Attorney Al Gordon O'Connell Wins Payment of Commissions for Internet Fulfillment by Macy's Workers

In the rapidly changing retail sales environment where Internet-based sales are becoming more the rule than the exception, an arbitrator has ruled that Macy's has unfairly taken advantage of its commission sales associates by making them take time off the sales floor to work on fulfillment of web sales without proper compensation. The case was argued by Attorney Al Gordon O'Connell on behalf of UFCW, Local 1445, which represents employees at the Macy's store in Downtown Boston as well as a number of branch locations.

The crux of the problem is that full-time commission sales associates earn money only off of the sales that they make, so any time they spend off of the selling floor and away from potential customers automatically cuts into their earnings. And to compound the problem, the associates' earnings in one year are used to calculate the benefit rate the employees are paid out for vacations and other leave in the following year, potentially sending their annual incomes spiraling down the drain.

In a complex case arising under two separate labor contracts, an arbitrator ruled that Internet fulfillment constituted "services provided" to the customer so as to require the payment of commission rates for the work performed. The arbitrator also ruled that Internet sales are the modern-day equivalent of "mail order" sales and thus entitled associates to any commissions they would be entitled to earn for mail order work. The arbitrator thus ordered Macy's to calculate and pay back commissions to all the affected employees, to recalculate their benefit rates, and to pay commissions on all Internet fulfillment activities going forward.

The case will have significant implications for the way Macy's and other retailers deal with their unionized commission sales forces and underscores the need for union protections in the retail environment.