United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
J. Casper United States District Judge.
Steven Serabian (“Serabian”) has filed this
lawsuit against Defendant SAP America, Inc.,
(“SAP”) alleging failure to pay wages in
violation of the Massachusetts Wage Act (“Wage
Act”), Mass. Gen. L. c. 149, § 148 (Count I),
breach of contract (Count II), breach of the implied covenant
of good faith and fair dealing (Count III), retaliatory
termination in violation of the Wage Act, Mass. Gen. L. c.
149, § 148A (Count IV), and unjust enrichment (Count
D. 1-2. Defendants have moved for partial summary judgment,
seeking dismissal of Counts III and IV in full and portions
of Counts I and II. D. 41 at 1. For the reasons stated below,
the Court DENIES IN PART and ALLOWS IN PART the motion for
partial summary judgment.
Standard of Review
Court grants summary judgment where there is no genuine
dispute as to any material fact and the undisputed facts
demonstrate that the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(a). “A genuine issue
is one that can ‘be resolved in favor of either
party' and a material fact is one which ‘has the
potential of affecting the outcome of the case.'”
Gerald v. Univ. of P.R., 707 F.3d 7, 16 (1st Cir.
2013) (quoting Pérez-Cordero v. Wal-Mart P.R.,
Inc., 656 F.3d 19, 25 (1st Cir. 2011)). The movant bears
the burden to demonstrate the absence of a genuine issue of
material fact, Carmona v. Toledo, 215 F.3d 124, 132
(1st Cir. 2000), and they do so “by citing specifically
to materials in the record or by ‘showing that the
materials cited do not establish the absence or presence of a
genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.'”
Colón-Fontánez v. Municipality of San
Juan, 660 F.3d 17, 27 (1st Cir. 2011) (quoting
Fed.R.Civ.P. 56(c)(1)). If the movant meets their burden, the
non-moving party “must, with respect to each issue on
which she would bear the burden of proof at trial,
demonstrate that a trier of fact could reasonably resolve
that issue in her favor.” Borges ex rel. S.M.B.W.
v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010).
“Neither party may rely on conclusory allegations or
unsubstantiated denials, but must identify specific facts
derived from the pleadings, depositions, answers to
interrogatories, admissions and affidavits to demonstrate
either the existence or absence of an issue of fact.”
Magee v. United States, 121 F.3d 1, 3 (1st Cir.
1997). The Court “view[s] the record in the light most
favorable to the nonmovant, drawing reasonable inferences in
his favor.” Noonan v. Staples, Inc., 556 F.3d
20, 25 (1st Cir. 2009).
following facts are drawn from the parties' statements of
material facts, D. 42; D. 47, and are undisputed unless
a corporation that sells “software and services to its
customers for managing accounting, distribution, human
resources and manufacturing functions, ” and “On
Premise” and “Cloud” software are two major
product categories of SAP's sales. D. 42 at 4; D. 47 at
20. Serabian was hired as an at-will employee on or about
February 14, 2011 with the title Customer Relationship
Management (“CRM”) Sales Specialist, Line of
Business Solutions. D. 42 at 4; D. 47 at 21. His compensation
was set to include both a fixed salary and “variable
compensation component” (i.e., commissions based on a
percentage of his software sales). D. 42 at 4; D. 47 at 21.
Serabian's 2011 Compensation
2011 compensation was governed by a 2011 Compensation
Package, which included the following provision:
“[s]pecialist plan is subject to North America
Operating Income Capped Funding.” D. 42 at 5; D. 47 at
21. SAP states that this provision, known as the
“Funding Factor, ” authorizes SAP to cap total
commissions if they exceeded the amount SAP budgeted for a
particular year and, therefore, adjust commissions for
salespersons on a percentage basis. D. 42 at 5. Serabian
disputes the details of the Funding Factor because SAP's
production of the 2011 Compensation Package lacks the
attachment regarding the “Capped Funding
Methodology.” D. 42-6 at 10; D. 47 ¶¶ 1-2; D.
47 at 22. It is undisputed, however, that SAP applied the
Funding Factor to 2011 commissions, resulting in a $93, 512
adjustment for Serabian's 2011 commissions. D. 42 at 5;
D. 47 at 22. Serabian disputes that this adjustment was
appropriate under the Funding Factor plan. D. 47 at 22.
Because SAP had already paid Serabian part of this amount as
of the Funding Factor calculation date, SAP then informed him
that they would subject $45, 037 of his commissions to a
“clawback” or “setoff from future
commissions.” D. 42 at 5; D. 47 at 22.
requested information from SAP regarding the payment of his
2011 compensation several times in 2012. D. 42 at 9-10; D. 47
at 29-30. He also requested information from SAP many times
in 2012 and 2013 regarding those years' commissions. D.
42 at 10; D. 47 at 29-30.
The 2013 Special Performance Incentive
March 2013, Serabian joined a new “indirect sales
team” at SAP called the “SWAT” team. D. 42
at 5; D. 47 at 22. SAP created the SWAT team to “drive
Cloud software sales following [SAP's] acquisition of a
Cloud software company.” Id. According to SAP,
the SWAT team “was not directly responsible for closing
deals, but was to monitor deals of a certain type and work
with individual direct sales representatives to assist them
in closing deals.” D. 42 at 5. Serabian disputes this
characterization. D. 47 at 23; D. 47 ¶ 21. SAP states
that Serabian was given his compensation plan in writing in
fall 2013. D. 42 at 6. Serabian disputes this point, stating
that “[a] portion of Serabian's compensation was
reduced to writing, and that is set forth in the 2013
plan.” D. 47 at 23. Serabian contributed to a large
transaction with Ernst & Young in or about September 2013
(the “Ernst & Young deal”). D. 42 at 6; D. 47
occasionally offers Special Performance Incentives, or
“SPIFFs, ” as “additional variable
compensation incentives outside of employee compensation
plans.” D. 42 at 6; D. 47 at 23. SAP states-and
Serabian disputes-that SAP “requires that all SPIFFs be
documented in writing, ” and that SPIFFs are
“time-bound, product-specific, and typically apply to a
subset of SAP's sales team.” Id. SAP
relies upon an affidavit by Keith B. Hontz, who was Vice
President and Manager of the SWAT team in 2013, in support of
this point. D. 42 at 6; D. 42-1 ¶ 6. According to SAP,
SAP offered a two percent SPIFF in 2013 to Direct Sales Team
members for On-Premise software sales that
“specifically provided” that the SPIFF applied
only to direct sales team members, rendering SWAT team
members ineligible for the SPIFF. D. 42 at 6. In support, SAP
submits an October 30, 2013 email that contains an attachment
announcing a Two Percent SPIFF that would apply to
“[a]ll eligible quota carriers on the 2013 Cloud Bonus
Plan able to sell solutions from the extended OnPremise and
Cloud customer sales bag in 2013.” D. 42-11 at 2, 7.
The document states that it “applies ONLY to direct
sales teams and [is] NOT intended for the indirect
teams.” D. 42-11 at 5.
disputes that the Two Percent SPIFF did not apply to him. D.
47 at 24. He states that “SAP announced the SPIFF for
all ‘CRM OnPremise' sales at a meeting in June/July
2013, ” pointing to his own deposition for support, in
which he stated that “Joe Fuster, who ran CRM sales I
believe either globally or for North America, told CRM sales
force that they were offering a special incentive, a SPIFF of
2 percent for on-premise software deals that were
sold.” D. 42-3 at 20-21; D. 47 at 24; D. 47 ¶ 14.
Serabian also presents a November 2013 email from Hontz
providing his compensation for the third quarter of the
fiscal year and stating that “[p]er Roger Martin, the
2% SPIFF for CRM On Premise is being handled independently
and he will follow up on those payments later.” D. 47
¶ 21; D. 48-12 at 4.
Fall 2014 and Serabian's Termination
September 2014, SAP decided to merge its CRM software sales
team with its Hybris sales teams the following January. D. 42
at 6; D. 47 at 24. This transition would require merging
certain CRM roles with Hybris roles. D. 42 at 7; D. 47 at 25.
On September 17, 2014, Jeff Moses, a Senior Vice President of
Sales at SAP, informed the Human Resources department that a
reduction-in-force in North America would be necessary by the
end of 2014 to facilitate the merger. D. 42 at 7; D. 47 at
24-25. SAP needed to eliminate five CRM account executive
positions and close three open positions, for a total of
eight positions eliminated nationwide. D. 42 at 7; D. 47 at
25. SAP selected three divisions-the Northeast, Strategic