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Mistakes in Your Commission Agreement? Who Pays?

3/25/2025

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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:

  1. Binding Contract: If your employer communicated a commission structure and you performed according to that structure, you've created a binding contract. (DiGiacinto v. Ameriko-Omserv Corp. (1997) 59 Cal.App.4th 629; Mar v. Perkins (2024) 102 Cal.App.5th 201.)
  2. Promissory Estoppel: If your employer promised you a certain commission structure, and you reasonably and foreseeably relied on that commission structure, promissory estoppel will likely require that your employer honors its promise. (US Ecology, Inc. v. State of California (2005) 129 Cal.App.4th 887.)

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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Defamation and Layoffs: What Happens When Employers Tarnish Your Reputation?

2/13/2025

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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:

  • Libel: Written or printed false statements (including emails, internal memos, or public statements).
  • Slander: Spoken false statements.

To establish a defamation claim, a former employee must generally show:

  1. A False Statement – The employer made a factually incorrect statement about the employee.
  2. Publication – The statement was communicated to others.
  3. Harm to Reputation – The statement negatively impacted the employee’s career or standing.
  4. Negligence or Malice – The employer either failed to verify the truth of the statement or knowingly made a false statement.

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:

  • If an employer broadly categorizes layoffs as targeting "low performers" but includes employees with strong performance records, those employees could argue that the statement is false and damaging.
  • If a manager tells colleagues, recruiters, or industry peers that a terminated employee was a poor performer when that’s not true, this could constitute defamation.
  • If a manager falsely claims that the employee was terminated for violating company policy when no such violation occurred, this could also be considered defamation.
  • If the company makes internal statements that affect an employee’s future job prospects, those statements might also be actionable if they are not accurate.

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:
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  1. Document Everything – Keep records of any statements made about your termination, including emails, performance reviews, and internal communications.
  2. Request Corrections – In some cases, a demand letter requesting a correction can resolve the issue before litigation.
  3. Seek Legal Advice – Consulting with an employment attorney can help determine whether you have a viable defamation claim and what legal remedies are available.

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.
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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.
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Your Job and Your Health: Understanding Your Rights When Seeking Alcohol and Drug Treatment in California

2/3/2025

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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.
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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:
  • Employers may prohibit alcohol and drug use during work hours and on company property.
  • Employees currently under the influence at work may still be subject to termination.
  • While past substance addiction may qualify as a protected disability under FEHA and ADA, current substance use that impairs job performance does not provide the same level of protection.

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:
  • Use accrued sick leave to offset lost wages (California Labor Code § 1027).
  • Apply for State Disability Insurance (SDI) benefits, provided that their treatment was not court-ordered as an alternative to serving jail time.

Taking the First Step

If you are struggling with alcohol or drug addiction and worried about your job, here are some steps to take:
  • Review Your Employee Handbook & Company Policies – Understand your company’s stance on medical leave, substance use policies, and accommodations.
  • Consult Your Health Insurance Provider – Verify coverage for treatment services and determine available options.
  • Consider a Confidential Consultation with an Attorney – If you have questions about treatment or believe your employer is unfairly denying your right to seek treatment, legal guidance can help protect your job and your rights.
  • Speak with Your Employer (When Ready) – If you decide to enter treatment, it may help to have an open conversation with HR or your supervisor to discuss potential accommodations. But before doing so, it’s best to first talk with an attorney to understand your rights and determine what details are appropriate or necessary to disclose.

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.
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    Author

    This blog is authored and maintained by NorCal Advocates' attorneys:  

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    Brittany V. Berzin
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    Connor W. Olson
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