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Hinkens v. CA, Inc.

United States District Court, N.D. Illinois, Eastern Division

May 21, 2018

PAUL HINKENS, Plaintiff,
v.
CA, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          John Robert Blakey United States District Judge

         Plaintiff Paul Hinkens sued his former employer, Defendant CA, Inc., alleging that Defendant breached their compensation agreement, unjustly enriched itself, and violated the Illinois Wage Payment and Collection Act (IWPCA) by failing to pay him a commission for a specific sale. Defendant moved for summary judgment. For the reasons explained below, this Court grants the motion.

         I. Background

         The facts come from Defendant's Local Rule 56.1 statement of facts [38] and Plaintiff's statement of additional facts [45].

         A. Plaintiff's Employment

         Defendant creates and sells computer software. [38] ¶ 2. Plaintiff started working for Defendant's sales team as an Account Director in August 2013. Id. ¶ 4. In that role, Plaintiff's responsibilities included ensuring client satisfaction and bringing in new clients or new contracts for existing clients. Id. Throughout his tenure, Plaintiff reported to Nona Schwabe, Senior Director of Sales. Id. ¶ 8. The parties agree that Plaintiff worked for Defendant as an at-will employee. Id. ¶ 11.

         Defendant paid Plaintiff an annual base salary, and also set individualized commission targets for Plaintiff through “incentive compensation schedules.” Id. ¶¶ 12, 14. Plaintiff's fiscal year 2017 schedule-which covered the period from April 1, 2016 through March 31, 2017-set a quota of $5.1 million in “new contract value” (NCV) that Plaintiff had to bring in, and a target commission level of $150, 000. Id. ¶ 18. The schedule explained that it “should be read in conjunction with the FY17 Incentive Compensation Plan, ” which contained “specific rules pertaining to the eligibility and the payment of commissions.” Id. ¶ 17. Likewise, the compensation plan instructed employees that their schedule “shall form part of this Plan and should be read in conjunction with it.” Id. ¶ 23.

         Plaintiff understood that he had to review the compensation plan thoroughly as part of his job. Id. He also understood and agreed that the compensation plan provided the rules governing how Defendant paid commissions to its sales team. Id. ¶ 24. Plaintiff electronically signed his acknowledgement of receipt of his fiscal year 2017 schedule in April 2016. Id. ¶ 21.

         Under the compensation plan, “continued employment at CA is a condition precedent to earning Commissions.” Id. ¶ 27; see also Id. ¶ 30 (“Participants will receive Quota Credit and Commissions for any other Metric for any eligible Transaction until the last day of employment.”). The plan states that Defendant does not consider commissions “earned and payable” until a sales transaction qualifies as “fully completed, ” meaning: (1) the client pays all amounts due for the first 12 months of its contract; (2) the client and Defendant satisfy all other requirements of their contract; and (3) Defendant audits the transaction. Id. ¶ 28. The plan provides one exception to the general rule that a transaction must be fully completed “prior to employment termination” for an employee to earn a commission: if the “only open condition” at the time of an employee's termination “is CA's receipt of payment from the Customer, ” then Defendant considers the commission “earned” if the customer fully pays within 90 days of the employee's termination. Id. ¶ 31.

         B. Ensono Transaction and Plaintiff's Termination

         Plaintiff's lawsuit concerns a transaction between Defendant and Ensono, an IT outsourcer. Id. ¶ 34. In November 2015, Plaintiff started working with a team of eight fellow sales employees-including Schwabe, his boss-to get Ensono to renew a specific contract with Defendant. Id. ¶ 37. The team originally hoped to close the transaction by March 31, 2016 (the last day of the 2016 fiscal year), but negotiations with Ensono had not yet concluded then. Id. ¶ 38.

         Around the same time that negotiations with Ensono started, Schwabe formally put Plaintiff on a 60-day performance improvement plan (PIP), set to expire on March 7, 2016. Id. ¶ 52. The PIP came as no surprise to Plaintiff after Schwabe gave him a rating of “Did Not Achieve Expected Results” on his March 2015 annual performance review. Id. ¶ 50. The PIP identified multiple performance issues, including that Plaintiff achieved only 7% of his NCV quota for fiscal year 2016. Id. ¶ 54. The PIP stated that Plaintiff could face termination if he failed to meet the PIP's requirements. Id. ¶ 53. Plaintiff and Schwabe met weekly to discuss Plaintiff's progress while on the PIP. Id. ¶ 57.

         Meanwhile, the Ensono negotiations continued. Id. ¶ 41. Schwabe met with Plaintiff in mid-April and extended his PIP for another 60 days, although she could have fired him at any time during those 60 days. Id. ¶ 59. In part, Schwabe extended Plaintiff's PIP because she hoped that the Ensono transaction would close within the extension period, allowing Plaintiff to earn a commission. Id. ¶ 60. After missing the March close, the Ensono team wanted to close by the end of April, but also missed that deadline. Id. As Plaintiff acknowledged at his deposition, his team had no certainty about when the transaction would close. Id. ¶ 44.

         In mid-May, Schwabe emailed Plaintiff to tell him that he needed to show “significant” improvement to successfully complete the extended PIP. Id. ¶ 64. She also told Plaintiff that she would not extend the PIP any further if he failed to satisfy its requirements. Id. The Ensono transaction still had not closed by the ...


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