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  Pachter v. Bernard Hodes Group Inc. (N.Y. 2008)
Ogletree Deakins - July 03, 2008 Pachter v. Bernard Hodes Group, Inc., __ N.Y.3d __, __ N.Y.S. 2d __ (2008) — On June 10, 2008, New York’s highest court addressed the important issue of when a sales commission is “earned,” and thus not subject to deductions for expenses by an employer under the state’s wage and hour laws. The Court held that, in the absence of an agreement to the contrary, commissions are earned when a salesperson “produces a person ready and willing to enter a contract upon his [or her] employer’s terms.”  New York's Highest Court Delivers a Win to Employers Paying Employees on a Commission Basis.Littler Mendelson, P.C. - June 12, 2008 The New York Court of Appeals decision in Pachter v. Bernard Hodes Group Inc., should prove beneficial to employers that pay employees on a commission basis. The court held, among other things, that an employer is permitted under New York's Labor Law to structure its commission formula so that expenses are deducted before commissions become earned wages that must be paid to the employee. Combined with the October 2007 amendments to the commissioned salesperson provisions of the New York Labor Law, the decision provides guidance on how employers may fairly and legally develop, implement and maintain commission compensation agreements. New York Highest Court Upholds Employers' Right to Set Terms of Commission Plans.Jackson Lewis LLP - June 12, 2008 In a decision that is good news to employers, the New York State Court of Appeals held that an employer’s commission plan or the parties’ course of dealing determines when a commission is earned and that prior to such “earning”, New York’s wage deduction limitations are inapplicable. Pachter v. Bernard Hodes Group, 2008 NY Slip Op. 05300 (June 10, 2008). The court also held that “executives” are covered by the New York State Labor Law. In doing so, the court distinguished a prior holding in Gottlieb v. Kenneth D. Laub & Co., 82 N.Y.2d 457 (1993), stating that Gottlieb stands only for the limited proposition that attorneys’ fees are not available for a wage claim brought solely as a common law breach of contract action.
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