Opinion
June 6, 1934.
PRESENT: Stearns, C.J., Rathbun, Sweeney, Murdock, and Hahn, JJ.
( 1) Employer and Employee. Commissions. Discretion. When a bonus or commission is agreed to be given for satisfactory services, it is within the discretion of the employer to determine whether the employee's services have been satisfactory. Such discretion must be fairly and reasonably exercised.
( 2) Employer and Employee. Commissions. Where employer agreed to pay commissions to employees during their good behavior, retaining the right to refuse payment where rules were violated, discharge of employee for dishonesty forfeits his right to commission.
( 3) Employer and Employee. Commissions. Discretion. Where home office of employer had a bona fide report of facts upon which to base its refusal to pay commission to employee its refusal to pay commission was neither arbitrary nor without reason.
ASSUMPSIT. Heard on exception of defendant and exception sustained.
Morgan Morgan, for plaintiff.
Atwood, Remington, Thomas Levy, for defendant.
This action of assumpsit was tried by a justice of the Superior Court without the intervention of a jury. At the close of the testimony he rendered a decision for plaintiff for $53.27, the amount claimed to be due. The case is before this court on defendant's exception to the denial of its motion for a decision.
The following facts are undisputed. Plaintiff was employed by defendant as a saleswoman in its store from August, 1929, until April 4, 1931, when she was paid the wages due and discharged.
This action is brought to recover commissions claimed to be due on sales made during the months of February, March and April preceding her discharge. Plaintiff was familiar with defendant's rules by which it agreed to pay a commission to its clerks.
Rule 2 states: "Commissions will be paid at the discretion of the home office; their decision will be final . . ." Rule 11 states: "Clerks will receive a commission, rate to be determined by the company . . . Commissions on the above . . . are paid only for the good behavior of sales clerks or managers, and we retain the right to refuse payment if any of our rules are violated."
Defendant's general manager testified that the home office exercised its discretion not to pay plaintiff a commission. He testified that a few days before plaintiff was discharged he was in the store and saw her deliver a package containing three articles to a customer; that after the customer departed he opened the cash drawer in the register, before any other clerk had an opportunity to open it, and the money which plaintiff should have received for the articles delivered to her customer was not in the drawer; that he ordered the local manager to discharge plaintiff the following Saturday night and to pay her her wages, and that he reported these facts to the home office.
Plaintiff denied that she took any money from the cash drawer or otherwise behaved in a dishonest manner. The trial justice said he believed plaintiff and awarded her the amount claimed for commissions. The trial justice misconceived the issue.
Plaintiff was not entitled to a commission unless her services were satisfactory to the home office. When a bonus or commission is agreed to be given for satisfactory services, it is within the discretion of the employer to determine whether the employee's services have been satisfactory. Such discretion must be fairly and reasonably exercised. If an employee is discharged for dishonesty he forfeits his right to claim a commission. Barker v. Barker Artesian Well Co., 45 R.I. 297. 39 C.J. 160. As the home office of defendant had a bona fide report of some facts upon which to base its refusal to pay a commission to plaintiff, it cannot be held that its refusal was arbitrary or without reason.
Defendant's exception to the denial of its motion for a decision is sustained.
On June 19, 1934, at 9 o'clock, a.m., the plaintiff may appear before this court and show cause, if any she has, why the case should not be remitted to the Superior Court with direction to enter judgment for the defendant.