Robert E Heine v. MacH 1 Global Services Inc
328964
| Mich. Ct. App. | Apr 25, 2017Background
- Petitioner (Heine) worked for respondent (Mach 1) under a written employment agreement providing salary plus commissions/incentives tied to account revenue and margins; Note 7 stated employee must be employed on distribution date to receive incentive checks.
- Petitioner voluntarily resigned before a quarterly commission/incentive distribution; he claimed the disputed payments were "wages" under the Payment of Wages and Fringe Benefits Act (PWFBA), entitling him to immediate payment.
- Respondent treated the disputed payments as "incentive plan" fringe benefits conditioned on employment at distribution, denying payment after resignation.
- An administrative law judge (ALJ) found a contractual ambiguity and held the payments were wages under MCL 408.475(1), ordering payment; the circuit court affirmed the ALJ.
- The Court of Appeals reviewed whether the payments were wages or fringe benefits under the PWFBA and whether the contract was ambiguous; it also considered whether exemplary damages were appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are the disputed payments "wages" under the PWFBA or "fringe benefits" (incentives/bonuses)? | Heine: payments are commissions/wages payable upon being determined and thus owed despite resignation. | Mach 1: payments are part of an incentive/bonus plan (fringe benefits) and payable only if employed on distribution date per contract. | Payments are fringe benefits (incentive/bonus), not wages; entitlement conditioned on employment at distribution. |
| Was the employment contract ambiguous on whether commissions were wages or incentives? | Heine: contract ambiguous (compensation section labels commissions but Note 7 and handbook create inconsistent terms). | Mach 1: contract plainly classifies commissions as incentive/bonus; handbook does not override written contract. | No ambiguity: contract and Note 7, plus handbook references, show commissions are incentive plan items. |
| Does MCL 408.474 prohibit respondent’s withholding of these payments at termination absent written agreement? | Heine: withholding at termination violates PWFBA, so payments are due. | Mach 1: withholding valid because payments are fringe benefits conditioned by written contract on employment at distribution. | MCL 408.474 permits withholding of fringe benefits payable at termination when conditioned by written contract; here payment condition is valid. |
| Is Heine entitled to exemplary damages under the PWFBA? | Heine: respondent’s refusal was wrongful and flagrant, warranting exemplary damages. | Mach 1: no PWFBA violation, so no exemplary damages. | Exemplary damages denied because no violation of the PWFBA was found. |
Key Cases Cited
- Dana v. American Youth Foundation, 257 Mich. App. 208 (procedure and standard for appellate review of agency decisions)
- Boyd v. Civil Service Comm’n, 220 Mich. App. 226 (standard for clearly erroneous factual review)
- Mericka v. Dep’t of Community Health, 283 Mich. App. 29 (deference to agency on factual findings; de novo review for legal questions)
- Gravely v. Pfizer, Inc., 170 Mich. App. 262 (incentive/bonus plans characterized as fringe benefits, not wages)
- Anusbigian v. TruGreen/Chemlawn, Inc., 72 F.3d 1253 (6th Cir.) (bonus/quota arrangements treated as bonus plans rather than commissions)