The deal closed after you left: when the commission is still yours

The default rule pays whoever caused the sale

Courts call it procuring cause. The Illinois formulation, repeated by the Seventh and Eighth Circuits, is that a party may be entitled to commissions on sales made after the termination of the contract if that party procured those sales through its activities prior to termination, notwithstanding the fact that the sale was consummated after termination. Other states phrase it differently and reach the same place: the agent who produced a ready, willing and able buyer has done the thing the commission pays for.

Two things about that rule are routinely misread. It is not a statutory right conferred on salespeople; it is what a court does with a contract that failed to address the question. And it is proved from activity, not from job title — who opened the account, who ran the demonstrations, whose relationship the buyer was responding to. A rep handed a deal already in procurement will struggle with it. A rep whose CRM shows a year of work on the account will not.

A clear written plan displaces the default

New York's highest court put the hierarchy plainly in Pachter v. Bernard Hodes Group (2008): in the absence of a governing written instrument, when a commission is "earned" and becomes a wage is regulated by the parties' express or implied agreement, and only where no agreement exists does the default common-law rule apply — the rule tying the commission to the employee's production of a ready, willing and able purchaser. The written instrument comes first. The common law is the fallback.

California shows what that means in practice. In American Software, Inc. v. Ali (1996) the employment contract ended the employee's right to commissions on payments received on her accounts 30 days after she left. She argued the clause was unconscionable. The Court of Appeal disagreed and enforced it: the terms were not hidden, the bargain was not one-sided enough to shock the conscience, and a contract is judged at the moment it is made rather than by how it turned out.

Earned and payable are not the same word

This is the distinction that decides most real disputes, and it is worth being blunt about. A rule against forfeiting earned commissions is strong: California courts approach it by asking whether the employee has perfected the right to payment, and once wages are earned an employer cannot simply take them back. That protection does nothing at all if the commission was never earned in the first place.

A plan is free to set the earning event wherever it likes: the signature, the shipment, the invoice, the customer's cash landing in the account, the end of a cancellation window. A clause requiring you to be employed on the date the commission is paid works the same way. It is not a confiscation clause — it is a condition on earning, drafted so that nothing vests until the condition is met. That is exactly why it survives challenge more often than people expect, and why "but I did the work" is the argument that loses.

The practical test is grammatical. "Commissions are earned when the customer's payment is received" sets an event. "Commissions are paid in the month following the month in which they are earned" is only an administrative timetable and decides nothing about entitlement. Employers frequently rely on the second sentence as though it were the first.

Which date the plan names is the whole argument

The same salesperson, the same account, the same signature — and the answer swings on which of four dates one sentence happens to name. It is also why these disputes cluster in enterprise sales, where the gap between sourcing a deal and collecting on it is measured in quarters rather than days.

Some states bolt a statute on top of the plan

Many states have a sales-representative statute. Where one applies it changes the economics rather than the entitlement: it sets a deadline and attaches a penalty, often with fee-shifting, to missing it. The catch is who they cover. Most were written for manufacturers' representatives — independent contractors paid on commission — and exclude people on the payroll, who are sent to the ordinary wage statute instead.

What California's writing requirement actually buys you

Labor Code § 2751 does something no other rule here does: it makes the document compulsory. An employer engaging someone on commission for services rendered in California must put the contract in writing, must set forth the method by which the commissions are computed and paid, must give the employee a signed copy and must obtain a signed receipt for it. Where a contract expires and both sides carry on performing under it, its terms are presumed to remain in full force and effect until superseded or the employment ends.

Not everything variable counts. The section excludes short-term productivity bonuses paid to retail employees, temporary variable incentive payments that increase but do not decrease pay under the contract, and bonus and profit-sharing plans — unless the employer offered a fixed percentage of sales or profits as compensation for work.

What the section buys is evidential rather than financial. It does not make anything owed. It means an employer that never produced a written plan cannot later point to the condition it says was always in it, and that is the posture most of these arguments are fought in. The place to fix it is the employment contract or the offer letter, before the first deal rather than after the last.

What to take with you, and in what order to use it

Then work in order of cost. A dated written demand naming the deals and the clause settles more of these than anything else, because it forces someone to identify the sentence they are relying on. After that the route depends on your status: an employee goes to the state labour agency, alongside any final wages still outstanding; a rep engaged under an independent contractor agreement may have a sales-representative statute available, and the fee-shifting in those statutes is what makes a modest claim worth a lawyer's time. Watch the clock while you do it — a statutory commission claim and a breach-of-contract claim can run on very different limitation periods.

The document decides, so read it as though it will

Fairness has very little purchase in this area. Both turns of the rule run through the plan: the default is generous because the drafter said nothing, and the exception is harsh because the drafter said something precise. Nobody weighs how much of the deal was yours once a clear earning event is on the page.

Which makes the useful moment the one before you start, not the one after you resign. Employment at will means the employer chooses your last day, so a plan that conditions everything on being employed on a payment date hands it the timing as well as the terms. Ask for the earning event in writing, ask what happens to a sourced deal that closes after departure, and get both answers into the document while you still have something to trade for them.