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Friday, August 16, 2019

Former IBM account exec sues to get bigger commission from $34 million sale to Marines

Federal Court

By Marian Johns | Aug 7, 2019


ALEXANDRIA, Va. (Legal Newsline) – A former IBM account executive claims the company fraudulently capped his more than $700,000 commission on a $34 million sale of IBM products and services to the United States Marine Corps.

According to the July 22 filing in the U.S. District Court for the Eastern District of Virginia, plaintiff James Mallon filed suit against International Business Machines Corp. (IBM) alleging fraudulent misrepresentation, unjust enrichment and constructive fraud. 

Mallon, who began working for IBM in 2015, alleges he had earned several of the company's highest sales awards and distinctions and was receiving a base salary plus commissions. In 2017, the suit states IBM offered Mallon and its other various salespeople an incentive plan that specifically stated that payments would be "uncapped," according to the suit. 

In 2017, the suit states Mallon was getting ready to close a $34 million federal account deal with the U.S. Marine Corps that he had been working on for nearly two years. IBM executives allegedly then told Mallon that they wanted to move his Marines account into a Target Account Absolute Plan (TAAP), which would form a commission pool of $744,000 made available to all sales reps who worked on the account, or they could assign a $1.7 million quota to the Marines account if he kept the account as a regular commission account.

Mallon alleges he chose the TAAP since he was the only sales rep to work on the deal. However, he alleges he was then given a new incentive plan that included being paid for the first three years of revenue from the Marine account and that the commissions were being "split up" among the sales rep working on the account. In the new plan, Mallon received $394,000 instead of the $744,000 he would have received under "his normal commission" and the TAAP, according to the suit. 

Mallon seeks to recover his alleged lost commission as well as punitive damages against IBM. He is represented by David Hilton Wise and John J. Drudi of Wise & Donahue in Fairfax, Virginia.

U.S. District Court for the Eastern District of Virginia case number 1:19-cv-00954

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