658 F.3d 675 (7th Cir. 2011), 09-4111, Carroll v. Stryker Corp.

Docket Nº:09-4111.
Citation:658 F.3d 675
Opinion Judge:SYKES, Circuit Judge.
Party Name:Matthew CARROLL, Plaintiff-Appellant, v. STRYKER CORPORATION, Defendant-Appellee.
Attorney:Allen Steven Porter (argued), Attorney, Madison, WI, for Plaintiff-Appellant. Craig H. Lubben (argued), Attorney, Miller Johnson, Kalamazoo, MI, for Defendant-Appellee.
Judge Panel:Before MANION, EVANS,[*] and SYKES, Circuit Judges.
Case Date:September 06, 2011
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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658 F.3d 675 (7th Cir. 2011)

Matthew CARROLL, Plaintiff-Appellant,


STRYKER CORPORATION, Defendant-Appellee.

No. 09-4111.

United States Court of Appeals, Seventh Circuit.

September 6, 2011

Argued June 3, 2010.

Rehearing Denied Oct. 3, 2011.

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[Copyrighted Material Omitted]

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Allen Steven Porter (argued), Attorney, Madison, WI, for Plaintiff-Appellant.

Craig H. Lubben (argued), Attorney, Miller Johnson, Kalamazoo, MI, for Defendant-Appellee.

Before MANION, EVANS,[*] and SYKES, Circuit Judges.

SYKES, Circuit Judge.

Matthew Carroll was a commissioned sales representative assigned to solicit orders in Wisconsin for Stryker Corporation (" Stryker" ), a medical-instrument manufacturer based in Michigan. Stryker terminated Carroll's employment in 2008 because he failed to meet his quarterly sales quota. When Stryker refused to pay him a commission he felt he was rightfully owed, Carroll sued Stryker in state court for unpaid wages under Wisconsin's wage-claim statute and alternatively sought recovery under equitable contract doctrines. Stryker removed the action to federal

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court and later moved for summary judgment, arguing that Carroll was barred from pursuing a statutory wage claim because he worked on commission, and also that equitable contract relief was unavailable because Carroll's compensation was the subject of an express contract.

Carroll responded by voluntarily dismissing his statutory claim and seeking leave to amend his complaint to add a cause of action for breach of contract. The district court entered summary judgment for Stryker, agreeing that Carroll could not recover under any equitable contract doctrine. The court also denied Carroll's motion for leave to amend because the deadline for amending the pleadings had long since passed and no reasonable cause had been shown for the undue delay. Carroll appealed.

At oral argument we noted a possible jurisdictional issue regarding the amount in controversy. We ordered supplemental briefing and now conclude that the damages Carroll seeks exceed the $75,000 threshold for diversity jurisdiction. See 28 U.S.C. § 1332(a). On the merits, we affirm. Although Carroll was an at-will employee, his commission-based compensation was the subject of an express contract, which under Wisconsin law precludes quasi-contractual relief. The district court did not abuse its discretion in denying leave to amend the complaint because Carroll's motion came unjustifiably late in the litigation, many months after the deadline for amending the pleadings had passed.

I. Background

In January 2003 Stryker offered Carroll a position as a marketing associate. At that time Carroll signed an employment application reflecting that he was a " terminable-at-will employee" and could be " terminated with or without cause and with or without notice, at any time, at the option of either the company or [himself]." Carroll also signed a confidentiality agreement and an acknowledgment that he had received a copy of Stryker's employee handbook. The receipt stated in part:

I understand that any previous contracts, policies, or representations relating to my employment are no longer in effect and have been replaced by the Handbook. I understand that the purpose of the Handbook is to inform me of the Company's policies and rules and that no one is authorized to make changes in the terms of this Handbook, except through written revision authorized by Stryker Leibinger's General Manager. Stryker Leibinger may add, change, or rescind any of the policies, benefits, or practices listed, with or without advance notice, at the discretion of management.

Except for the paragraph below [dealing with a six-month limitation on lawsuits after termination], I understand that nothing contained in the Handbook constitutes an employment contract between the Company and me. I understand that my employment can be terminated with or without cause and with or without notice by the Company or by me.

In 2005 Stryker promoted Carroll to commissioned sales representative and in 2006 assigned him to a territory in Wisconsin. Every year Stryker sent a written compensation plan to its commission-based sales staff outlining the company's commission structure. As relevant here, the 2008 compensation plan provided that for the first six months of employment, a commissioned sales representative would receive a monthly draw of $6,000, with commissions paid on a varying percentage basis (depending on applicable discounts) for orders above the draw. Starting at month seven, if a sales representative's commissions did

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not cover the monthly draw, then the representative would incur a " draw deficit" recoverable by Stryker. The compensation plan also included bonuses for meeting or exceeding sales quotas. The company expressly reserved the right to change the commission compensation plan at any time.

In 2006 and 2007, Carroll's sales totaled less than half of his quota. As a result, for the 2008 calendar year, Stryker placed Carroll on a " performance improvement plan" that required him to meet his year-to-date sales quotas each quarter or face termination. On March 31— the last day of the first quarter of 2008— Carroll's sales were still under his quarterly quota, but he had a sale in progress with Aurora Health Care (" Aurora" ) that might allow him to meet his quota and save his job. That day Carroll emailed an Aurora purchase order to his supervisor in the amount of $299,008.13. Stryker did not accept this order, however. Aurora had proposed substantial modifications to Stryker's standard terms and conditions, most of which were unacceptable to Stryker. In particular, Aurora demanded 120 days to pay, while Stryker normally required payment to be made within 30 days. Also, Stryker's finance department had advised Aurora that it would have to sign a financing agreement to obtain financing for the order. When presented with this requirement, Aurora refused. Stryker offered a compromise, but Aurora balked again. In the meantime Carroll's supervisor extended his deadline for making his quarterly quota from March 31 to April 1. When it became clear that Aurora would not complete the transaction on terms that were acceptable to Stryker, Stryker informed Carroll that he had not met his quota as required by his performance improvement plan. His employment was terminated on April 2.

After his termination Carroll asked Stryker to treat the Aurora deal as a " contingent order" — a term for an unofficial order that would likely be finalized on a timely basis— so that he...

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