A second lawsuit has been filed against
Johnson Controls after the company unveiled a new salesperson incentive plan last November that eradicated a system of backlog payments due to employees under a previous version of the plan.
The lawsuit was filed last week in Oakland County, Michigan in the sixth circuit court.
Michael Konczak, a resident of Macomb County, Michigan, is a commissioned salesperson who sells HVAC systems for Johnson Controls, which is technically based in Ireland but has its operating headquarters in Glendale. Konczak has worked for the company for 19 years and is currently the “number one salesperson of HVAC services” for Johnson Controls in North America, according to the lawsuit. He booked approximately $50 million in sales in 2022 and $26 million in 2023, court documents show.
Under the company’s previous incentive plan, salespeople received a portion of their commission when a project was booked and the remainder of their commission as the project hit key milestones. This created a backlog of commission payments that ranged in size for each salesperson.
The new sales plan does away with that commission structure not only moving forward, but also on projects booked prior to Oct. 1, 2023 that had not reached required milestones. This means backlog payments will not be paid out.
“Pursuant to the 2024 plan, in addition to changing the terms for future commission payments and new jobs, Johnson Controls also informed (Konczak) that it would not pay his earned but unpaid commissions,” according to the lawsuit. “In other words, Johnson Controls stole (Konczak’s ) earned but unpaid commissions for ongoing projects that did not close during the 2023 plan year.”
The new system instead sets a sales quota for employees and then offers an incentive payment based on the percentage of the quota a salesperson reaches. Several Johnson Controls employees
spoke with BizTimes Media anonymously and said they're expecting their income to be reduced by between 25% and 35% under the new plan.
The company denies this allegation, stating: “In this revised plan, sellers can meet and potentially exceed their annual quotas resulting in uncapped earning opportunity."
Konczak alleges he is owed $150,000 in commission from Johnson Controls stemming from final payments the company has since received from customers, plus more than $380,000 in unpaid commissions from projects that have not yet been completed. A trial by jury for the case has been requested.
A group of six Johnson Controls salespeople filed an initial class action lawsuit against Johnson Controls in U.S. District Court for the Eastern District of Wisconsin
earlier this month.
“The success of our organization is directly tied to the success of our people, and we routinely assess our practices to best support their growth and achievements,” said Johnson Controls in a previously issued statement. “We modified our sales incentive program to better align with our company strategy to deliver smart, healthy and more sustainable environments for our customers. We will continue to assist our sales organization to ensure a seamless transition to our revised competitive model.”
