Date: 06-25-2018

Case Style:

Case Number: 17-1855

Judge: Hamilton

Court: United States Court of Appeals for the Seventh Circuit on appeal from the Northern District of Illinois (Cook County)

Plaintiff's Attorney: Wayne Giampietro

Defendant's Attorney: Jody A. Boquist, Mellisa Lynn McDonagh

Description: Plaintiff Daryl Sutula‐Johnson
sued her former employer, alleging that its changes to her
compensation for selling office furniture breached its contract
with her and violated the Illinois Wage Payment and Collection
Act. The district court granted summary judgment for the
employer. We affirm summary judgment for the employer on
2 No. 17‐1855
the claims for breach of contract but reverse as to the statutory
claims.
I. Factual & Procedural Background
We start by summarizing the changes in Sutula‐Johnson’s
compensation and then the procedural course of this lawsuit.
Because we are reviewing a grant of summary judgment for
the defendant‐employer, we consider facts that are undisputed
and give the plaintiff the benefit of conflicts in the evidence.
A. The OfficeMax Plan
Plaintiff Sutula‐Johnson began selling office furniture
more than a decade ago. She started with Boise Cascade,
which then merged with OfficeMax. In 2010, OfficeMax
adopted a written compensation plan that covered its furniture
sales group, including Sutula‐Johnson. Under that plan,
OfficeMax paid furniture account executives, including plaintiff,
entirely in commissions. OfficeMax paid commissions at
a rate of either 27% or 20% of each sale, depending on the
sale’s profit. The general policy was that commissions were
earned either when a customer paid or 90 days after the customer
was invoiced, whichever came first. Sutula‐Johnson,
however, had negotiated better terms for herself. She earned
commissions upon invoicing.
OfficeMax paid commissions on a monthly basis in the
second or third paycheck of the month after the commission
was earned. Sutula‐Johnson received commissions according
to these terms throughout her employment with OfficeMax.
No. 17‐1855 3
B. The New Office Depot Plan
OfficeMax and Office Depot merged in November 2013
and continued business under the name Office Depot. At first,
Office Depot continued to pay Sutula‐Johnson and her Office‐
Max colleagues under the terms of the old OfficeMax plan.
Then on July 14, 2014, Office Depot announced that it was
adopting a new compensation plan that would apply to all
furniture account executives effective immediately.
Office Depot did not roll out the new plan smoothly. The
July 14 announcement contained a PowerPoint presentation
explaining the new compensation structure. Within a week,
Sutula‐Johnson received a copy of the PowerPoint presentation
but not a copy of the plan itself. Sutula‐Johnson—who
kept notes of the roll‐out and her talks with Office Depot managers—
asserts that employees received an email a month and
a half later saying that the new plan was available for viewing
online. In reality, she testified, the plan was not available at
that time. Sutula‐Johnson did not receive a copy of the new
plan until September 26, 2014, and her notes said that the plan
was not yet accessible nationwide.
The new plan significantly changed how Sutula‐Johnson
was paid and reduced her total pay. For the first time, Sutula‐
Johnson received a combination of salary and what Office Depot
called “incentive payments.” The incentive payments
were paid quarterly and with lower rates than the OfficeMax
commissions: 13.5% or 10% instead of 27% or 20%. Office Depot
set a quarterly sales target for each employee and paid
13.5% or 10% of all sales as “incentive payments,” depending
on whether the employee exceeded the quarterly sales target.
4 No. 17‐1855
The new Office Depot plan also changed when and how
Sutula‐Johnson earned and received her commissions. Instead
of earning commissions upon customer invoicing, the
plan said that she “accrued” the incentive payments upon invoicing
but did not “earn” them until the day Office Depot
actually paid them to her. Under the new plan, an employee
who left the company lost any claim on incentive payments
not yet actually paid to her. According to Office Depot, any
interest the employee had in the incentive pay was not
“earned or vested until payment date.” According to Sutula‐
Johnson, Office Depot usually paid the quarterly incentive
payments 45 days after the end of each calendar quarter.
C. Sutula‐Johnson’s Objections
Sutula‐Johnson had earned substantial commissions under
the OfficeMax plan. She quickly figured out that the new
Office Depot plan would reduce her pay significantly. She immediately
objected to the new plan. She initially refused to
sign it and complained to management about what was, in
her view, an unfair pay reduction, especially as applied to
sales already in the works but not yet invoiced. Office Depot
management said the new plan would still apply to her.
Despite her objections, Sutula‐Johnson continued working
for Office Depot for more than another year. In early 2015, Office
Depot issued a new written version of the plan with the
same key terms and insisted that Sutula‐Johnson sign it. She
signed a form acknowledging the plan in March 2015. Later
that month she filed this suit while still working for Office Depot.
She resigned in December 2015.
No. 17‐1855 5
D. Procedural Background
Sutula‐Johnson sued Office Depot in federal court, invoking
diversity jurisdiction under 28 U.S.C. § 1332(a)(1). Her
complaint alleged breach of contract, unjust enrichment, and
violations of the Illinois Wage Payment and Collection Act,
820 Ill. Comp. Stat. 115/1 et seq. (the “Illinois Wage Act”). She
claimed that Office Depot breached its contract with her by
paying her under the new compensation plan before March 2,
2015, when she signed the acknowledgment form. She also
asserted that the “incentive payments” were commissions under
the Illinois Wage Act and that Office Depot violated the
Act by paying the commissions quarterly rather than
monthly. On appeal she has dropped her claim for unjust enrichment.
After resigning, Sutula‐Johnson amended her complaint
to add claims that Office Depot had breached her contract and
violated the Illinois Wage Act when it refused to pay her incentive
payments on all sales that were invoiced before she
left. Both parties moved for summary judgment. The district
court denied Sutula‐Johnson’s motion for summary judgment
and granted Office Depot’s on all counts. Sutula‐Johnson v. Office
Depot, Inc., 2017 WL 1333141 (N.D. Ill. April 11, 2017).
II. Analysis
We review de novo the district court’s grant of summary
judgment, while construing all facts and drawing all reasonable
inferences in favor of Sutula‐Johnson. Roberts v. Columbia
College Chicago, 821 F.3d 855, 861 (7th Cir. 2016). Illinois law
governs all claims. Under Erie Railroad Co. v. Tompkins, 304
U.S. 64 (1938), our role is to decide questions of state law as
we predict the Illinois Supreme Court would decide them.
6 No. 17‐1855
E.g., Anicich v. Home Depot U.S.A., Inc., 852 F.3d 643, 648 (7th
Cir. 2017).
A. Breach of Contract
In her claim for breach of contract, Sutula‐Johnson contends
that Office Depot did not effectively amend its employment
contract with her until she signed a written acknowledgment
form on March 2, 2015. She makes two arguments to
support her claim: (1) that before that date, any amendment
to her contract was without consideration; and (2) that she did
not accept the new terms until she signed them. In her view,
a new contract was not formed until March 2, 2015, and Office
Depot breached her previous contract by failing to comply
with the old OfficeMax plan through that date. In the alternative,
she argues that Office Depot breached her contract by
retroactively reducing her commissions. We reject these arguments
and affirm summary judgment for Office Depot on the
claims for breach of contract.
1. Consideration
Sutula‐Johnson is correct that in Illinois an employer’s policy
can create contractual rights that the employer cannot
amend unilaterally without consideration. Doyle v. Holy Cross
Hosp., 708 N.E.2d 1140, 1142 (Ill. 1999). If a binding policy exists,
consideration “is not supplied simply by the employee’s
continued work.” Id. at 1145. The threshold question, though,
is whether there was a binding contractual term to start with.
In Illinois, an employer’s policy creates contractual rights
only when: (1) it contains “a promise clear enough that an employee
would reasonably believe that an offer has been
made;” (2) the employer disseminates the policy “to the emNo.
17‐1855 7
ployee in such a manner that the employee is aware of its contents
and reasonably believes it to be an offer;” and (3) the
employee accepts “the offer by commencing or continuing to
work after learning of the policy.” Duldulao v. St. Mary of Nazareth
Hospital Ctr., 505 N.E.2d 314, 318 (Ill. 1987); see also Moore
v. Illinois Bell Telephone Co., 508 N.E.2d 519, 520–21 (Ill. App.
1987) (applying Duldulao to compensation plan). The Office‐
Max plan stated expressly that it was not a contract, so Sutula‐
Johnson cannot meet the first requirement.
When an employer’s policy states expressly that it does
not create contractual rights, there simply is no promise that
an employee can reasonably interpret as an offer to be bound.
Hanna v. Marshall Field & Co., 665 N.E.2d 343, 348 (Ill. App.
1996); Hogge v. Champion Laboratories, Inc., 546 N.E.2d 1025,
1031 (Ill. App. 1989); Moore, 508 N.E.2d at 521. The OfficeMax
plan said that it was “not and should not be thought of as a
contract of employment other than at‐will” and that Office‐
Max “in its sole discretion” could “amend or terminate the
plan at any time for any reason without notice.” Given this
language, Sutula‐Johnson could not reasonably have treated
the OfficeMax plan as having created binding, prospective
contractual rights that could not be changed without new consideration.
See Moore, 508 N.E.2d at 521; see also Geary v. Telular
Corp., 793 N.E.2d 128, 131, 133 (Ill. App. 2003) (employer
could unilaterally change non‐binding compensation plan for
at‐will employee).
2. Mutual Assent
Next, Sutula‐Johnson argues that the new compensation
plan could not apply to her until she agreed to its terms. Even
employment at will is a contractual relationship, after all, and
8 No. 17‐1855
it requires manifestations of mutual assent. See Walker v. Abbott
Laboratories, 340 F.3d 471, 477 (7th Cir. 2003) (“Illinois
courts generally treat at‐will employment relationships as
contractual in nature.”). Compensation is of course a key term
in contracts for at‐will employment. See Blount v. Stroud, 915
N.E.2d 925, 937 (Ill. App. 2009). Therefore, even though Office
Depot could change Sutula‐Johnson’s compensation plan
without consideration, she needed to give express assent to
the new plan before it took effect. See Duldulao, 505 N.E.2d at
318 (employee must accept offer before it is binding); Geary,
793 N.E.2d at 133 (at‐will employee had accepted change in
compensation terms).
The problem for Sutula‐Johnson is that the law deems her
to have accepted the Office Depot plan when she continued
to work after Office Depot told her about the new plan and
began paying her under its terms. An at‐will employee can
accept an offer from an employer by starting or continuing to
work. Duldulao, 505 N.E.2d at 318. Sutula‐Johnson points out
that although she continued working after Office Depot
adopted the plan, she objected orally and refused to sign the
written policy until March 2015.1 In the face of her continued
work for Office Depot, however, neither the oral objection nor
1 Sutula‐Johnson also argues that the 2014 version did not apply to her
because it said that the incentive payments applied only to “new business,”
while her business was with existing clients. Sutula‐Johnson does
not direct us to a version of the plan that contains the “new business” language.
The version we see in the record refers to paying a “New Account
Incentive” on “all new and reactivated accounts,” which does not support
her position. Even if plaintiff had identified a copy that said incentives
applied only to new business, this would limit which sales were covered
by the new incentive payments, not which employees were covered.
No. 17‐1855 9
the refusal to sign was enough to reject the new compensation
plan.
At summary judgment, Office Depot asserted the following
as undisputed material facts: on July 14, 2014, Sutula‐
Johnson received a PowerPoint presentation explaining the
new compensation policy; she knew that Office Depot
planned to apply it to her starting that day; she received compensation
according to the new plan starting that day; and,
knowing all that, she continued working for Office Depot. Sutula‐
Johnson objected to these asserted facts on the ground
that they were argumentative, inaccurate, or irrelevant. She
did not, however, cite any contradictory evidence or explain
how Office Depot’s summary was inaccurate. Sutula‐Johnson
has not raised a genuine issue of material fact on these points.
Also, in her Local Rule 56.1 statement supporting her own
motion for summary judgment, Sutula‐Johnson asserted as
undisputed that Office Depot announced the new payment
plan on July 14, 2014 and that from “that day onward,” Office
Depot had “paid commissions to Plaintiff on the reduced
commission basis it announced.”
Given these facts—at least in the absence of an earlier, contractually
binding policy—Sutula‐Johnson accepted Office
Depot’s new terms by continuing to work. See Geary, 793
N.E.2d at 130, 133 (at‐will employee accepted change to his
compensation plan by continuing to work after orally objecting
to change). Office Depot did not breach any binding contractual
obligations when it began paying Sutula‐Johnson under
the new plan.
Sutula‐Johnson relies on Robinson v. Ada S. McKinley Community
Services, Inc., 19 F.3d 359 (7th Cir. 1994). In that case
under Illinois law, we concluded that the employer could not
10 No. 17‐1855
unilaterally modify an employees’ contract without the employees’
assent, and that acceptance and consideration could
not be inferred from the employees’ continued work. Id. at
364. Critical facts distinguish that case. In Robinson, the employer’s
policy manual did not contain disclaimers denying it
was making binding promises that could not be changed. The
“employee would thus reasonably believe that she could not
be terminated without certain protections.” Id. at 363. This
case is different. As noted above, the OfficeMax plan disclaimed
any promises, so Sutula‐Johnson could not reasonably
rely on the OfficeMax plan as creating binding terms that
the employer could not change unilaterally as a condition of
continued employment.
3. Retroactive Application
Sutula‐Johnson also argues that Office Depot breached her
contract by retroactively reducing her commissions by applying
the plan she signed in March 2015 to sales that occurred
in 2014. The earlier OfficeMax plan had said that Sutula‐Johnson
earned commissions when invoices were sent to her customers.
Sutula‐Johnson testified that Office Depot paid her
commissions at the OfficeMax rates on all sales invoiced
through July 14, 2014, when Office Depot announced the new
payment plan. To the extent Sutula‐Johnson wanted the
higher OfficeMax commission rates on all sales that were in
the pipeline but not yet invoiced on July 14, neither plan entitled
her to that result as a matter of contract law. Accordingly,
Office Depot did not breach plaintiff’s contract or retroactively
reduce commissions that she had earned before July 14,
2014.
No. 17‐1855 11
B. The Illinois Wage Act
The result is different under the Illinois Wage Act, 820 Ill.
Comp. Stat. 115/1 et seq. Sutula‐Johnson asserts two types of
violations of the Act: first that the incentive payments were
“commissions” for which the Act required monthly, not quarterly,
payment; and second that the Act entitles her to commissions
that were invoiced before she resigned in December
2015, which Office Depot has refused to pay.
Under the Illinois Wage Act, the critical question turns out
to be whether the incentive payments should be deemed
“commissions” or “bonuses” for purposes of the Act. The Act
imposes stricter requirements for payment of commissions
than for bonuses, but the statute and the accompanying regulations
do not draw a sharp line distinguishing the two types
of payments. Also, the parties have not cited, and we have not
found, controlling or even strongly persuasive guidance in Illinois
case law. Doing our best to make an Erie Railroad prediction,
and considering the ordinary meanings of the terms
as applied by courts in Illinois and elsewhere, we predict that
the Illinois Supreme Court would treat Office Depot’s “incentive
payments” as commissions under the Illinois Wage Act.
1. Commissions v. Bonuses
We begin with the statutory language. The Illinois Wage
Act requires every employer, “at least semi‐monthly, to pay
every employee all wages earned during the semi‐monthly
pay period.” 820 Ill. Comp. Stat. 115/3. “Wages” are defined
broadly as “any compensation owed an employee by an employer
pursuant to an employment contract or agreement between
the 2 parties, whether the amount is determined on a
time, task, piece, or any other basis of calculation.” 820 Ill.
12 No. 17‐1855
Comp. Stat. 115/2. “Commissions” fall within that broad definition
of wages, but the Act provides that they “may be paid
once a month.” 820 Ill. Comp. Stat. 115/3. The Act does not
address how frequently bonuses must be paid. Its single reference
to bonuses requires employers to pay “separated employees”
all “final compensation,” which includes “earned
bonuses” and “earned commissions.” 820 Ill. Comp. Stat.
115/2 (defining “final compensation”); 115/5 (entitling “separated
employees” to “final compensation”). The Act itself
does not define commissions or bonuses any more specifically,
but the different language implies different meanings.
See Illinois State Treasurer v. Illinois Workers’ Compensation
Comm’n, 30 N.E.3d 288, 296 (Ill. 2015) (reasoning that “settled
rules of statutory construction” require court to assume legislature
intends different meanings when it uses different language).
The Act authorizes the Illinois Director of Labor to promulgate
regulations to administer and enforce the act. 820 Ill.
Comp. Stat. 115/12. Under the regulations, commissions are
defined as “compensation for services performed pursuant to
an employment contract or agreement between the two parties.”
Ill. Admin. Code tit. 56, § 300.510. Bonuses are “compensation
given in addition to the required compensation for services
performed.” § 300.500. The regulation explains that the
Act applies only to “earned” bonuses, not discretionary and
gratuitous bonuses. Id. A gratuitous bonus “does not obligate
the employee to do or forgo something in return for the bonus
and the employee has no right to make a demand for the bonus.”
§ 300.500(c). A bonus is discretionary “when the terms
associated with the earning of the bonus are indefinite or uncertain,
such as bonus being upon [sic] a positive evaluation
of the ‘employee’s performance’ and not when the earning of
No. 17‐1855 13
a bonus is based on objective factors such as length of service,
attendance or sign‐on or relocation incentives.” § 300.500(d).
The regulation provides further:
An employee has a right to an earned bonus when
there is an unequivocal promise by the employer and
the employee has performed the requirements set forth
in the bonus agreement between the parties and all of
the required conditions for receiving the bonus set
forth in the bonus agreement have been met. Unless
one of the conditions for the bonus is that the employee
be on the payroll at the time of the bonus payout, the
bonus is due and owing to the employee at the time of
separation.
§ 300.500(a).
The incentive payments at issue in this case could arguably
fit within both definitions. The payments are certainly
“compensation for services performed”—selling office furniture—“
pursuant to” the compensation plan and therefore
could easily be deemed commissions. See § 300.510. But they
are also paid on top of the base salary, and so might be
deemed “compensation given in addition to” some other required
compensation and might thus be deemed earned bonuses.
See § 300.500. And they are “based on” the value of the
employee’s sales and whether she is still employed on a certain
date, both of which are “objective factors” that could trigger
an earned bonus. See § 300.500(d). We must look further
for clues about how Illinois distinguishes between these two
types of incentive pay.
14 No. 17‐1855
Neither party identifies an Illinois case that distinguishes
between commissions and bonuses under the Wage Act. Office
Depot’s main argument is that the incentive payments are
tied to an employee’s individual performance and are therefore
consistent with the descriptions of bonuses found in
Birkholz v. Corptax, LLC, No. 1‐11‐0553, 2011 WL 10088322 (Ill.
App. Nov., 8, 2011), and McLaughlin v. Sternberg Lanterns, Inc.,
917 N.E.2d 1065 (Ill. App. 2009). In both cases, the plaintiffs
were fired mid‐year and sought a pro‐rata share of their annual
bonuses as “earned bonuses” under the act. See 820 Ill.
Comp. Stat. 115/2, 115/5. The question in both cases was
whether the bonuses were discretionary or “earned bonuses”
capable of calculation on a pro‐rata basis. In Birkholz, the court
reasoned that bonuses “characterized as ‘earned bonuses’ are
typically based solely on individual production or individual
performance.” Id. at *3. That is true as far as it goes, but the
same is true for commissions. The court concluded that the
bonuses were discretionary and “equivocal,” and therefore
not governed by the Wage Act, because the bonuses were
based on the overall performance of the whole company over
the whole year, and not solely the individual performance of
the employee. Id. at *3–4. McLaughlin involved the same question.
917 N.E.2d at 1069. These two cases help distinguish between
earned and discretionary bonuses, but they do not address
the line between commissions and earned bonuses.
Office Depot also relies on Perugini‐Christen v. Homestead
Mortgage Co., 287 F.3d 624, 627–28 (7th Cir. 2002), in which this
court interpreted an ERISA employee benefit plan that distinguished
among salary, commissions, and bonuses. Office Depot
points out that Perugini‐Christen found the payments in
question were bonuses partly because the employment agreeNo.
17‐1855 15
ment referred to them as bonuses. Id. at 628. Office Depot encourages
us to extend that reasoning here and decide that because
Office Depot did not refer to the payments as commissions,
they must be bonuses. But the Office Depot compensation
plan uses the term “incentive payments,” not bonuses,
and both commissions and bonuses are forms of incentive
pay. Plus, Perugini‐Christen reasoned that the payments were
“unlike ordinary commissions because although they” were
“calculated as a percentage,” they were “not based on Perugini’s
personal sales, but rather on the sales of the branch as a
whole.” Id. And as we detail below, Office Depot has referred
to the payments as “commissions” in communications with
its employees. Perugini‐Christen does not help Office Depot
here.
Sutula‐Johnson relies on Harlan v. Sweet, 564 N.E.2d 1192
(Ill. 1990). That case dealt with the meaning of the word “salary”
in a provision of the Illinois Constitution. Sutula‐Johnson
points to a passing statement: “‘commission’ is the term used
to describe the payment that some salespeople receive.” Id. at
1194. That comment does not offer much insight for our purposes.
She also relies on a case from this court interpreting an
ERISA plan. We reasoned that “‘commissions’ are the paradigmatic
form of incentive compensation for salespersons
and, applying the plain and ordinary meaning of words,
‘commissions’ would necessarily be included in ‘incentive
compensation.’” Bock v. Computer Associates Int’l, Inc., 257 F.3d
700, 706 (7th Cir. 2001) (emphasis omitted). That is certainly
true, but bonuses can also be a form of incentive compensation.
Bock does not help us distinguish between commissions
and bonuses for purposes of the Illinois Wage Act.
16 No. 17‐1855
In the absence of Illinois cases drawing a line between
commissions and bonuses under the Wage Act or in any other
context, our job under Erie Railroad remains to predict what
the Illinois Supreme Court would do. E.g., Daniels v. FanDuel,
Inc., 884 F.3d 672, 674 (7th Cir. 2018). We turn to the general
rules of statutory interpretation in Illinois, where the “fundamental
rule of statutory construction is to ascertain and give
effect to the legislature’s intent.” Andrews v. Kowa Printing
Corp., 838 N.E.2d 894, 898 (Ill. 2005) (interpreting the Wage
Act). “The best indication of legislative intent is the statutory
language, given its plain and ordinary meaning.” Id.
Do the terms “commission” and “bonus” have ordinary
meanings that might help us? We conclude that the incentive
payments in this case are better understood within the ordinary
meaning of “commissions” than of “bonuses.” Most important,
the payments are compensation for making a sale
and are paid out as a set percentage of each transaction’s
value. That is the essence of a commission. Commission, Webster’s
Third New International Dictionary (1993) (“a fee paid
to an agent or employee for transacting a piece of business or
performing a service . . . esp : a percentage of the money received
in a sale or other transaction paid to the agent responsible
for the business”); Commission, Black’s Law Dictionary
(10th ed. 2014) (“fee paid to an agent or employee for a particular
transaction, usu. as a percentage of the money received”).
Those meanings are at least consistent with the Illinois Supreme
Court’s comment in Harlan that “‘commission’ is the
term used to describe the payment that some salespeople receive.”
564 N.E.2d at 1194; see also Suominen v. Goodman Industrial
Equities Mgmt. Grp., LLC, 941 N.E.2d 694, 705 (Mass.
App. 2011) (“The term ‘commission’ is commonly understood
No. 17‐1855 17
to refer to compensation owed to those in the business of selling
goods, services, or real estate, set typically as a percentage
of the sales price.”); Mechmet v. Four Seasons Hotels, Ltd., 825
F.2d 1173, 1175 (7th Cir. 1987) (“The most common type of
commission in this country is the sales commission . . . .”);
American National Ins. Co. v. Keitel, 186 S.W.2d 447, 449 (Mo.
1945) (“The word ‘commission,’ when used to denote compensation
for work performed, as is ordinarily understood,
means compensation paid upon results achieved. It especially
applies to agents selling their masters’ wares on a percentage
basis.”).
Taken together, the key features of the Office Depot incentive
payments persuade us that they are better understood as
commissions than as bonuses. The Office Depot payments
were mandatory rather than discretionary. They were paid according
to a set formula. They were based on the value of the
individual employee’s sales rather than on company‐ or department‐
wide performance. The record also indicates that
the incentive payments were a significant portion of the Office
Depot’s employees’ pay—more than two‐thirds of Sutula‐
Johnson’s compensation, according to her deposition testimony—
which makes them seem more like “compensation for
services performed” than “compensation given in addition to
the required compensation for services performed.” Ill. Admin.
Code, tit. 56, §§ 300.500, 300.510. Finally, Office Depot
paid a monthly draw against future incentive payments. We
are not familiar with the notion of a “draw against a future
bonus.” These are all hallmarks of commissions, not bonuses.
Office Depot argues further that the incentive payments
were no longer intended to be the primary source of employee
compensation, and that they were intended to be “behavior18
No. 17‐1855
motivating.” Neither of these facts makes these “incentive
payments” more like bonuses than commissions. It is common
for sales representatives to receive base salaries plus a
percentage of their sales as commissions. See, e.g., McInnis v.
OAG Motorcycle Ventures, Inc., 35 N.E.3d 1076, 1078 (Ill. App.
2015) (motorcycle salesman paid “base salary . . . plus sales
commission”); Pistakee Marina, Inc. v. Illinois Workers’ Compensation
Comm’n, No. 2‐14‐0516WC, 2015 WL 5673061 at *2 (Ill.
App. Sept. 25, 2015) (marina worker paid base salary plus 4%
commission on all sales); Blount, 915 N.E.2d at 933 (employee
of broadcasting company paid base salary plus commission
based on air‐time sold). And as noted, bonuses and commissions
are both forms of incentive pay designed to motivate behavior
the employer values. See Bock, 257 F.3d at 706 (reasoning
that commissions “are the paradigmatic form of incentive
compensation for salespersons”).
Office Depot also implies that the incentive payments cannot
be commissions because they are tied to annual sales targets
that Office Depot calculates on a quarterly basis. But the
payments remain compensation for services performed under
the plan, calculated as a set percentage of the value of sales
that employees make on Office Depot’s behalf. Those are commissions,
and the Illinois legislature has chosen to require that
commissions be paid monthly. We need to respect that choice,
and we see no basis in Illinois case law for predicting that tying
commissions to individual sales targets transforms them
into bonuses.
Although we do not believe an employer’s label can transform
a commission into a bonus, Office Depot’s own language
undermines its efforts in this lawsuit to portray the incentive
No. 17‐1855 19
payments as bonuses. The PowerPoint that Office Depot circulated
to explain the compensation change said it was a
“Commission based plan paid on sales rep margin dollars
back to dollar one.” On two additional slides, the PowerPoint
said that the “Commission Rates” varied based on quarterly
sales targets. In other words, when Office Depot needed to
explain the new compensation plan in plain terms to its employees,
it called the payments “commissions.” Regardless of
the term Office Depot used in the plan, in practice these payments
are compensation paid to salespersons as a set percentage
of the value of each transaction. For purposes of the Illinois
Wage Act, these payments are better understood as commissions
than as bonuses.
Finally, we respectfully disagree with the district court’s
view that the compensation plan should be interpreted so as
to deem it to comply with the law. This interpretive tool might
be useful in other contexts, such as when a court must decide
how an ambiguous contract should be applied, but the terms
of the Office Depot have not been shown to be ambiguous as
applied to Sutula‐Johnson. The district court’s interpretive
rule is not useful in deciding whether undisputed facts did or
did not violate the law. Office Depot should not benefit from
the ambiguity that it, as drafter, created by using the term “incentive
payment.” When the issue is whether an employment
contract or policy violates employees’ statutory rights, we see
no reason to predict that Illinois law would give the employer
the benefit of the doubt.
2. Illinois Wage Act Violations
Given our prediction of Illinois law, Office Depot was not
entitled to summary judgment on Sutula‐Johnson’s statutory
claims. She alleges two types of violations: (1) failure to pay
20 No. 17‐1855
her commissions on a monthly basis; and (2) failure to pay her
commissions on sales invoiced before she resigned in December
2015. Taking the facts asserted by Office Depot at summary
judgment, we predict that Illinois would find that Office
Depot violated the Illinois Wage Act. Summary judgment for
Office Depot was inappropriate.
Whether Office Depot complied with the Act depends on
when the commissions were “earned.” The Office Depot plan
said that commissions were not earned until the day they
were paid, once every quarter. We agree with Sutula‐Johnson
that Office Depot’s plan set an invalid condition for its employees
to “earn” their commissions. The Illinois Wage Act
requires employers “at least semi‐monthly, to pay every employee
all wages earned during the semi‐monthly pay period.”
820 Ill. Comp. Stat. 115/3. Commissions can be paid on
a monthly basis, id., but that is framed as an exception to the
semi‐monthly requirement. The Act thus means that commissions
must be paid at least monthly.
Can an employer satisfy this requirement by simply declaring
that wages are not earned until the day they are paid?
Of course not. Otherwise, an employer could say that employees
accrue wages at a rate of $10 for every hour worked, but
they do not earn the wages until they are paid on the last day
of the month. This would nullify the Illinois Wage Act’s requirement
that employees be paid on a timely (usually semimonthly)
basis. See Watts v. ADDO Management, L.L.C., 97
N.E.3d 75, 79 (Ill. App. 2018) (“The purpose of the Wage Act
is to provide Illinois employees with a cause of action for the
timely and complete payment of earned wages or final compensation.”);
Andrews v. Kowa Printing, 814 N.E.2d 198, 205
(Ill. App. 2004) (same). The regulations entitle a “separated
No. 17‐1855 21
employee” to “an earned commission when the conditions regarding
entitlement to the commission have been satisfied,
notwithstanding the fact that, due to the employee’s separation
from employment, the sale or other transaction was consummated
by the principal personally or through another
agent.” Ill. Admin. Code, tit. 56, § 300.510(a). An employer can
set the requirements for earning a wage or commission, but it
cannot undermine the monthly payment requirement by imposing
an arbitrary date on which wages are earned, completely
unrelated to the employee’s duties.2 Under Office Depot’s
quarterly payment scheme, employees might not “earn”
a commission on a sale until over three months after they
completed all work on it. This delay (and the effective forfeiture
of earned commissions upon resignation) violated the Illinois
Wage Act.
Office Depot insists that even if commissions were earned
upon invoicing, it complied with the Illinois Wage Act’s requirement
for timely payment. It argues that even though it
did not pay commissions in full until months later, it paid employees
a semi‐monthly salary and a $250 monthly draw
against future commissions (or “incentive payments”). Neither
fact satisfies Office Depot’s obligation under the Illinois
Wage Act to pay all commissions earned each month by the
end of the next month. A small monthly draw does not meet
2 The summary judgment record suggests that Office Depot considered
the commissions “accrued” upon customer invoicing, and would calculate
the commission that the employee was due on the sale. Sutula‐Johnson’s
direct supervisor testified that she would be paid a commission on
the invoiced amount, regardless of whether the customer actually paid the
full invoice value. Office Depot has not identified any conditions Sutula‐
Johnson needed to meet after customer invoicing in order to be paid that
commission, other than remaining employed on the date of payment.
22 No. 17‐1855
the requirement that the employer pay “all wages earned”
during the relevant period. See 820 Ill. Comp. Stat. 115/3. Also,
the Act distinguishes between salaries and commissions and
sets different rules for both. See 820 Ill. Comp. Stat. 115/2 (distinguishing
between salary and commission). Office Depot
could not satisfy the requirement that it pay all commissions
earned during one pay period by paying only all salary
earned during that period.
Thus, Office Depot was not entitled to summary judgment
on Sutula‐Johnson’s claims under the Illinois Wage Act. She
has offered evidence that Office Depot violated the Wage Act
by failing to pay her commissions monthly, see 820 Ill. Comp.
Stat. 115/3, and by failing to pay her all commissions earned
before she resigned, see 820 Ill. Comp. Stat. 115/2, 115/5; see
also Ill. Admin. Code, tit. 56 § 300.510(a).3

* * *

3 We have also reviewed Sutula‐Johnson’s filings on her own motion
for summary judgment, but we conclude that we cannot order judgment
in her favor on this record. Her motion papers did not establish undisputed
facts supported as required by citations to available evidence, so we
remand for further proceedings consistent with this opinion.

Outcome: In conclusion, AFFIRM summary judgment for Office Depot
on the claims for breach of contract but REVERSE summary
judgment for Office Depot on the claims under the Illinois
Wage Act and REMAND for further proceedings consistent
with this opinion.

Plaintiff's Experts:

Defendant's Experts:

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