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January 2019: Victory for Tech Startup in Four-Year Dispute with Former Salesperson

January 2019

On July 25, 2018, the firm achieved a victory for technology start-up C3 IoT (“C3”) when a jury rejected a former salesperson’s claims that the company owed him hundreds of thousands of dollars in additional compensation and had wrongfully terminated him as a result. The plaintiff—C3’s former vice president of sales—sought millions of dollars in damages, including punitive damages, and attorneys’ fees.

C3 is a startup founded by technology mogul Tom Siebel. In 2013, C3 hired the plaintiff pursuant to a sales compensation plan for Fiscal Year 2014, which contemplated that over half of the plaintiff’s compensation would be derived from commissions. Shortly after the end of Fiscal Year 2014, and before the company issued a new compensation plan for Fiscal Year 2015, the plaintiff closed two deals resulting in substantial revenue for C3. Days after the plaintiff closed the second deal, the company issued his 2015 compensation plan, which included commission rates significantly lower than his 2014 rates. The plaintiff alleged that after he complained about the retroactive application of a plan he never agreed to for work he had already performed, the company terminated him.

In June 2018, the firm won summary adjudication disposing of the plaintiff’s breach of contract claims, forcing the plaintiff to go to trial on a quantum meruit theory. After an eight-day trial in Santa Clara County Superior Court, the jury roundly rejected the plaintiff’s remaining claims, finding the plaintiff did not have a reasonable expectation that he would be paid more for the two deals than what was provided for in his 2015 plan. As a result, C3 now walks away from four years of litigation without owing the plaintiff a dollar.