On Thursday, a federal jury in Seattle, Washington, found that former IBM sales manager Scott Kingston had been unlawfully fired by the company and denied sales commission after challenging the treatment of subordinates as racially biased. And it awarded him $11.1m.
The case dates back to 2017 when two IBM sales people within months of each other closed similarly large software sales deals that led to vastly different commission payments. Nick Donato, who is White, received more than $1m for a SAS Institute deal, while Jerome Beard, who is Black, was paid about $230,000 for closing a sale to HCL Technologies.
Beard was paid about 15 per cent of what he should have received under his agreement with IBM, despite a company policy not to cap sales commissions.
HP/HPE, IBM, and Oracle have all faced recent lawsuits over the practice of capped commissions, in which companies agree to pay a certain percentage of sales to sales reps and later adjust the sale value downward to reduce their payout obligations.
Guess what's heading to trial? IBM and its tactic of yoinking promised commissions after sales reps seal the dealREAD MORE
Kingston, who managed the two salespeople through two lower-level managers, raised his concerns about racial discrimination with his superiors toward the end of 2017.
Recalling his jury testimony, he said of his conversation with his managers, "They were telling me it wasn’t about money; it was some other reason. I flat out said, 'You are leaving no possibility for anybody to conclude another reason than racial discrimination. You are foreclosing any other possible conclusion. You are going to get us sued.'"
And that's what happened. Beard sued IBM in 2018. After a failed motion by IBM to dismiss the case in April, 2020, the company settled for an undisclosed sum several months later.
Kingston sued in 2019 [PDF], after IBM fired him in April, 2018, claiming he had erred in approving Donato's seven-figure commission. The company also fired two other IBM managers, Andre Temidis and Michael Lee, who raised similar objections to the allegedly discriminatory capping of commission due to an Arab-American salesperson.
The Seattle jury found [PDF] IBM violated Washington State law against discrimination and policies against race discrimination and withholding wages.
"We are proud of our client, Scott Kingston, for standing up for what’s right,” said Matthew E. Lee, an attorney with Milberg Coleman Bryson Phillips Grossman, the law firm representing Kingston, in a statement. “He deserved justice and, after three long years, this verdict has given him that.”
The lawsuits filed against IBM by Temidis and Lee have yet to be resolved.
"We are disappointed by the jury's verdict," IBM said in a statement emailed to The Register. "IBM does not condone retaliation, race discrimination, or any other form of discrimination. The company will consider all of its options on appeal." ®