Skip to main content
  • Personal
  • Business
  • Foundation
    Close
  • Select Region

      Select your region below to see curated info.

    • Global
    • India
    • MENA
  • mySHRM Login
  • MySHRM
    • Dashboard
    • Account
    • Logout
SHRM
  • Membership
    • Membership

      As a SHRM Member®, you’ll pave the path of your success with invaluable resources, world-class educational opportunities and premier events.

      Membership Tiers
      • Professional
      • Student
      • Global
      • Executive
      • Business
      Membership Benefits
  • Learning
    • Certification

      Validate your skills with the gold standard in HR

      • Choosing Your Certification
      • SHRM-CP
      • SHRM-SCP
      • How to Get Certified
      • Prepare for the Exam
      • Recertification
      Education Programs

      Expert-led training for real workplace change

      • eLearning
      • Essentials of HR
      • Seminars
      Specialty Credentials

      Go deep in your niche. Stand out in your field.

      • AI + HI Specialty Credential
      • People Manager Qualification (PMQ)
      Executive Voices

      Bring our experts to your stage.

  • Attend
    • Events

      Demonstrate your ability to apply HR principles to real-life situations.

      • SHRM26 Annual Conference & Expo
      • All Things Work 2026
      • BLUEPRINT 2026
      • Linkage Institute 2026
      • Skills Accelerator 2026
      • Talent 2027
      • The AI+HI Project 2027
      State Conferences

      Attend a SHRM state event to network with other HR professionals and learn more about the future of work.

      Seminars

      Stand out from among your HR peers with the skills obtained from a SHRM Seminar.

      Webinars

      Learn live and on demand. Earn PDCs and gain immediate insights into the latest HR trends.

  • Resources
    • Resources

      Stay up to date with news and leverage our vast library of resources.

      • Flagships
      • HR Research
      • Legal & Compliance
      • Latest News & Trends
      • Tools & Guides
      • Webinars
      HR Topics
      • AI in the Workplace
      • Civility at Work
      • Compensation & Benefits
      • Inclusion & Diversity
      • Talent Acquisition
      • HR Technology
      • Workplace Violence Prevention
      Educational Programs

      Designed and delivered by HR experts to empower you with the knowledge and tools you need to drive lasting change in the workplace.

  • Community
    • Find a SHRM Chapter

      Easily find a local professional or student chapter in your area.

      • SHRM Northern California
      SHRM Connect

      Post polls, get crowdsourced answers to your questions and network with other HR professionals online.

      Membership Councils

      Learn about SHRM's five regional councils and the Membership Advisory Council (MAC).

      Volunteers

      Learn about volunteer opportunities with SHRM.

  • Shop
    • SHRM Store

      Shop for HR certifications, credentials, learning, events, merchandise and more.

      Workplace Essentials
      • SHRM Memberships
      • SHRM Certification
      • Specialty Credentials
      • HR Tools & Tech
      Education
      • Seminars
      • eLearning
      • Books
      Merchandise
      • Accessories
      • Apparel
      • Office & Home
Become a Member
Renew
Rejoin Now
Renew
Ask an HR Advisor
Close
  • Personal
  • Business
  • Foundation
  • Membership
    back
    Membership
    • Membership

      As a SHRM Member®, you’ll pave the path of your success with invaluable resources, world-class educational opportunities and premier events.

      Membership Tiers
      • Professional
      • Student
      • Global
      • Executive
      • Business
      Membership Benefits
  • Learning
    back
    Learning
    • Certification

      Validate your skills with the gold standard in HR

      • Choosing Your Certification
      • SHRM-CP
      • SHRM-SCP
      • How to Get Certified
      • Prepare for the Exam
      • Recertification
      Education Programs

      Expert-led training for real workplace change

      • eLearning
      • Essentials of HR
      • Seminars
      Specialty Credentials

      Go deep in your niche. Stand out in your field.

      • AI + HI Specialty Credential
      • People Manager Qualification (PMQ)
      Executive Voices

      Bring our experts to your stage.

  • Attend
    back
    Attend
    • Events

      Demonstrate your ability to apply HR principles to real-life situations.

      • SHRM26 Annual Conference & Expo
      • All Things Work 2026
      • BLUEPRINT 2026
      • Linkage Institute 2026
      • Skills Accelerator 2026
      • Talent 2027
      • The AI+HI Project 2027
      State Conferences

      Attend a SHRM state event to network with other HR professionals and learn more about the future of work.

      Seminars

      Stand out from among your HR peers with the skills obtained from a SHRM Seminar.

      Webinars

      Learn live and on demand. Earn PDCs and gain immediate insights into the latest HR trends.

  • Resources
    back
    Resources
    • Resources

      Stay up to date with news and leverage our vast library of resources.

      • Flagships
      • HR Research
      • Legal & Compliance
      • Latest News & Trends
      • Tools & Guides
      • Webinars
      HR Topics
      • AI in the Workplace
      • Civility at Work
      • Compensation & Benefits
      • Inclusion & Diversity
      • Talent Acquisition
      • HR Technology
      • Workplace Violence Prevention
      Educational Programs

      Designed and delivered by HR experts to empower you with the knowledge and tools you need to drive lasting change in the workplace.

  • Community
    back
    Community
    • Find a SHRM Chapter

      Easily find a local professional or student chapter in your area.

      • SHRM Northern California
      SHRM Connect

      Post polls, get crowdsourced answers to your questions and network with other HR professionals online.

      Membership Councils

      Learn about SHRM's five regional councils and the Membership Advisory Council (MAC).

      Volunteers

      Learn about volunteer opportunities with SHRM.

  • Shop
    back
    Shop
    • SHRM Store

      Shop for HR certifications, credentials, learning, events, merchandise and more.

      Workplace Essentials
      • SHRM Memberships
      • SHRM Certification
      • Specialty Credentials
      • HR Tools & Tech
      Education
      • Seminars
      • eLearning
      • Books
      Merchandise
      • Accessories
      • Apparel
      • Office & Home
Become a Member
Renew
Rejoin Now
Renew
Ask an HR Advisor
  • Select Region

      Select your region below to see curated info.

    • Global
    • India
    • MENA
SHRM
mySHRM Login
  • MySHRM
    • Dashboard
    • Account
    • Logout
Close

  1. Topics & Tools
  2. Employment Law & Compliance
  3. Texas Supreme Court Clarifies Standard for Payment of Commissions When Agreement Is Silent
Share
  • Linked In
  • Facebook
  • Twitter
  • Email

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Vivamus convallis sem tellus, vitae egestas felis vestibule ut.


Error message details.

Copy button
Reuse Permissions

Request permission to republish or redistribute SHRM content and materials.


Learn More
News

Texas Supreme Court Clarifies Standard for Payment of Commissions When Agreement Is Silent

June 2, 2022 | Lawrence D. Smith © Ogletree Deakins

A person is holding a stack of dollar bills.


For many years, an oft-litigated question concerned whether a former employee was owed the commissions on sales made prior to the employee's discharge from employment. Sometimes employment agreements were clear on the issue, such as by providing unambiguously that commissions would be paid when the employer received payment for a completed sale. Frequently, however, employment agreements were less than clear as to when commissions would be paid to former employees. Over the years, courts ruled in different ways and applied different standards when determining whether a former employee was entitled to commissions on sales made prior to an employment termination. On May 20, in Perthuis v. Baylor Miraca Genetics Laboratories LLC, the Supreme Court of Texas clarified the standard to be applied in those situations.

Background

The plaintiff was vice president of sales and marketing for Baylor Miraca Genetics Laboratories. In early 2015, the company drafted, and the plaintiff signed without alteration, a two-page employment agreement that provided the following: "Your commission will be 3.5 percent of your net sales." The agreement contained no other explanation concerning the commission arrangement.

In January 2017, the plaintiff completed negotiations on an amendment to a sales contract with a prominent client, making the contract the largest of its kind in the company's history. The company terminated the plaintiff's employment on Jan. 23, 2017. The next day, the client signed the contract amendment that the plaintiff had negotiated. The company did not pay the plaintiff any commission on the amended contract.

The plaintiff sued, seeking payment of the unpaid commissions from the contract. A jury found for the plaintiff on all claims, but it did not award him the full amount he sought. The trial court judge had instructed the jury on the "procuring-cause doctrine." Under this rule of Texas contract law, the plaintiff would be entitled to the commissions if he was the "procuring cause" of the sales; that is, if he was the but-for cause of the sales involved. Both the company and the plaintiff appealed. The appellate court held that the procuring-cause doctrine did not apply and reversed the judgment for the plaintiff. The appellate court determined that the employment agreement unambiguously entitled the plaintiff to commissions only for sales made during his employment.

The Supreme Court of Texas's Analysis

The Supreme Court of Texas reversed the appellate court's decision, holding that in the absence of specific language delineating the terms of payment in a commission agreement, the procuring-cause doctrine controls. In so holding, the Supreme Court of Texas relied on a decision from 1916 that had adopted the procuring-cause doctrine in cases involving commissions owed to brokers in real-estate sales.

The Texas high court indicated that parties are free to specify in an agreement whatever they want concerning when commissions are earned and paid, but in the absence of any language addressing the timing and entitlement to commissions, the procuring-cause doctrine applies. Under this standard, an employee will be entitled to a commission on sales, even after his or her employment is terminated, if the employee is the proximate and but-for cause of the specific sales.

Key Takeaways

The Supreme Court of Texas's decision provides clarity concerning situations where an employment agreement is not clear as to when a commission is earned or whether it will be paid after the termination of employment. The high court's decision specifically provides that the "procuring-cause doctrine" is the default standard to be used when commission agreements are silent concerning when commissions are earned or due. The decision also establishes that the employer and employee are free to establish their own guidelines concerning the payment of commissions. One lesson from this decision for Texas employers concerns the importance of clearly articulating in an agreement with a commissioned employee when a commission will or will not be paid (e.g., commissions will be paid only if the employee is still employed at the time of scheduled payment).

Lawrence D. Smith is an attorney with Ogletree Deakins in San Antonio. © 2022 Ogletree Deakins. All rights reserved. Reposted with permission.

Compensation Management
ESG, Ethics & Compliance
Employment Law & Compliance

Was this resource helpful?

Leave Feedback

SHRM-CP Promo Image
Validate your HR expertise

Earning your SHRM-CP credential makes you a recognized expert and leader in the HR field.

Get Certified


Related Content

(opens in a new tab)
News
How One Company Uses Digital Tools to Boost Employee Well-Being

Learn how Marsh McLennan successfully boosts staff well-being with digital tools, improving productivity and work satisfaction for more than 20,000 employees.

(opens in a new tab)
News
A 4-Day Workweek? AI-Fueled Efficiencies Could Make It Happen

The proliferation of artificial intelligence in the workplace, and the ensuing expected increase in productivity and efficiency, could help usher in the four-day workweek, some experts predict.

(opens in a new tab)
News
Rising Demand for Workforce AI Skills Leads to Calls for Upskilling

As artificial intelligence technology continues to develop, the demand for workers with the ability to work alongside and manage AI systems will increase. This means that workers who are not able to adapt and learn these new skills will be left behind in the job market.

Workplace Compliance Newsletter

Keep abreast of employment law and compliance developments and their wide-reaching impacts.

Success title

Success caption

Manage Subscriptions
Our Brands

SHRM Foundation Logo
SHRM Executive Network Logo
CEO Circle Logo
SHRM Business Logo
SHRM Linkage Logo
SHRM Labs
Overview

  • About SHRM
  • Careers at SHRM
  • Press Room
  • Contact SHRM
  • Post an HR Job
SHRM Named to Newsweek's 2026 America's Top Online Learning Provider List
Advocacy

  • SHRM Advocacy
  • Federal Policies
  • State Affairs
  • Global Policy
  • Take Action
  • SHRM E2 Initiative
Brand Partnership

  • Partnership Opportunities
  • Advertise with Us
  • Exhibit & Sponsorship
  • Recertification Providers
  • Book a Speaker
Member Resources

  • Ask an HR Advisor
  • SHRM Newsletters
  • SHRM Flagships
  • Topics & Tools
  • Find an HR Job
  • Vendor Directory

© 2026 SHRM. All Rights Reserved
SHRM provides content as a service to its readers and members. It does not offer legal advice, and cannot guarantee the accuracy or suitability of its content for a particular purpose. Disclaimer

Follow Us

  • LinkedIn
  • Facebook
  • Twitter
  • Instagram
  • YouTube
Feedback

  1. Your Privacy Choices

  2. Terms of Use

  3. Accessibility

  4. Privacy Policy

Join SHRM for Exclusive Access to Professional Content

SHRM Members enjoy unlimited access to articles and exclusive professional content resources.

Already a member? Login
Free Article

Login to unlock unlimited access or join SHRM today to get unlimited access to articles and member-exclusive resources.

Already a member? Login
Limit Reached

You've reached the limit of 1 free article this month. Join to access unlimited articles and member-only resources.

Already a member? Login
Free Article

Login to unlock unlimited access or join SHRM today to get unlimited access articles and member-exclusive resources.

Already a member? Login
Limit Reached

You've reached the limit of 1 free article this month. Join the Executive Network and enjoy unlimited content.

Already a member? Login
Unlock Your Career with SHRM Membership

Please enjoy this free resource! Join SHRM for unlimited access to exclusive articles and tools.

Already a member? Login
Join SHRM for Exclusive Access to Professional Premium Content

SHRM Members enjoy unlimited access to articles and exclusive professional premium resources.

Already a member? Login
Join SHRM for Exclusive Access to Student Content

SHRM Members enjoy unlimited access to articles and exclusive member resources.

Already a member? Login
Join SHRM for Exclusive Access to Executive Network Content

SHRM member enjoys unlimited access to articles and exclusive executive member resources.

Already a member? Login

Your membership is almost expired! Renew today for unlimited access to member content.

Renew now

Your membership has expired. Renew today for unlimited access to member content.

Renew Now

Your Executive Network membership is nearing its expiration. Renew now to maintain access.

Renew Now

Your membership has expired. Renew your Executive Network benefits today.

Renew Now