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First Circuit permits worker to sue Kansas company in Massachusetts for unpaid commission

The case of Cossart v. United Excel Corp. involves facts that are becoming more and more common these days because of technological advances that make remote workplaces more affordable and easier to use. Mr. Cossart first entered into an employment contract with United Excel in 2010. United Excel is a design/build company that provides architectural and construction management services to hospitals. Mr. Cossart worked for United Excel as a salesperson. United Excel established a sales office for Mr. Cossart in his home state of Massachusetts. United Excel provided Mr. Cossart with a phone, computer, printer, and videoconference equipment.

In 2013, in connection with his employment with United Excel, Mr. Cossart negotiated a deal with a California hospital. He negotiated the deal from his Massachusetts office and also in California. Under the terms of the employment contract that Mr. Cossart had with United Excel at the time, Mr. Cossart would have been owed a commission once the deal with the California hospital became finalized. When finalization of the deal was imminent, Mr. Cossart informed the President of United Excel, Ky Hornbaker, that he would expect United Excel to pay him a commission of $219,000 once the deal was finalized. According to Mr. Cossart, Mr. Hornbaker balked at paying a commission that high and insisted that Mr. Cossart accept a commission of $62,000. When Mr. Cossart refused to back down, Mr. Hornbaker allegedly scuttled the deal with the California hospital and, consequently, Mr. Cossart received no commission for his work in negotiating the deal. Mr. Hornbaker then also fired Mr. Cossart.

The legal issue that the First Circuit considered in this case was whether Mr. Cossart, an employee who worked in Massachusetts, could sue United Excel, a Kansas company, in Massachusetts. United Excel argued that it did not have sufficient ties to Massachusetts for the Massachusetts courts to have jurisdiction, or authority, over it. The First Circuit rejected United Excel’s argument and held that Massachusetts courts could exercise jurisdiction over United Excel for the purposes of Mr. Cossart’s lawsuit against it.

If United Excel had prevailed in this case, Mr. Cossart presumably would have had to hire an attorney who could file a lawsuit in Kansas against United Excel. This would have increased the litigation costs for Mr. Cossart and also would have made it less costly for United Excel to continue to fight Mr. Cossart in court.

To avoid disputes like this one, many employment contracts contain forum selection clauses. These clauses require the employee and employer to use the forum identified in the contract, such as a particular state’s court system, if either of them have to file a lawsuit due to a breach of the contract. A forum selection clause in this case likely would have eliminated the need for Mr. Cossart and United Excel to pay lawyers to litigate over what forum Mr. Cossart could use to pursue his lawsuit against United Excel.

The Maine Employee Rights Group can review employment contracts for you before you sign them. We can tell you whether there are clauses in them that will negatively impact you in ways you may not have expected. We can also tell you if there are additional clauses, such as a forum selection clause, that you may want to ask the employer to include.