With Jury Verdict, Tech Billionaire Siebel's Years-Long Fight With a Former Salesman Nears an End
After a contentious and lengthy legal battle involving multiple law firms, a jury found that Thomas Siebel's C3 IoT did not owe former salesman Gregg Carman additional pay.
July 27, 2018 at 06:00 PM
4 minute read
A grinding four-year worker lawsuit against the company led by tech billionaire Thomas Siebel has come a step closer to conclusion, with a San Jose jury this week delivering a verdict against a former salesman for C3 IoT who claimed that Siebel shortchanged him on commissions.
C3 IoT, an industry-facing internet of things company, convinced a majority of the jury that former salesman Gregg Carman did not have a reasonable expectation of being paid several hundred thousand dollars extra in commissions—defeating his claim under a legal theory known as “quantum meruit.” C3 is represented by Quinn Emanuel Urquhart & Sullivan.
But the jury also unanimously rejected C3's counterclaims against Carman, which alleged that the Massachusetts-based former employee misrepresented the nature of deals with two utility companies that he had closed, and actually owed C3 roughly $120,000.
The jury agreed that Carman had been fired for either complaining about his compensation or to avoid paying him additional commissions, but did not find that he had been wrongfully terminated under California law. Carman is represented by David Lowe of San Francisco employment firm Rudy, Exelrod, Zieff & Lowe.
The verdict brings the long-simmering dispute near to an end. Where many companies might have quickly settled a small-dollar suit like Carman's—which was filed after Siebel refused to pay the salesman his suggested compromise amount of $360,000—C3 fought the case vigorously, using four different major law firms over the course of the years-long case.
Siebel, a former Oracle executive, has a record of litigating aggressively in his defense. After fending off a wrongful termination suit in the 1990s, he pursued a malicious prosecution claim against the lawyer on the case, who later became a California state court judge. That decade-long saga only resolved after she publicly apologized and agreed to pay a $100,000 settlement.
“Tom is a very principled guy. And for Tom, it really wasn't about the money,” said Quinn Emanuel partner John Potter, who led the trial for C3. “For Tom it was about the principle. And if someone is going to assert an illegitimate claim for compensation, Tom is not going to settle it.”
C3 faced a challenging case, though. Carman stood to be paid over $1 million in commissions under a fiscal year 2014 company policy. He actually closed the deals with the utility companies in FY 2015. But he was not informed of the FY 2015 policies—which would leave him with about a quarter of what he would have received earlier—until after the deals closed.
The defense hinged on C3 convincing the jury that such policy changes, and their retroactivity, are standard practice in the industry and that Carman was an experienced enough salesman to have understood that. “He had an awareness of how the industry operates, and … his payment was consistent with how the industry operates,” Potter said in an interview.
C3 potentially faced around $8 million in damages and attorney fees at trial, due in part to the fact that wrongful termination damages are trebled under California law.
Although Carman's main case against C3 was defeated, Lowe said in an interview Friday that he still saw a victory in fending off the counterclaims brought by the company.
“It's part of a pattern that we've seen increasingly in employment cases, where defendants become aggressive when they're challenged over compensation,” he said. “I really do believe that as plaintiffs lawyers, we have to fight these counterclaims and we have to win them.”
As for whether he planned to appeal the verdict, Lowe said he and his client are still assessing the path forward. “I think both sides have some decisions to make,” Lowe said.
The jury verdict was delivered after a day of deliberations on Wednesday, following a week-and-a-half-long trial in the courtroom of Santa Clara Superior Court Judge Sunil Kulkarni.
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