Overview
On January 12, 2012, FDAzar, in conjunction with several other class action firms, filed a class action lawsuit against HP Inc. and Hewlett Packard Enterprise (“HP”), entitled Jeffrey Wall, etc. v. HP, Inc., formerly known as Hewlett-Packard Company, et al., Case No. 30-2012-00537897, pending in the Superior Court of California, County of Orange. The lawsuit alleged that HP failed to pay incentive compensation and commission payments owed to its California sales employees within the timeframes proscribed by California law (Labor Code §§ 201, 202 and 204).
In 2017, FDAzar obtained a settlement of $25 million for class participants and changed the way HP pays incentive compensation and commission payments.
Nature of Claims Against Defendants
HP’s sales employees sell products and services directly to end-users and indirectly through third-party distributors. Under HP’s sales compensation system, sales employees are entitled to a commission on their sales, which are paid once per month at the end of the month. HP employs a complex network of computer systems to process sales data and calculate commissions.
During the Class Period, HP calculated commissions in the middle of each month, but when making these calculations, it only incorporated commissions on sales that occurred in the prior month or earlier. Consequently, it typically takes HP between 30 and 60 days to pay commissions after a sale has occurred. However, Plaintiff alleged that it often took longer than 60 days to pay commissions on a substantial portion of sales. Additionally, Plaintiff alleged that when employees leave the company (either due to termination or resignation), employees typically do not receive their final commission payment until more than 90 days after departure. Plaintiffs argued that these practices violated the California Labor Code provisions governing timely pay, including Labor Code §§ 201, 202, and 204.
HP employs a complex network of computer systems to process sales data and calculate commissions. During the Class Period, HP calculated commissions in the middle of each month, but when making these calculations, it only incorporated commissions on sales that occurred in the prior month or earlier.
In the fall of 2016, the Court certified a class consisting of all California sales representatives employed by HP who received monthly commissions as part of their sales compensation and whose employment ended at any time during the period January 17, 2009 through August 9, 2016. The Court also permitted Plaintiff to proceed as a PAGA proxy/agent on behalf of the California Labor and Workforce Development Agency and all HP California sales employees who received monthly commissions as part of their sales compensation during the period January 17, 2011 through the present.
Related Media
- HP and Hewlett Packard Enterprise will pay a $25 million settlement to salespeople who sued over messed up pay
- Meg Whitman’s company, HPE, has struggled to pay thousands of employees properly since its split from HP
- Hewlett Packard Enterprise has frustrated its salespeople with issues about their pay — again
- HPE apologizes for botching its sales staff commissions — again
