Case Brief Assignment 6 PLST 201

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Jan 9, 2024

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Case Brief Assignment 6 PLST 201 Citation: Ellis v. McKinnon Broadcasting Co.-18 Cal. App. 4th 1796, 23 Cal. Rptr. 2d 80 (1993) Parties: John Ellis Plaintiff-Appellant; McKinnon Broadcasting Company Defendant-Appellee Facts: John Ellis was employed as an advertising salesman by the television station KUSI owned by defendant McKinnon Broadcasting Co. Mr. Ellis was initially hired under an oral employment agreement as an advertising account executive with a commission rate of 20 percent, the monthly salary of $2166, a provision that KUSI would pay him a draw against commissions based upon collections received by the station and the terms of his job responsibilities and starting date. Additionally, KUSI guaranteed Mr. Ellis a salary of $ 2166 for the first three months regardless of the amount of advertising he sold. Mr. Ellis was not aware KUSI would later require him to sign a written employment contract. Approximately two weeks after he began working, KUSI presented Mr. Ellis with a written employment contract. The KUSI sales manager communicated to Mr. Ellis that the written contract was just a formality and thus he did not examine the contract closely. He signed the contract without objection and did not notice a provision that stated that this contact “superseded any prior agreements between the Station and the Employee.” Sometime thereafter, Mr. Ellis vacated employment at KUSI, but after he left the station collected nearly $100.000 in fees on advertising previously sold by Mr.

Ellis. Mr. Ellis did not receive a commission on those sales. He then decided to challenge the forfeiture provision in the employment contract which denied him commissions on sales receipts collected after he quit. Prior Proceedings: McKinnon Broadcasting owned by the defendant claimed that the plaintiff’s written employment contract contained a forfeiture provision that denied him commissions on advertising he sold if the station hadn’t yet received payment for the advertising before Mr. Ellis terminated his employment. Upon leaving his job, Mr. Ellis challenged the forfeiture provision before the Labor Commission, which found in his favor and awarded damages. The employer countered the commission forfeiture provision in the parties’ employment contract precluded petitioner’s recovery of such commission. McKinnon Broadcasting obtained a trial de novo and the trail court determined that the forfeiture provision was enforceable. Mr. Ellis appealed. Issue: Was the forfeiture provision enforceable? Holdings: No. The Court of Appeal of California, Fourth Appellate District, Division One, reversed the judgment with directions to the trial court to enter judgment in favor of Mr. Ellis in the amount of the stipulated value of his 20 percent commission on the advertising fees collected by McKinnon Broadcasting after the termination of Mr. Ellis’ employment.

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