Three former employees sued Hewlett-Packard (HPQ) for default in paying millions of dollars of commission to its sales force. It is believed that this is the result of faulty software, incapable of keeping an accurate record of commissions earned by respective employees.
We believe this is an embarrassing development for a company of this stature, which may adversely affect its goodwill going forward. It is likely that the incident will spread a negative feeling among all employees, whether affected or not. Although the company has acknowledged the problem, it is of the opinion that the issue has been blown out of proportion.
This lawsuit is particularly targeted at a computer program known as “Omega”, which HP started using after its acquisition of Compaq in 2002. The company declared that only a small portion of the 23,000-strong global sales team had been affected by the malfunction of “Omega”.
The lawsuit has been filed in the San Francisco federal court by the three former employees of the company, who claim to have done business worth millions of dollars. The employees have requested the court to give this the status of a class action lawsuit, claiming that the total commission to be paid by the company was over $5.0 million. We believe that this allegation if proved in a court of law may attract monetary penalty over and above the arrear commission to be paid by the company.
Although the company plans to control costs through layoffs to generate incremental savings, depriving employees of their rightful claims is unacceptable. We would like to believe that the whole incident was absolutely unintentional, but only time will tell whether the renowned computer maker can come out of the situation unscathed.
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