Carmel, IN asked in Business Law and Contracts for Indiana

Q: Does a non-punitive reduction in sales commission invalidate a non-compete agreement?

Hiring offer included base salary plus sales commission for working at a retail store. After one year I was asked to assume all the same duties for two stores. Employer reduced my total commission at each store because "it gives you a disproportionate amount of total commission". My commission is below that of other employees at the same capacity at single store assignments.

Does this potentially invalidate the non-compete agreement that I signed?

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1 Lawyer Answer
Bruce Alexander Minnick
Bruce Alexander Minnick
Answered

A: Without seeing your entire employment contract I would think not; however, both the rate of pay and the amount of commission should be included--and is so, this change has violated the contract. So, if you still want to work there I advise you to object to the lowering of your remuneration and raise the issue of possibly voiding the non-compete.

Your argument should be that had the company told you when you were being hired that they were going to change the amount of pay or commission, you certainly would not have agreed to the non-compete clause. And since they violated the employment agreement, they cannot rely on or enforce any other clause. It might just work.

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