United States District Court, D. Maryland
RICHARD S. MARTIGNETTI, Plaintiff,
INTERNATIONAL BUSINESS MACHINES, INC. Defendant.
RICHARD D. BENNETT, UNITED STATES DISTRICT JUDGE
Richard S. Martignetti (“Plaintiff” or
“Martignetti”) alleges that his former employer,
Defendant International Business Machines Corporation
(“Defendant” or “IBM”), unlawfully
capped his commissions on sales of IBM products despite
IBM's representation that his commissions were
potentially limitless. Martignetti's Amended Complaint
(ECF No. 12) brings four counts, as follows: a claim arising
from the alleged violation of the Maryland Wage Payment and
Collection Law (“MWPCL”), Md. Code Ann., Lab.
& Empl. §§ 3-501, et seq. (Count I);
fraud (Count II); negligent misrepresentation (Count III);
and unjust enrichment (Count IV).
pending is Defendant IBM's Motion to Dismiss (ECF No.
14). The Incentive Plan Letter issued by IBM to Martignetti
indicates that IBM retained broad discretion to modify or
cancel commission payments for any individual. (Am. Compl.
Ex. B, ECF No. 12-3.) This disclaimer vitiates
Martignetti's claims under the MWPCL and the common law.
Accordingly, Defendant IBM's Motion to Dismiss (ECF No.
14) is GRANTED. This action is DISMISSED WITH PREJUDICE in
ruling on a motion to dismiss, the factual allegations in the
plaintiff's complaint must be accepted as true and those
facts must be construed in the light most favorable to the
plaintiff. Wikimedia Found. v. Nat'l Sec.
Agency, 857 F.3d 193, 208 (4th Cir. 2017) (citing
SD3, LLC v. Black & Decker (U.S.) Inc., 801 F.3d
412, 422 (4th Cir. 2015)). This Court may also consider
documents attached to a motion to dismiss so long as they are
“integral to the complaint and authentic.”
Thompson v. United States, RDB-15-2181, 2016 WL
2649931, at *2 n.4 (D. Md. May 10, 2016), aff'd
670 Fed.Appx. 781 (4th Cir. 2016) (citations omitted).
Martignetti worked for IBM between 2005 and June 2018 as a
commissioned salesperson and a sales manager. (Am. Compl.
¶ 7, ECF No. 12.) While employed at IBM, Martignetti
earned a base salary and additional incentive compensation in
the form of a commission or bonus. (Id. at ¶
8.) In this lawsuit, Martignetti alleges that IBM failed to
pay him in accordance with an incentive plan effective as of
January 1, 2017.
The Commission Plan.
January 2017, IBM assigned Martignetti to sell IBM's
“Software as a Service” (“SaaS”)
products and services. (Id. at ¶ 12.) For this
project, Martignetti managed and supported a team of seven
salespeople. (Id. at ¶ 13.) The commission
structure for SaaS sales were set forth in a six-month
commission plan effective January 1, 2017 (“the
Plan”). (Id. at ¶ 14.) The Plan was
described in a PowerPoint presentation titled “Your
2017 Incentive Plan.” (Am. Compl. Ex. A, ECF No. 12-2.)
PowerPoint detailed how commissions were to be made. Under
the Plan, Martignetti received commissions at a lower rate
until he sold enough products and services to meet an
assigned sales quota. (Id. at ¶ 15.) IBM
assigned Martignetti a sales quota of $5, 019, 158.00 and a
“Target Incentive” of $77, 878.00. (Id.
at ¶ 17.) For each 1% of the quota up to 100%,
Martignetti earned 1% of his Target Incentive. (Id.
at ¶ 18.) For each 1% of the quota between 100% and 200%
of the $5, 019, 158.00, he earned 3% of his Target Incentive.
(Id. at ¶ 19.) For each 1% of quota above 200%,
he earned 2% of his Target Incentive. (Id. at ¶
20.) For purposes of the plan, Martignetti fell into a
category of employees referred to as “Software Solution
sellers without dedicated XaaS element.” (Id.
at ¶ 24.) The PowerPoint slide describing the plan terms
applicable to this group indicated that “earnings
opportunity is uncapped.” (Id. at ¶¶
25-26.) In other words, Martignetti could earn a potentially
unlimited amount of commissions. (Id. at ¶ 26.)
connection with the commission plan, Martignetti was asked to
sign an Incentive Plan Letter (“IPL”) dated May
25, 2017. (Id. at ¶ 14; Am. Compl. Ex. B, ECF
No. 12-3.) The IPL contained a number of disclaimers which
reserved IBM's right to modify payments under the Plan,
modify the Plan terms, or cancel it entirely. These
provisions are set forth in the IPL as follows:
Right to Modify or Cancel: The Plan does not
constitute an express or implied contract or promise by IBM
to make any distributions under it. IBM reserves the right to
adjust the Plan terms, including, but not limited to, changes
to sales performance objectives, assigned territories or
account opportunities, applicable incentive payment rates or
similar earnings opportunities, or to modify or cancel the
Plan, for any individual or group of individuals, including
withdrawing your accepted Incentive Plan Letter if your
incentive eligibility status changes.
(Id. at ¶ 29.)
contained a provision which reserved IBM's right to
adjust incentive payments associated with certain
Review of a Specific Transaction: If a
specific customer transaction has a disproportionate effect
on an incentive payment when compared with the opportunity
anticipated during account planning and used for the setting
of sales objectives, or is disproportionate compared with
your performance contribution towards the transaction, IBM
reserves the right to review and, in its sole discretion,
adjust the incentive achievement and/or related payments.
(Id. at ¶ 32.)
provision made clear that IBM could adjust payments based on
its review for errors:
Adjustments for Errors: IBM reserves the
right to review and, in its sole discretion, adjust or
require repayment of incorrect incentive payments resulting
from incomplete incentives processes or other errors in the
measurement of achievement or the calculation of payments,
including errors in the creation or communication of sales
objectives. Depending on when an error is identified,
corrections may be made before or after the last day of the
full-Plan period, and before or after the affected payment
has been released.
(Id. at ¶ 31.)
the IPL explained when incentive payments are earned under
Earnings: Incentive payments you may receive
for Plan-to-Date achievement are a form of advance payment
based on incomplete business results. Your incentive payments
are earned under the Plan terms, and are no longer considered
Plan-to-Date advance payments, only after the measurement of
complete business results following the end of the full-Plan
period. (Or, if applicable, after the date you left the
Incentive Plan early.) Incentive payments will be considered
earned only if you have met all payment requirements,
including: (1) you have complied with the Incentive Plan; (2)
you have not engaged in any fraud, misrepresentation or other
inappropriate conduct relating to any of ...