 Imagine you've diligently worked to meet or exceed your sales targets and are counting on the commission you've earned according to your signed agreement. Then suddenly, your employer says there's a "mistake" in the agreement, or that you’re misinterpreting it, and you're going to be paid less. Can they really do that?
Like most questions, the answer is that it depends. But keep in mind that California law strongly favors employees in situations like these. Here's what you need to know: Your Commission Agreement Must Be in Writing California requires employers to have written commission agreements clearly explaining how commissions will be calculated and paid. You must receive and sign a copy acknowledging this agreement. (Cal. Labor Code § 2751.) Employers Cannot Refuse to Pay Earned Commissions Under California Labor Code § 200, commissions are considered wages once they are earned. Under various other Labor Code sections, employers are prohibited from failing to pay commissions when they are due and may not take back wages that are earned. Simply put, your employer can't retroactively reduce or take back your commission after you've performed your part of the deal. Mistakes Don't Automatically Excuse Payment Obligations Absent unconscionability, unless the mistake in your commission agreement is obvious or you have reason to know of the error, California law provides at least two clear legal theories supporting your entitlement to receive the agreed-upon commission:
Ambiguities Favor the Employee Employers may try and claim that you are misinterpreting your agreement, or that you don’t understand certain terms or phrases. While terms or phrases may have common or industry specific meanings, sometimes your employer’s poor choice of words causes there to be what courts refer to as an “ambiguity”— a term, phrase, or provision that is unclear, vague, or open to multiple reasonable interpretations. In those cases, California has long held that those ambiguities will be interpreted against the drafter of the agreement, which in most cases will be the employer. (Cal. Civ. Code § 1654; Sandquist v. Lebo Automotive, Inc. (2016) 1 Cal.5th 233.) Attorney's Fees and Costs If you're forced to sue for unpaid commissions and win, California law requires your employer to pay your reasonable attorney’s fees and costs. (Cal. Lab. Code § 218.5.) Bottom Line If you've performed your job based on a commission agreement, California law protects your right to be paid as promised—even if your employer claims there was a mistake. Employers cannot retroactively change terms after you've performed your work. If you're facing this issue, NorCal Advocates is here to help. We are dedicated to fighting for employees to ensure they recover the compensation they’re owed.
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 A recent Ninth Circuit decision, Lui v. DeJoy, sheds important light on the oft-confusing application of the McDonnell Douglas burden-shifting framework in Title VII discrimination cases. In a significant clarification, the court reiterated that an employee can satisfy the fourth element of the prima facie case under McDonnell Douglas simply by showing that they were replaced by someone outside their protected class—dispelling the notion that they must also demonstrate that the replacement was "similarly situated."
It is important to note that while the Ninth Circuit refers to this as the "fourth element of McDonnell Douglas," this terminology can be misleading. The element in question is actually the fourth element of the prima facie case, which is itself only the first of three steps in the McDonnell Douglas burden-shifting analysis. This distinction is crucial to understanding the framework correctly. Background of the Case Dawn Lui, a Chinese-American woman and longtime USPS employee, was removed from her position as Postmaster in Shelton, Washington, and demoted to a lower-paid Postmaster role in Roy, Washington. She was replaced by a white male with less experience. Lui alleged that she was subjected to discrimination based on race, sex, and national origin and filed suit under Title VII. The district court granted summary judgment for USPS, concluding that Lui failed to establish a prima facie case under McDonnell Douglas because she had not shown that a "similarly situated" individual outside her protected class was treated more favorably. The Ninth Circuit reversed the district court’s ruling on this issue, criticizing the lower court’s reliance on an improperly truncated version of the McDonnell Douglas test. Clarifying the Fourth Element of the Prima Facie Case in McDonnell Douglas The McDonnell Douglas framework, established by the U.S. Supreme Court, is a three-part test used to determine whether an employer engaged in unlawful discrimination:
The prima facie case itself consists of four elements:
The district court, in granting summary judgment, relied on cases that required a plaintiff to show "similarly situated" employees were treated more favorably, ignoring precedent that also allows a plaintiff to meet the fourth element simply by demonstrating that their position was filled by someone outside their protected class. The Ninth Circuit’s Key Holdings The Ninth Circuit emphasized that the Supreme Court and previous Ninth Circuit cases have long recognized that an employee meets the fourth element of the prima facie case by showing either that they were replaced by someone outside their protected class or that similarly situated individuals outside their protected class were treated more favorably. The court clarified that the "similarly situated" requirement is an alternative means of proving discrimination, not an additional hurdle for employees who can already show that they were replaced by someone outside their protected class. This distinction is important, as the "similarly situated" analysis often presents unnecessary barriers for plaintiffs due to subjective employer practices and differing job responsibilities among employees. Implications for Employees and Employers The Ninth Circuit’s decision provides much-needed clarity and ensures that employees are not unfairly burdened by an overly restrictive interpretation of McDonnell Douglas. This ruling confirms:
If you believe you have been subjected to discrimination in the workplace, this case highlights the importance of consulting with an experienced employment attorney to assess your claims and protect your rights under Title VII.  Recently, Meta announced that it would be cutting ties with "low performers," a statement that was closely followed by a 5% reduction in its workforce. For many former employees, the implication was clear: If you were let go, you must have been underperforming. However, some of those affected are pushing back, claiming they were not low performers and that Meta’s framing of the layoffs has harmed their professional reputations.
This situation raises a critical question in employment law: When does an employer’s characterization of an employee’s termination cross the line into defamation? Understanding Defamation in the Workplace Defamation occurs when someone makes a false statement about another person that damages their reputation. In California, defamation can take two forms:
To establish a defamation claim, a former employee must generally show:
When Layoff Announcements Go Too Far Employers have the right to downsize, but they must be careful about how they frame layoffs. If Meta—or any other company—publicly states that terminations were based on performance, yet some of those affected had no history of poor reviews or performance issues, those employees might have a claim for defamation. For example:
The Real-World Consequences of Workplace Defamation Being labeled a “low performer” can have serious career consequences. In industries like tech, where networking and reputation are key, a false implication of underperformance can cost someone future job opportunities. Recruiters and hiring managers may hesitate to hire someone who was publicly linked to performance-based terminations. Damages May Be Presumed: Defamation Per Se in Employment Cases In California, defamation per se applies when false statements directly harm a person's professional reputation. If an employer falsely claims an employee was a poor performer or engaged in misconduct, the law may presume damages without requiring proof of actual harm. This is especially important in cases where someone may not have yet experienced damages or where damages may be difficult to prove, as companies will often not provide a reason for deciding not to hire someone. What Can Employees Do? If you suspect that your former employer has defamed you, consider the following steps:
Final Thoughts Layoffs are difficult enough without the added harm of a tarnished reputation. Employers should be mindful of how they communicate reductions in force, ensuring they do not misrepresent an employee’s performance. Employees who find themselves unfairly labeled have legal options to restore their professional standing. If you believe you have been defamed by your former employer, consider speaking with an attorney to explore your rights. In California, the law protects employees from reputational harm caused by false and damaging statements, and you may be entitled to legal recourse.  At NorCal Advocates, we understand that seeking help for alcohol or drug addiction is a deeply personal and often difficult decision. Many individuals struggling with substance use worry about how entering treatment will impact their job, leading them to delay or avoid getting the help they need. If this sounds like you, know that California and Federal law provides certain protections to help you seek the care you need while maintaining your employment.
Legal Protections for Employees Seeking Treatment California Labor Code § 1025 Under California Labor Code § 1025, private employers with 25 or more employees are legally required to provide reasonable accommodations for employees who voluntarily seek to enter and participate in an alcohol or drug rehabilitation program. This means that, in most cases, your employer must allow you to take a leave of absence or modify your schedule to receive treatment—so long as it does not create an undue hardship on the business. However, while the law protects your right to seek treatment, it explicitly does not shield employees from termination if they are unable to perform their job duties due to current alcohol or drug use. If an employer can demonstrate that your substance use is negatively impacting your performance, creating safety risks, or violating workplace policies, they may have grounds for termination. Related Laws Providing Additional Protections Even if your employer has fewer than 25 employees, you may still be entitled to time off for substance abuse treatment under various other laws including the California Fair Employment and Housing Act (FEHA), the Americans with Disabilities Act (ADA), the California Family Rights Act (CFRA), and the Family and Medical Leave Act (FMLA). While these laws generally do not protect employees who are disciplined or terminated because of misconduct or other issues arising from active addiction, those seeking treatment may be entitled to time off provided certain conditions are met. Health Coverage for Alcohol and Drug Treatment Financial concerns should not stand in the way of getting help. California Health & Safety Code § 1367.2 mandates that group health insurance plans covering hospital, medical, or surgical expenses must also provide coverage for the treatment of alcoholism. While coverage details vary by plan, many policies include inpatient and outpatient treatment services. If you’re considering treatment, check with your health insurer to understand what services are covered and what costs you may be responsible for. Workplace Rules and Employer Rights While California law encourages recovery, it also allows employers to enforce workplace rules related to substance use. This means that:
Confidentiality Protections Your employer must make reasonable efforts to keep private the fact that you have enrolled in an alcohol or drug rehabilitation program. Under California Labor Code § 1026, employers cannot disclose an employee’s participation in such a program. Additionally, the Health Insurance Portability and Accountability Act (HIPAA) prohibits employers from disclosing protected health information related to leaves of absence for alcohol or drug rehabilitation programs. Will You Be Paid While on Leave? Employers are not required to provide paid time off for employees attending an alcohol or drug treatment program. However, in some cases employees may:
Taking the First Step If you are struggling with alcohol or drug addiction and worried about your job, here are some steps to take:
You Are Not Alone Substance addiction is a medical condition, not a personal failure. Seeking help is a courageous step toward recovery, and California and Federal law recognizes the importance of treatment by providing employees with legal protections. If you have questions about how to balance work and recovery, NorCal Advocates is here to help. Contact us today for a free confidential consultation. Appreciating the People Behind the Policies: A Reflection on Leave Laws and Workplace Support2/1/2025  At NorCal Advocates, we pride ourselves on championing the rights of employees and consumers, but with this post, we want to acknowledge something that often goes unspoken: the value of the people and policies that support families during life’s most critical moments.
Our co-founder, Connor Olson, recently shared a personal milestone: becoming a father to twin girls. While the joy of welcoming new life is unparalleled, it also served as a poignant reminder of the importance of leave laws and workplace support systems. For Connor, the ability to step away from work and be fully present for his family was a gift—one that not all employees have the chance to experience. As employment attorneys, we’ve seen firsthand what happens when businesses fail to comply with family leave laws. We’ve represented workers forced to choose between their jobs and their families, and we’ve held employers accountable for failing to meet their obligations. But we’ve also witnessed what it looks like when workplaces get it right: businesses that not only meet the legal standard but go above and beyond to foster a culture of support. These moments of support don’t just happen because a law exists; they happen because of the people behind the policies. The colleagues who pick up the slack when a teammate is on leave. The managers who recognize that family comes first. The employers who see the long-term value in treating their workers with dignity and compassion. California has some of the strongest parental leave protections in the nation, ensuring that employees can take the time they need to care for their families without fear of losing their jobs or financial stability. The California Family Rights Act (CFRA) grants eligible employees up to 12 weeks of unpaid, job-protected leave within a 12-month period for the birth, adoption, or foster placement of a new child, or to care for a seriously ill family member or their own serious health condition. (Gov. Code § 12945.2.) In addition to job protection, the Paid Family Leave (PFL) program offers up to eight weeks of partial wage replacement benefits to employees who take time off to care for a new child or a seriously ill family member. This program, administered through the Employment Development Department (EDD), helps families stay afloat financially while prioritizing their loved ones. (Unemp. Ins. Code § 3300.) Beyond statewide protections, some local governments go even further. Take, for example, San Francisco’s Paid Parental Leave Ordinance (PPLO), which requires employers with 20 or more employees in San Francisco to supplement the state's PFL benefits so that employees receive up to 100% of their normal wages for up to eight weeks. This ordinance demonstrates how cities can enact their own laws to further support working families. (SF Admin. Code Ch. 12W.) We want to take a moment to say thank you—to the companies doing the right thing and the individuals who make it possible. Your efforts create a ripple effect, fostering loyalty, productivity, and trust. And more than that, you’re shaping a world where workers don’t have to choose between their careers and their families. To the employees navigating this balance, know that your rights matter, and we’re here to ensure they’re upheld. To the employers making it work, know that your support doesn’t go unnoticed. Together, we can build a workplace culture where everyone thrives. If you believe your employer is not honoring your parental leave rights, NorCal Advocates is here to help. We are dedicated to ensuring that every worker receives the protections they deserve, so they can focus on what matters most—family.  "Given the nature of this business and the trust that individuals place in the business for the safekeeping of their belongings, this theft is a major failing." The Arbitrator in this matter did not mince words when he found U-Haul liable for stealing and destroying nearly $30,000 worth of its customer’s personal belongings, awarding the customer over $200,000 in damages and attorneys’ fees. Although every penny was owed, this award marks a significant victory for consumers everywhere and lets corporations know that they can’t rely on a team of highly paid attorneys and one-sided contracts to escape liability for their intentional acts. The FactsIn 2019, the customer in this case, Jennifer Viergutz, rented a storage unit at U-Haul's Vacaville location, expecting her valuables—including antiques, family keepsakes, and furniture—would be stored safely while she worked toward her dream of owning her own home. For over three years, she paid rent on time and trusted U-Haul with her most cherished possessions. But when Jennifer finally bought her home and planned to move her belongings, U-Haul shattered that dream. Instead of a joyous transition into her new home, Jennifer found herself locked in a nearly two-year legal battle to recover the value of her stolen property and the emotional distress it caused her. The Theft On September 15, 2022, Jennifer gave notice to U-Haul that she would be vacating her unit by the end of the month. But just a week later, U-Haul emptied the unit, threw away her possessions, and allowed its employees to take whatever they liked. The justification? An absurd claim that Jennifer had "abandoned" the unit. U-Haul, of course, denied that any items were actually stolen by its employees. But this defense rang “hollow” in the face of conveniently missing evidence and conflicting and unbelievable employee testimony. U-Haul's Failed Defense When Jennifer sought justice, U-Haul had the audacity to claim that it simply made a mistake and argue that its liability was limited due to provisions buried in the rental agreement. U-Haul in fact claimed that Jennifer had herself violated the terms by storing items valued over $15,000, and that certain types of valuables and sentimental items she stored were “prohibited.” U-Haul tried to use these arguments and the threat of a Section 998 Offer to Compromise to bully Jennifer into taking just a fraction of what she was ultimately awarded. But Jennifer stood tall, and the Arbitrator wasn’t fooled. Through time records and cross-examination, Jennifer was able to prove that the manager intentionally cut the lock and cleared out the unit. In the Arbitrator’s own words, the manager’s actions “were willful, deliberate and intentional and were not a mistake or some sort of mistake.” And when pressed to explain the missing items, U-Haul couldn’t produce key evidence, including surveillance footage and emails. Under the weight of conflicting and unbelievable testimony, the entire defense crumbled and the Arbitrator found that U-Haul was trying to cover its tracks. The Ruling: Treble Damages and More The Arbitrator ruled that U-Haul committed “a significant theft,” thereby invalidating their contract defenses. Under California law, no company can use a contract to shield itself from liability for intentional misconduct. Citing California Penal Code section 496, the Arbitrator awarded Jennifer treble damages—triple the amount of her property’s value—along with compensation for emotional distress and legal fees, totaling more than $200,000. ConclusionThis case serves as a powerful reminder for billion-dollar corporations, like U-Haul, that they can’t hide behind high-priced attorneys and the fine print in their contracts to escape liability.
NorCal Advocates was honored to fight for Jennifer and, with her permission, to share her story. A copy of the Arbitrator’s ruling can be found HERE. |
AuthorThis blog is authored and maintained by NorCal Advocates' attorneys: 
Brittany V. Berzin
Connor W. Olson
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