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Sales commission agreement can allow deductions for "unidentified" returns

     A group of sales employees who challenged the way their department store employer calculated their commissions recently received some disappointing news from Connecticut's Supreme Court. The disputed commission agreement provided that a pro rata share of the cost of unidentified returns - goods returned without a sales receipt and hence without any means of identifying the person who made the sale - would be deducted from each employee's commission. 

     In their lawsuit the employees claimed that this formula violated the state's wage and hour laws because the deduction for unidentified returns bore no relationship to their job performance. They also claimed that the deduction was an improper attempt on the part of the store to place on the employees the burden of the cost of doing business. But the high court disagreed with these arguments, noting that Connecticut law for the most part leaves the determination of when and how wages will be paid to employer-employee agreement and that each employee had specifically signed off on the commission agreement at the time of hire. (Editor's note: CBIA filed an amicus brief in this case on behalf of the employer.)