HP and Hewlett Packard Enterprise will pay a $25 million settlement to salespeople who sued over messed up pay (HP, HPE)
- After a nine-year court battle that began years before Hewlett Packard split into two companies, HP salespeople that sued the company are expecting to receive thousands of dollars in settlement fees.
- The salespeople sued, claiming that HP's computer systems weren't tracking commissions properly and they weren't getting paid in a timely manner.
- Complaints about pay for salespeople dragged on for years, long after the company split. In 2017, an HP executive apologized to salespeople about the ongoing problems in a mass email.
- This week, the court approved a $25 million settlement. Both HP and HPE have also promised to fix their pay tracking systems.
About 2,000 of HP's and Hewlett-Packard Enterprise's salespeople will finally be getting their share of a $25 million settlement paid to them by the two companies.
Salespeople had first sued over problems with pay nine years ago, before HP had split into two companies.
In 2017, HP agreed to the $25 million settlement, from which the lawyers will take their cut — but it was just this week that the court approved the settlement arrangement. That means the money should be soon forthcoming to the plaintiffs at last, according to the final court documents seen by Business Insider.
The company's salespeople had originally sued, claiming that the company's antiquated computer systems were not doing a good job of calculating their commissions.
They continued to complain about HP's sales and commission-tracking computer systems for years after they first filed suit.
Business Insider reported on the situation in 2016, including reporting on a meeting between the company's then-CEO Meg Whitman and her sales leadership team, who lambasted her about the situation. That meeting took place six months after Whitman split the company into two. Thousands of members of the salesforce were not properly being paid properly at that time, the sales managers told her, according to sources.
The wacky pay situation was so bad that some salespeople couldn't make their mortgages and were facing foreclosure, while others were behind in their alimony payments, salespeople told us. HPE had even wrongly told one salesperson that he owed the company over $130,000 after the first quarter of 2016, sources told us.
A year later, on April 27, 2017, the pay situation was still so bad that Cheryl Brown, then the vice president and COO of HPE's Americas Enterprise Group, sent an email to the North American troops and apologized, according to an email seen by Business Insider. Brown left HPE in October, according to her LinkedIn.
Back in 2017, an HPE spokesperson told Business Insider that the company had been paying people properly and on time, and said that the paper records were apparently wrong. That same year, however, HPE settled the case.
A spokesperson for HPE tells Business Insider: "HPE is pleased that the mediated resolution in this dispute that was reached by the parties in 2017 has been approved by the Court.”
A spokesperson for Franklin Azar, one of the lawyers that handled the class-action suit on behalf of the plaintiff, former HP salesperson Jeff Wall, tells us that salespeople will be getting more than a token settlement.
Their cut of the money is based on the last 30 days of their average salary and other variables. Some people are getting several thousand dollars, and others are getting "considerably" more, this spokesperson said.
HP and HPE will also pay almost $1.2 million of the settlement in penalties to the State of California Labor & Workforce Development Agency (LWDA), according to court documents. The companies have also promised to fix their commission tracking systems.
Meg Whitman stepped down from the HPE CEO role in February, 2018. She is now the CEO of NewTV, a TV startup created by DreamWorks cofounder Jeffrey Katzenberg.