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Minoia v. Kushner

365 N.J. Super. 304, 839 A.2d 90 (App. Div. 2004)

EMPLOYER-EMPLOYEE; WAGE PAYMENT LAW—Commissions payable under a legitimate integrated incentive and partnership agreement are not governed by the Wage Payment Law.

An employee sued his former employer for constructive and wrongful termination. The employer argued that the employee had signed a settlement agreement dealing with all claims, including commissions the employee claimed were due and owing. The employee argued that the settlement was void and unenforceable because, under the New Jersey Wage Payment Law, an employer may not withhold or reduce wages already earned, including commissions. Under that theory, the employee claimed that the settlement agreement, which included a reduced commission for certain transactions, violated the Wage Payment Law and was therefore unenforceable. The lower court disagreed and granted the employer’s motion for summary judgment. The Appellate Division affirmed, finding that this particular employee-employer relationship was not contemplated by the Wage Payment Law.

The employee had a partnership interest under an agreement that included various integrated incentive and partnership distribution packages. The settlement included a release from all the employer’s obligations, including the partnership obligations. It was a complex and integrated settlement of all issues and the Wage Payment Law was not an impediment to the settlement. The Court also noted that the agreement was neither signed under duress nor unconscionable. In particular, the Court rejected the employee’s economic duress claim, finding that his settling because of his severe cash flow problem was not economic duress. Economic duress occurs when one party has overwhelming bargaining power and uses its dominance against the other. The Court found that no economic duress existed because the settlement was negotiated at arms length over several weeks with each party represented by counsel.


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