Peabody v. Time Warner Cable: California Supreme Court Accepts Review of Commission Sales Exemption Question

In Peabody v. Time Warner Cable (discussed here), the Ninth Circuit Court of Appeals asked the California Supreme Court to decide whether an employer can average an employee’s commission payments over certain pay periods to satisfy the compensation requirements of California commission sales exemption.

Last week, the Supreme Court granted the Ninth Circuit's request. The Court has restated the issue on review as follows:

May an employer, consistent with California's compensation requirements, allocate an employee's commission payments to the pay periods for which they were earned?

Here are the facts: Susan Peabody worked for Time Warner Cable (TWC) as an account executive, working an average of 45 hours per week and earning salary plus commissions based on her monthly sales. TWC paid Ms. Peabody her salary biweekly and paid commissions monthly. In those pay periods that included a commission payment, TWC paid Ms. Peabody more than one and one-half times the minimum wage, so that she qualified for the commission sales exemption. In those pay periods that did not include a commission payment, TWC paid Ms. Peabody less than one and one-half times the minimum wage, so that she did not qualify for the commission sales exemption.

The Court's web page for Peabody (Case No. S204804) is here. I have added Peabody to our Watch List of pending cases.