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Fessler v. International Business Machines Corp.

United States District Court, E.D. Virginia, Alexandria Division

November 28, 2018

JUSTIN FESSLER, Plaintiff,
v.
INTERNATIONAL BUSINESS MACHINES CORPORATION, Defendant.

          MEMORANDUM OPINION

          T.S. EIIIS UNITED STATES DISTRICT JUDGE

         This is a dispute between plaintiff, Justin Fessler, and his former employer, defendant International Business Machines Corporation ("IBM"), over whether Fessler is owed additional commissions. Fessler contends that IBM was obligated to pay him uncapped commissions and failed to do so. For its part, IBM contends that it had no obligation to pay Fessler any additional commissions.

         For the reasons that follow, IBM's Motion to Dismiss must be granted.

         I.

         The Rule 12(b)(6) standard is too well-settled to warrant extensive discussion. In essence, on a threshold motion to dismiss, a court must determine whether the complaint contains "sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks and citation omitted).

         II.[1]

         Fessler began employment with IBM as a salesman in 2008. His compensation consisted of a base salary and commissions. During the period relevant to this dispute, Fessler had three commission plans. The first was in effect from January 1, 2016 through June 30, 2016, the second was in effect from January 1, 2017 through June 30, 2017 and the third was in effect from July 1, 2017 through December 21, 2017. Each plan was described in a written Incentive Plan Letter ("IPL") that Fessler accepted.[2] The IPL for each period described the terms of the commission plan offered to, and accepted by, Fessler. Each IPL contained a number of disclaimers that were, with one exception, essentially identical in relevant part. Specifically, each IPL contained a "Right to Modify or Cancel" disclaimer. In the first half of 2017, the IPL stipulated that

The Plan does not constitute an express or implied contract or a promise by IBM to make any distributions under it. IBM reserves the right to adjust the Plan terms, including, but not limited to, changes to sales performance objectives, assigned territories or account opportunities, applicable incentive payment rates or similar earnings opportunities, or to modify or cancel the Plan, for any individual or group of individuals, including withdrawing your accepted Incentive Plan Letter if your incentive eligibility status changes.

Def.'s Ex. 2. The IPLs for the first half of 2016 and second half of 2017 contained essentially identical disclaimers.[3] The IPLs also contained disclaimers about "Adjustments for Errors." Specifically, each IPL provided that

IBM reserves the right to review and, in its sole discretion, adjust or require repayment of incorrect incentive payments resulting from incomplete incentives processes or other errors in the measurement of achievement or the calculation of payments, including errors in the creation or communication of sales objectives. Depending on when an error is identified, corrections may be made before or after the last day of the full-Plan period, and before or after the affected payment has been released.

Def.'s Ex. 1-3. The IPLs also included a disclaimer providing for "Review of a Specific Transaction." The IPL for the first half of 2017 stipulated that

If a specific customer transaction has a disproportionate effect on an incentive payment when compared with the opportunity anticipated during account planning and used for the setting of sales objectives, or is disproportionate compared with your performance contribution towards the transaction, IBM reserves the right to review and, in its sole discretion, adjust the incentive achievement and/or related payments.

Def.'s Ex. 2. The IPLs for the first half of 2016 and second half of 2017 contained essentially identical provisions.

         For each plan period, both before and after Fessler accepted the applicable IPL, IBM provided Fessler with a PowerPoint presentation describing the terms of the commission plan he was offered and ultimately accepted. Each PowerPoint stated that "payments" and "earnings opportunities]" were "uncapped." IBM managers repeated these statements to Fessler during sales meetings.

         Fessler alleges that these oral and written statements obligated IBM to pay him uncapped commissions. Fessler further alleges that IBM failed to pay him the full commission he was owed on three separate deals. First, Fessler was paid $50, 000 rather than the $258, 200 he expected from a deal that closed in June 2016 with the United States Census Bureau. IBM explained that Fessler was credited with only a portion of the deal's revenue because of Fessler s contribution to the deal. Second, in May 2017, Fessler was paid about $30, 000 rather than the $100, 000 he expected on a deal with the Department of Defense Special Operations Command. IBM explained that the account had been put under a Target Account Absolute Plan, under which approximately 3.5% of sales revenue was allocated to commissions for all sales representatives involved in a sale of IBM products and services to the Department of Defense Special Operations Command. Third, Fessler closed a deal in December 2017 with the United States Customs and Border Protection Agency. Contrary to Fessler's expectations, Fessler did not receive a commission on the deal. After the deal closed, IBM explained that the account had been removed from Fessler's responsibility.

         III.

         At issue now is IBM's Motion to Dismiss Fessler's Complaint pursuant to Rule 12(b)(6), Fed.R.Civ.P. Fessler's Complaint asserts six claims: (i) breach of oral and/or implied contract, (ii) quantum meruit, (iii) unjust enrichment, (iv) fraudulent misrepresentation, (v) ...


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