Cohan v. Medline Industries, Inc., No. 16-1850 (7th Cir. 2016)Annotate this Case
Plaintiffs filed a putative class action suit against their former employer, alleging violations of the Illinois Wage Payment and Collection Act (IWPCA), and other state wage payment statutes, including the New York Labor Law and California Labor Code. They claimed that Medline’s practice of accounting for year-to-year sales declines in calculating and paying commissions was impermissible under the terms of their employment agreements and state wage laws. The district court granted Medline summary judgment, finding that plaintiffs had not performed enough work in Illinois for the IWPCA to apply and that Medline and the plaintiffs had agreed to Medline’s method of calculating commissions, so there was no violation of state wage laws. The Seventh Circuit affirmed. Medline’s commission structure is consistent with the written agreements. The court rejected an argument that the structure was, nonetheless, a per se violation of New York and California labor law because it impermissibly recoups Medline’s business losses from its Sales Representatives, even when those losses are outside Sales Representatives’ control. Medline’s inclusion of negative growth in its commission calculation was not an unlawful deduction in disguise, but rather a valid means of incentivizing their salespeople to grow business in their assigned territories.