Auge v. Fairchild Equipment, Inc., No. 19-2578 (8th Cir. 2020)
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Auge, an experienced industrial-equipment salesman, started with Fairchild in 2013, with a base salary of $50,000 and a commission of 30% on the gross profits from most new equipment sales. Days after the company’s plan for calculating compensation changed in 2017, Auge abruptly quit. Fairchild deposited his commissions into his bank account. He demanded more. He believed he was entitled to a 30% commission on all anticipated gross profits, not just those “booked” in 2017. He also requested immediate payment on several “rental purchase option[s],” even though Fairchild’s policy was not to pay commissions on these rent-to-own arrangements until the end of the rental term. In Fairchild’s view, Auge lost those commissions once he quit.
Auge sued for breach of contract and for alleged violations of the Minnesota Payment of Wages Act. The district court dismissed the suit. The Eighth Circuit affirmed in part but reversed with respect to “rental purchase options,” finding the contract provision ambiguous so that summary judgment was inappropriate. Fairchild owed Auge nothing for other commission, so the Act did not apply.
Court Description: [Stras, Author, with Kelly and Erickson, Circuit Judges] Civil case - Contracts. 2017 provisions of plaintiff's employment contract applied to determine his commissions and the district court properly determined that under the plain language of the contract plaintiff was only entitled to a percentage of the profits booked in that year; the provision regarding rental purchase options was ambiguous, and the dispute should have been submitted to a jury for resolution; the district court's summary judgment is therefore affirmed in part and reversed in part for further proceedings.
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