Abrishamcar v. Oracle America, Inc.

Former Oracle sales representatives sued the company over its incentive compensation practices, alleging that Oracle routinely:

• Delayed issuing compensation plans and back-dated the plans;
• Re-planned sales representatives and back-dated re-plans that increase quotas, reduce commission rates, and reduce payouts;
• Delayed paying commissions for 45 days or longer after they are earned;
• Relied on vague or secret criteria and processes to reduce commissions;
• Clawed back commissions months or years after they were earned and paid;
• Used the threat of collections to recoup commissions already paid out.

In the current “Penalties” phase of litigation, Plaintiffs and Oracle have teed up certain legal questions affecting the amount of PAGA penalties that Oracle will face. On June 13, 2022, the Court issued two significant rulings that endorsed Plaintiffs’ legal positions:

• The Court held that civil penalties under PAGA are available on a per pay period basis for every employee per pay period who was not provided a signed written commission contract.
• The Court rejected Oracle’s argument that “subsequent” level PAGA civil penalties – a higher dollar level of per-pay-period penalties– cannot be levied unless Plaintiffs prove that a court or the Labor Commissioner previously found that Oracle committed the same Labor Code violations. The Court held that the treshold question for exposure to “subsequent” (higher) penalties is, at most, whether the employer had notice that is conduct was in violation of the Labor Code.