New Mexico Law
Rosalie
1 Post
Can someone be terminated without grounds? Are they still entitled to their sales commisions if the commissions are to be received within that month of firing?
Comments
Technically, under NM law employment is "at will", so you do not have to have groungs to terminate an employee. However, there have been so many exceptions to the at will doctrine carved out in court decisions, you really should think through your motivation before terminating an employee. Basically, you cannot terminate an employee where there is in existence an implied contract not to terminate except for "just cause" or to follow certain procedures, such as progressive discipline, before terminating. An implied contract may be created where the employer by its conduct has led employees to reasonably believe that such conditions must be satisfied. Most often, it is argued that such cercimstances are created by statements in employee handbooks or by statements made by supervisors or managers. The other primary restriction is where the termination would violate "public policy". A termination will vi0late public policy if it is for doing something public policy would encouage, e.g.,reporting violations of a law, or for refusing to do something public policy would discourage,e.g.,refusing to give a false statement.The bottom line is that no employer discharges an employee for no reason at all. Just think through why you are imposing a discharge action and if you honestly can conclude you have good grounds, you are probably ok.
With regard to your second question, unless you have a written statement limiting the circumstances under which commissions will be paid on termination, which has been communicated to the employee, you will have to pay the employee earned commissions at the time of termination. Generally, a commisssion is "earned" if everything has occurred which would make the commission payable if he or she were an employee. For example, if commissions are not payable until the sale has been paid for, the former employee would not be entitled to payment until then.
I hope this answers your question.
Robert P Tinnin, Jr.
Hinkle, Hensley, Shanor & Martin, LLP
Editor, NM Employment Law Letter