Labor & Employment Law Daily Jury finds IBM sales manager deserves $11M on his race-based retaliation, wrongful discharge, unpaid commission claims
Tuesday, April 20, 2021

Jury finds IBM sales manager deserves $11M on his race-based retaliation, wrongful discharge, unpaid commission claims

By Pamela Wolf, J.D.

The sales manager was terminated after reporting race discrimination in the company’s capping of a Black rep’s sales commissions.

On April 15, 2021, a federal jury in Washington State found against International Business Machines Corporation (IBM), and in favor of a discharged sales manager, awarding $11,085,672 in economic and noneconomic damages for his claims of retaliation, wrongful termination, and unpaid commissions. Before he was fired, the manager had complained about race discrimination in the company’s capping of a Black sales rep’s commissions.

Black rep’s commission capped. The sales manager was a “second-line” manager who directly supervised two first-line managers, who in turn supervised two sales representatives, one who was white and another who was Black. The sales manager was well-regarded by his supervisors until shortly after a big sale by the white sales representative to a new customer. The sale resulted in a very large commission because the commission was not subject to an existing sales quota and an IBM policy against capping commissions. Around the same time, the manager’s Black sales representative earned two large commissions each worth $1.5 million, but those commissions were capped at 15 percent.

Race discrimination complaint. The sales manager complained to his supervisors and to an HR executive that the reduction of the Black sales representative’s commission was against company policy and appeared to be motivated by race discrimination. Meanwhile, an internal audit committee was investigating the sales manager’s failure to cap the white sale representative’s commission or to place a sales quota on the deal that would have reduced the size of the commission. He explained that capping commissions was against IBM company policy, as was creating a quota after a deal closes. Nonetheless, the decision to fire the sales manager was made, and he was terminated a short time later.

Lawsuit. The sales manager sued IBM, asserting claims for retaliation in violation of the Washington Law Against Discrimination (WLAD), wrongful termination in violation of public policy, unjust enrichment, and age discrimination. The court denied IBM’s request for summary judgment because the company’s proffered reason for terminating the sales manager—his failure to add quotas or to reduce the commission of a white sales representative—could be found by a jury to be pretextual.

Jury verdict. And that appears to be exactly what occurred at trial. In its special verdict, the jury found that the sales manager had proved his claims for WLAD retaliation, wrongful termination against public policy regarding race discrimination, wrongful termination in violation of public policy regarding the withholding of wages of the Black sales rep and unpaid commissions, and that the damages he suffered were proximately caused by IBM.

Accordingly, the jury found these damages were sustained by the manager:

  • $1,874,302 in past economic loss;
  • $3,097,642 in future economic loss;
  • $113,728 in unpaid commissions; and
  • $6,000,000 in emotional harm.

The lawsuit, Kingston v. International Business Machines Corporation, was filed in the Western District of Washington at Seattle; the case is No. C19-1488 MJP.

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