and includes commissions. |
| Does the Act permit collective actions for unpaid commissions? | Yes; 2020 amendment allows collective suits for unpaid wages, which include commissions. | No; only wages, not commissions, are covered by the collective action provisions. | Yes, collective actions for unpaid commissions are authorized. |
| Is withholding or forfeiting earned commissions upon termination prohibited? | Yes; the Act prohibits forfeiture of earned wages (including commissions) as a condition of employment. | No; oral and written policies validly control commission payout upon termination. | Yes, forfeiture provisions violate the Act. |
| Can employers demand employees forfeit commissions as a condition of employment? | No; such agreements are barred by the Act. | Yes; commissions are not protected wages, so forfeiture agreements are allowed. | No, forfeiture agreements for commissions are invalid under the Act. |
Key Cases Cited
- Fidelity Ins., Trust & Safe Deposit Co. v. Shenandoah Valley R.R. Co., 86 Va. 1 (Va. 1889) (defining wages broadly as compensation for services rendered)
- Unemployment Comp. Comm’n v. Harvey, 179 Va. 202 (Va. 1942) (commissions can be a form of employee compensation)
- Commonwealth Dep’t of Transp. v. Swiney, 23 Va. App. 467 (Va. Ct. App. 1996) (wages include compensation based on time or output)
- B.P. Solar v. Jones, 49 Va. App. 322 (Va. Ct. App. 2007) (further clarifying the meaning of wages)
- Home Beneficial Life Ins. Co. v. Unemployment Comp. Comm’n, 181 Va. 811 (Va. 1943) (commissions defined as compensation for services rendered)
