Steinhebel v. Los Angeles Times Communications, LLC

Steinhebel v. Los Angeles Times Communications, LLC (2005) 126 Cal.App.4th 696, decided by Division Eight of the Second District, was an action by former telesales employees of the defendant newspaper publisher, whose primary job was to telephone prospective customers to attempt to sell newspaper subscriptions; they also telephoned existing customers with limited subscriptions to attempt to sell them broader ones. (Steinhebel, supra, 126 Cal.App.4th at p. 700.) The employees had a telesales agreement under which a sale of a subscription did not qualify as a commissionable order unless the customer kept the subscription for 28 days. The employees nevertheless received advances before the defendant could determine whether the order would in fact ripen into a commissionable order. (Id. at pp. 701-702.) The plaintiffs filed a three-count complaint seeking relief under sections 203, 221, 225, 400 through 410, and Business and Professions Code, section 17200. (Steinhebel, supra, 126 Cal.App.4th at p. 702.) The defendant moved for summary judgment, which the trial court granted, ruling that, although the commissions were earned at the time the work was complete, the commissions were subject to a 28-day condition precedent. (Id. at p. 703.) The Court of Appeal affirmed, framing the issue and its holding as follows: "we are presented with the issue whether an employer may advance commissions to its employees and then by agreement charge back any excess of advances over commissions earned against future advances. As we discuss below, we hold an employer may legally advance commissions to its employees prior to the completion of all conditions for payment and, by agreement, charge back any excess advance over commissions earned against any future advance should the conditions not be satisfied." (Steinhebel, supra, 126 Cal.App.4th at p. 704.)