Tuesday, March 23, 2010

Procuring Cause Doctrine

An employee of an employer is entitled to commissions he/she procures from a ready, willing and able purchaser. The default rule is that such commissions must be paid irrespective of whether the employee is employed at the time the commission is to be paid. See Leen v. Butter Co., 177 Wis. 2d 150, 153 (Ct. App. 1993). Unless an agreement between the employee and employer “provides otherwise, final consummation of the sale is not required.” Fryer v. Conant, 159 Wis. 2d 739, 744 (Ct. App. 1990) (the sale for which the employee was entitled to commissions did not take place until after the time limit in the employment agreement had ran).

Therefore, when an employee does all the work necessary to receive a bonus, commission, or some other similar payment, it must be paid to the employee regardless of whether that employee is still employed. However, should there be a contract between the employee and the employer that requires an employee to be employed when the compensation is to be paid out, the default rule is modified.

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