Employer cannot terminate employee to avoid pay

Firing an employee to avoid paying him/her a commission, bonus, or other form of compensation is another example of wage theft. An employer cannot fire an employee to deprive him/her of the benefits accrued prior to being terminated. See Phillips v. US Bank, N.A., 2009AP246, 2010 Wisc. App. LEXIS 87, ¶7 (Wis. Ct. App. Feb. 2, 2010) (“an at-will employee may [not] be deprived of benefits that accrued before he or she was let go if the firing was to prevent payment of those benefits”). Basic principle/agent law establishes that an agent “is entitled to the promised amount if the principal, in order to avoid payment of it, revokes the offer and” the agent has performed the work necessary to receive the compensation. Restatement (Second) of Agency § 454 (1958); Philips, at ¶ 7.

The Court of Appeals, in reaching its decision in Phillips, relied on Leen v. Butter Co., 177 Wis. 2d 150, 153 (Ct. App. 1993), a case explaining the procuring cause doctrine. Noting that an employer does not have to act in good faith in terminating an at-will employee, the Court held that an employer must comply in good faith with its “contractual obligations” to properly pay its employees. Phillips, ¶8.