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11th Circuit Update: Breach of Contract, Discrimination

Peter A. Wilson v. International Business Machines Corporation, No. 14-14977 (11th Cir. May 11, 2015)

Brief summary: Employer’s Adjustment of Commissions for a Significant Transaction Not Breach of Employment Contract 

In Wilson vs. IBM, former International Business Machines Corporation (IBM) employee Peter Wilson appeal the district court’s granting of summary judgment of his breach of contract claims against IBM. As background, Wilson was employed as a sales person with IBM, with a compensation including fixed salary and sales commission, governed by an Incentive Plan Letter (IPL). The IPL contained a clause permitting IBM sole discretion to adjust incentive payments, and terms allowing IBM’s “right to modify or cancel” the agreement at any time until payments were earned by Wilson under the plan terms.

Decision affirmed. In 2011, IBM entered into an agreement with Bank of America, wherein Wilson alleged he should receive approximately $800,000 under the terms. However, because the transaction was classified by IBM as a “significant transaction,” IBM was permitted a recalculation under the terms of the IPL, and Wilson was compensated approximately $470,000. Wilson brought a breach of contract claim for the difference in commission. The 11th Circuit examined the case under Georgia law, and affirmed the district court’s decision, recognizing that IBM did not breach the IPL. Specifically, the 11th Circuit pointed to IBM’s ability to adjust or modify the plan and incentive payments, and recognized that even though the terms were “very favorable” to IBM, they were the terms that Wilson accepted. Further, the 11th Circuit acknowledged IBM’s abilities to retroactivity modify the sales quota after the sales period closed and pursuant to the terms of the contract. In holding, the 11th Circuit recognized that the terms allowed IBM the ability to modify the plan at any time until the business results were complete – which includes the time IBM needs to access the impact of a significant transaction on an employee’s sale quota. Decision affirmed.

Bozorgmehr Pouyeh v. Bascom Palmer Eye Institute, et al., No. 14-13704 (11th Cir. 2015)

Brief summary: Former Employee’s Threadbare Allegations of Discrimination Not Sufficient to Sustain Motion to Dismiss

In Pouyeh v. Bascom Palmer Eye Institute, pro se, former employee Pouyeh appealed the district court’s dismissal of his claims pursuant to Iqbal and Twombly.

By background, Pouyeah is Iranian, and attended medical school in Iran. He held position as a volunteer research fellow with Bascom, but sought a position as an ophthalmology resident at Bascom. He applied for three years, from 2010-2012, and asserts he was qualified, but never received a position. In 2011, he filed a charge with the EEOC sounding in discrimination based on national origin. After his volunteer research position was terminated, he attended continuing medical education classes at Bascom and was detained by security guards and arrested for trespassing. The district court dismissed his claims. On appeal, the 11th Circuit recognized that Pouyeh abandoned many of his claims, by failing to address them. Regarding the discrimination claims, the 11th Circuit concluded they were properly dismissed as Pouyeh did not provide sufficient factual allegations to “suggest discrimination,” especially as his allegations that he was qualified were threadbare. Finally, the 11th Circuit concluded that Pouyah failed to show the standards for deciding motions to dismiss pursuant to Iqbal and Twombly were unconstitutional. Decision affirmed.

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* Cathleen Scott is licensed to practice in Florida only.

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