How Can an Employee Recover Unpaid Commissions in Virginia?
Recent amendments to the Virginia Wage Payment Act give a plaintiff the right to sue for unpaid commissions in Virginia. Under the Wage Payment Act as amended in 2020, workers now have the right to sue in court for unpaid wages, including performance-based bonuses and commissions. A prevailing plaintiff can recover any unpaid commissions, as well as liquidated damages (double damages for most violations and treble damages for knowing violations), prejudgment interest, and reasonable attorneys’ fees and costs. Employees may seek to recover unpaid commissions individually, jointly, or as a collective action. The statute of limitations is three years.
A worker who seeks to recover unpaid commissions in Virginia may also bring a claim under a theory of quantum meruit. A plaintiff may recover reasonable payment for services under a quantum meruit theory when two parties contracted for work to be done but did not agree on a definite price, and the defendant requested that the plaintiff perform services. The Virginia Supreme Court has held that a plaintiff may prevail on a quantum meruit theory when “(1) the parties contract[ed] for work to be done, but the parties did not agree on a price, (2) the compensation mentioned [wa]s too indefinite, (3) there [wa]s a misunderstanding as to the price to be paid, or, (4) in some instances, the contract [wa]s void and of no effect.” T. Musgrove Constr. Co., 2020 WL 1799186, at *3 (citing Marine Dev. Corp. v. Rodak, 300 S.E.2d 763 (Va. 1983)).
A worker may recover unpaid commissions in Virginia on a quantum meruit theory where the parties did not enter into a binding agreement regarding compensation. This may occur where there was no “meeting of the minds” as to how much the plaintiff would be compensated. Where a worker and the hiring party did not agree on the exact commission amount the worker would receive, the worker may try to recover those commissions under quantum meruit.
In Fessler v. IBM Corp., 959 F.3d 146 (4th Cir. 2020), the Fourth Circuit held that where there was not a “meeting of the minds” between the two parties on how much the plaintiff would receive in commissions, and the plaintiff and defendant IBM did not enter into a binding contract regarding payment, the plaintiff was permitted to recover reasonable payment for services under a quantum meruit theory. The court held that the plaintiff presented sufficient facts to prove he performed work for IBM but did not receive adequate compensation for that work and that although there was no enforceable agreement for the plaintiff to receive additional commissions, IBM had not paid him reasonable commissions on sales he had made. Because of these facts, the court held the plaintiff had stated a claim for quantum meruit and could recover unpaid commissions under this theory. Under quantum meruit, a plaintiff may recover reasonable value for services performed.
Therefore, an employee in Virginia may sue their employer for unpaid commissions on a statutory theory under the Virginia Wage Payment Act and/or under a common law theory of quantum meruit.