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Parker v. EnerNOC, Inc.

Superior Court of Massachusetts, Suffolk, Business Litigation Session

June 4, 2018

Francoise PARKER
ENERNOC, INC. et al.[1]

          File Date: June 5, 2018


          Kenneth W. Salinger, Justice of the Superior Court

         A jury found that EnerNOC, Inc., did not pay Francoise Parker the full sales commission she had earned, and thereby breached Parker’s employment contract and violated the Massachusetts Wage Act. It also found that EnerNOC fired Ms. Parker to avoid its future contractual obligation under an alleged "true-up" policy to pay commissions on an already completed sale, in violation of the implied covenant of good faith and fair dealing. And the jury found that both EnerNOC and Eric Erston are liable for retaliating against Ms. Parker because she complained that she was being discriminated against based on her sex and because she complained that she was not paid the full commission owed to her by EnerNOC as wages. The jury awarded Ms. Parker a total of $374, 161.82 in unpaid sales commissions, $40, 000 as compensation for emotional distress, and $240, 000 in punitive damages only against EnerNOC.

         EnerNOC and Mr. Erston have moved for judgment notwithstanding the verdict or a new trial as to damages awarded in connection with the "true-up" policy, and for remittitur of the punitive damage award. Ms. Parker seeks an award of reasonable attorneys fees. And the parties disagree as to what part of the damage award is subject to trebling under Wage Act.

         The Court will deny Defendants’ motion for JNOV, a new trial, or remittitur, because the jury’s verdict is supported by the evidence. It will award $390, 750 in attorneys fees, rather than the $540, 285 requested by Parker. And it concludes that under the Wage Act the $25, 063.34 in commissions that were due and payable on Parker’s last day of employment must be trebled, but that the $349, 098.48 that the jury awarded as damages under the Wage Act for retaliation may not be trebled.

         1. Defendants’ Post-Trial Motions

         Defendants argue that the jury’s findings regarding an alleged "true-up" policy and its award of punitive damages are not supported by the evidence. The Court disagrees.

         1.1. True-Up Policy

         Ms. Parker helped EnerNOC close a software sales contract with Eaton Industries (Ireland) Ltd. on March 4, 2016. This deal was far and away, by an order of magnitude, the largest sale in EnerNOC’s history.

         The contract between EnerNOC and Eaton had a so-called "termination for convenience" ("TFC") clause under which Eaton was free to terminate the deal after one year. EnerNOC took the position that, under its published sales commission policy, it was only obligated to pay Parker a sales commission on the guaranteed first year of revenues from Eaton, even if Eaton never terminated the contract. The jury found that EnerNOC had a binding "true-up policy" for customer deals that had a TFC clause, and thus was contractually obligated to pay additional sales commission for the remainder of the contract if Eaton did not exercise its termination right at the end of the first year. And the jury also found that EnerNOC breached the implied covenant of good faith and fair dealing by firing Ms. Parker to avoid paying commissions she would have earned under the "true-up" policy if the Eaton contract was not terminated. Eaton renegotiated but did not terminate its contract after one year.

         The jury’s verdict with respect to the true-up policy and the implied covenant are supported by the evidence. The finding that EnerNOC had such a true-up policy was reasonably based on testimony of Gregg Dixon and Eric Erston, who each served as EnerNOC’s senior vice president for marketing and sales, and confirmatory internal EnerNOC emails marked as exhibits 55, 56, 104, and 105. The implicit finding that Ms. Parker relied on the true-up policy when she kept working for EnerNOC to land the Eaton deal is supported by Parker’s testimony that (i) she understood that EnerNOC’s sales commission policies required EnerNOC to pay a commission up front on the initial guaranteed term of a software contract with a TFC clause, and then to pay an additional commission on the rest of the contract if the customer did not exercise its TFC rights and therefore the rest of the contract became a second guaranteed revenue stream, and (ii) she relied upon that understanding in working to land the Eaton contract.

         Defendants note that Parker never expressly stated that her understanding was based on the true-up policy described by Dixon and Erston, never expressly said that she relied upon that policy, and never even referred to a "true-up" policy that was separate and apart from the published sales commission policy.

         But the evidence as a whole nonetheless supported a reasonable inference that Parker knew about and reasonably relied upon the existence of the true-up policy in working diligently on EnerNOC’s behalf to make the sale to Eaton, as explained above. "The inferences drawn by a jury from the evidence ‘need only be reasonable and possible and need not be necessary or inescapable.’" Commonwealth v. Kelly, 470 Mass. 682, 693 (2015), quoting Commonwealth v. Casale, 381 Mass. 167, 173 (1980).

         1.2. Punitive Damages

         Defendants also argue that the jury’s award of $240, 000 in punitive damages under G.L.c. 151B is excessive. The Court disagrees.

         The Supreme Judicial Court has held that to decide whether an award of punitive damages is excessive, a court should consider "the degree of reprehensibility of the defendant’s conduct," whether the punitive damages are too far in excess of the "actual harm inflicted on the plaintiff," and how the punitive damage award compares to "the civil or criminal penalties that could be imposed for comparable misconduct." Haddad v. Wal-Mart Stores, Inc.,455 ...

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