Geysen v. Securitas Sec. Servs. USA, Inc.

• Decision Date: 09 August 2016
• Docket Number: No. 19545.,19545.
• Citation: 142 A.3d 227,322 Conn. 385
• Court: Connecticut Supreme Court
• Parties: Kevin GEYSEN v. SECURITAS SECURITY SERVICES USA, INC.

322 Conn. 385

142 A.3d 227

Kevin GEYSEN

v.SECURITAS SECURITY SERVICES USA, INC.

No. 19545.

Supreme Court of Connecticut.

Argued March 28, 2016.

Decided Aug. 9, 2016.

Daniel J. Krisch, with whom, on the brief were George D. Royster and Logan A. Forsey, Hartford, for the appellant-appellee (defendant).

Todd D. Steigman, Hartford, for the appellee-appellant (plaintiff).

ROGERS, C.J., and PALMER, ZARELLA, EVELEIGH, McDONALD, ESPINOSA and ROBINSON, Js.^*

ROGERS

, C.J.

This consolidated appeal¹ presents the question of whether an at-will employment agreement, providing that an employee's commissions will not be paid unless the employer has invoiced commissionable amounts to the client prior to the employee's termination, is contrary to public policy and a violation of

General Statutes (Supp.2016) § 31–72

.² The defendant, Securitas Security Services, USA, Inc., appeals from the stipulated judgment of the trial court in favor of the plaintiff, Kevin Geysen, on his wage statute claim and the trial court's underlying ruling holding that this commission provision was contrary to public policy. Additionally, the plaintiff cross appeals claiming, inter alia, that the trial court improperly granted the motion to strike counts two and three of the complaint alleging breach of the implied covenant of good faith and fair dealing and wrongful termination in violation of public policy, respectively. We agree with the defendant that the trial court improperly determined that the commission provision violated public policy and constituted a violation of § 31–72. With regard to the plaintiff's cross appeal, we hold that count two of the plaintiff's complaint alleging breach of the implied covenant of good faith and fair dealing should not have been stricken but that count three alleging wrongful discharge was properly stricken. Accordingly, we reverse in part the judgment of the trial court.³

The following procedural history and facts are relevant to this appeal. The defendant is a security services company that provides various protection services to industrial and commercial clients. These services are marketed through employees hired as business development managers (managers) who solicit new business from prospective and existing customers. In August, 2005, the defendant offered the plaintiff an at-will position as a manager. The defendant's offer letter, which the plaintiff signed in September, 2005, provided that the plaintiff's compensation was a weekly base salary and commissions on contracts he procured.⁴ The offer letter referenced and mirrored the defendant's 2003 sales incentive plan, which was in effect at the time the plaintiff commenced his employment.

The defendant subsequently amended its sales incentive plan effective December 23, 2006, and revised the commission provision at issue. Section II, part C of the 2006 sales incentive plan regarding sales eligibility requirements provides that “[c]ommission is only paid once work has been performed and invoiced to the client. Upon termination of services to the client all commissions cease, except that commission will be paid up through and including the final invoice. Upon the [manager's ] termination of employment, all commissions cease, except that any commissionable amounts that have been invoiced [to the client ] prior to the [manager's ] [t]ermination [d]ate, as defined in [s]ection IV.D, will still be paid commission as part of final pay to the [manager ].” (Emphasis added.)

From 2005 to 2008, the plaintiff worked as a manager, on behalf of the defendant, marketing new and supplemental security services to new and existing customers. Based on the applicable sales incentive plan, once the contract was executed and the sales eligibility requirements were satisfied, including invoicing to the client, the plaintiff was entitled to commission payments without having to perform any other work.

On May 22, 2008, Thomas R. Fagan, the defendant's regional vice president for human resources, hand delivered a memorandum to the plaintiff terminating his employment. The memorandum explained that the defendant had conducted an investigation into improper business activities that had resulted in significant risk exposure to the defendant and, as a result of the investigation findings, the defendant was terminating the plaintiff's employment effective May 22, 2008.

On August 18, 2009, the plaintiff filed a complaint alleging that the defendant violated § 31–72

, breached his employment contract by violating the implied covenant of good faith and fair dealing, and wrongfully discharged him in violation of public policy. The plaintiff alleged that the defendant's reasons for his termination “were false and a pretext for nonpayment of owed commissions.” The defendant moved to strike count two, alleging breach of the implied covenant of good faith and fair dealing, and count three, alleging wrongful discharge in violation of public policy. Relying on Burnham v. Karl & Gelb, P.C.,

252 Conn. 153, 745 A.2d 178 (2000), the trial court granted the defendant's motion to strike both counts because it believed the plaintiff had an adequate statutory remedy under § 31–72. See id., at 161–62, 745 A.2d 178 (holding that even if plaintiff's termination violated public policy embodied in statute, plaintiff's wrongful discharge claim would be precluded due to existence of statutory remedy under that statute) The trial court then rendered a partial judgment for the defendant on the two stricken counts.⁵

Before trial, the parties agreed that “the plaintiff's claim hinges on whether or not the language in the defendant's sales incentive plan, which provides that the right to commissions ceases upon the plaintiff's termination of employment, is enforceable.” Therefore, the trial court agreed to decide the enforceability question and, in order to facilitate the trial court's determination, the parties entered into a stipulation of facts dated March 1, 2012.⁶

The trial court determined that, because the plaintiff's right to commissions was not contingent upon his providing any further services to the defendant's customers, he had fully earned his commissions when his employment was terminated. Thus, the trial court found that since the provision in the sales incentive plan deprived him of those earned commissions, resulted in forfeiture of wages, and applied even to an employee who is terminated for no cause, the provision was unenforceable because it “violate[d] two public policies: the first, which strongly favors the payment of wages, and the second, which disfavors forfeitures.”

On October 16, 2014, the parties stipulated to a judgment in favor of the plaintiff for unpaid commissions pursuant to § 31–72

, but preserved their respective rights to appeal. The defendant appealed from the stipulated judgment and the plaintiff cross appealed. We now turn to the merits of those appeals.

I

We first address the defendant's claim that the commission provision was not void on public policy grounds and, therefore, the failure to pay the plaintiff's commissions was not a violation of § 31–72

. We begin by setting out the applicable standard of review and relevant legal principles. “Although it is well established that parties are free to contract for whatever terms on which they may agree ... it is equally well established that contracts that violate public policy are unenforceable.... [T]he question [of] whether a contract is against public policy is [a] question of law dependent on the circumstances of the particular case, over which an appellate court has unlimited review.” (Citations omitted; internal quotation marks omitted.) Hanks v. Powder Ridge Restaurant Corp., 276 Conn. 314, 326–27, 885 A.2d 734 (2005) ; Brown v. Soh, 280 Conn. 494, 501, 909 A.2d 43 (2006)

; see also State v. Lynch, 287 Conn. 464, 477, 948 A.2d 1026 (2008).

“There is a strong public policy in Connecticut favoring freedom of contract.... This freedom includes the right to contract for the assumption of known or unknown hazards and risks that may arise as a consequence of the execution of the contract. Accordingly, in private disputes, a court must enforce the contract as drafted by the parties and may not relieve a contracting party from anticipated or actual difficulties undertaken pursuant to the contract, unless the contract is voidable on grounds such as mistake, fraud or unconscionability.... If a contract violates public policy, this would be a ground to not enforce the contract.... A contract ... however, does not violate public policy just because the contract was made unwisely.... [C]ourts do not unmake bargains unwisely made. Absent other infirmities, bargains moved on calculated considerations, and whether provident or improvident, are entitled nevertheless to sanctions of the law.... Although parties might prefer to have the court decide the plain effect of their contract contrary to the agreement, it is not within its power to make a new and different agreement; contracts voluntarily and fairly made should be held valid and enforced in the courts.” (Citations omitted; emphasis omitted; footnote omitted; internal quotation marks omitted.) Schwartz v. Family Dental Group, P.C., 106 Conn.App. 765, 772–73, 943 A.2d 1122

, cert. denied, 288 Conn. 911, 954 A.2d 184 (2008), quoting Tallmadge Bros., Inc. v. Iroquois Gas Transmission System, L.P., 252 Conn. 479, 505–506, 746 A.2d 1277 (2000).

If the commission provision at issue acts to negate the wage statutes, however, the provision violates public policy. See Parente v. Pirozzoli, 87 Conn.App. 235, 246, 866 A.2d 629 (2005)

(“Generally, agreements contrary to public policy, that is those that negate laws enacted for the common good, are illegal and therefore unenforceable.... Agreements that are legal on their face, yet which are designed to evade statutory requirements, are routinely held unenforceable.” [Citation omitted; internal quotation marks omitted.] ). We must initially...