Can You Sue for Unpaid Bonuses or Commissions in Texas?
Hard work should lead to fair pay. Yet for many employees and executives in Texas, that promise is broken when bonuses or commissions go unpaid. Whether it’s a withheld sales bonus, unpaid commissions after termination, or deferred compensation that never arrives, these situations raise serious legal questions — and frustration.
So, can you sue for unpaid bonuses or commissions in Texas?
The short answer is yes — but your path forward depends on the terms of your agreement and the reason for nonpayment. As an employment lawyer in Houston, I’ve seen how these cases unfold. The details matter, but the law offers clear protections for employees who’ve earned their pay.
Understanding Bonuses and Commissions in Texas
In Texas, bonuses and commissions are treated as earned compensation once they meet the terms of an agreement. But the difference between the two is important:
- A bonus is typically a performance or incentive payment — often quarterly or annual — tied to results, company profits, or specific goals.
- A commission is a percentage or fee paid when a sale or transaction closes.
Both can make up a significant part of an employee’s compensation package, especially for sales professionals, executives, and managers. Whether the payment is labeled a “bonus” or “commission,” if it’s tied to your work performance or measurable results, you have legal grounds to pursue it once earned.
When Employers Must Pay Commissions and Bonuses
1. Written Employment Contracts
A written employment contract or commission plan is the strongest foundation for an unpaid wage claim. It outlines how and when a commission or bonus is earned and when it should be paid.
For example, a contract might say:
- “Employee earns a 5% commission on closed sales, payable within 30 days of customer payment.”
- “Employee is eligible for a year-end performance bonus if employed through December 31.”
If these terms are met, the employer must pay. Under Texas law, vague or unclear contract language is interpreted against the employer since they drafted it.
2. Verbal or Implied Agreements
Even without a written agreement, Texas law can still recognize your right to payment. Courts have enforced oral agreements and implied promises when evidence shows that both parties understood there was an obligation to pay.
Examples include:
- Consistent past payments reflected in pay stubs or emails.
- A manager verbally promising a commission structure at hire.
- A company’s established pattern of paying similar bonuses in the past.
If you can show that your work directly earned the company revenue, the court can use doctrines like promissory estoppel (a broken promise you relied on) or quantum meruit (fair payment for work performed) to support your claim.
When Employers Can Legally Withhold Payment
Not every unpaid commission or bonus qualifies for a lawsuit. Employers have legal defenses that depend on contract terms and timing.
1. Unmet Conditions or Eligibility Dates
Many compensation plans require continued employment through a specific date.
For example, if your bonus is due on December 31 but you’re terminated on December 30, the employer may argue you didn’t meet the eligibility condition.
However, if you can prove you earned the payment before termination, or that the employer ended your employment to avoid payment, the case may shift in your favor.
2. Termination for Cause
Employers often use “for cause” clauses to deny payment — citing misconduct, poor performance, or policy violations.
But “cause” must be clearly defined and supported by facts. If it’s vague or inconsistent, you may still have a valid claim. Courts often scrutinize the timing and reasoning behind these decisions, especially if the termination occurred close to a payment date.
3. Discretionary Bonuses
Some bonus plans give the company full discretion over whether to pay or how much to pay. In those cases, courts are less likely to force payment unless there’s evidence of bad faith or retaliation.
Still, discretion must be exercised honestly — not as a way to punish an employee or avoid obligations.
When Withholding Payment May Be Illegal
1. Breach of Contract
If you met all the terms of your employment contract or commission plan, failure to pay is a breach of contract. You can sue to recover:
- The unpaid wages or bonuses
- Interest on the amount owed
- Attorney’s fees and court costs
In many cases, courts award additional damages if the employer’s conduct was deliberate or in bad faith.
2. Retaliation or Bad Faith Conduct
It’s unlawful for an employer to retaliate against an employee who rightfully earned compensation.
If you were fired or demoted right before your commission or bonus was due, that could indicate retaliatory intent — a common ground for a Houston employment dispute.
Courts often look at timing, internal communications, and company practices to determine whether the decision was fair or retaliatory.
3. Misclassification or Misrepresentation
Employers sometimes call commissions “discretionary bonuses” to avoid payment obligations.
However, if the payment is tied to measurable performance — like closed sales, revenue targets, or client retention — courts may classify it as earned compensation. Once earned, it must be paid.
Your Legal Options for Recovery
1. File a Wage Claim with the Texas Workforce Commission (TWC)
The Texas Payday Law allows employees to file a claim for unpaid wages, including commissions and bonuses, through the Texas Workforce Commission.
The TWC investigates claims and can order payment, but the process has limits:
- Claims must be filed within 180 days of the missed payment.
- The TWC tends to follow strict definitions and may deny claims involving “discretionary” or “future” payments.
Despite its limits, a TWC claim is often the quickest path for smaller disputes or unpaid final paychecks.
2. File a Civil Lawsuit
For larger sums or complex agreements, filing a civil lawsuit may be the better route.
Through court action, you can pursue:
- Full payment of the unpaid commission or bonus
- Legal fees and interest
- Possible additional damages for bad faith conduct
If your claim is under $20,000, you can also file in Justice of the Peace Court without an attorney. For more significant or disputed cases, a Houston employment lawyer can guide you through state or federal court proceedings.
3. Contact an Employment Attorney
An experienced attorney can:
- Review your contract and pay records
- Identify violations of Texas labor laws
- Negotiate payment or pursue litigation if needed
Legal counsel is especially valuable if you suspect retaliation, breach of contract, or misrepresentation by your employer.
How to Strengthen Your Claim
If you believe you’re owed unpaid commissions or bonuses, take these steps:
- Gather Documentation — contracts, pay stubs, emails, and company policy manuals.
- Keep Sales and Performance Records — evidence showing you met targets or completed deals.
- Send a Written Demand — request payment in writing to establish a record of communication.
- Note Deadlines — 180 days for TWC claims, up to 2 years for most lawsuits.
- Act Promptly — delay can weaken your case and reduce recoverable damages.
The more organized and factual your evidence is, the stronger your legal position becomes.
Common Scenarios in Texas Employment Disputes
I often see similar situations arise across Houston and other Texas cities:
- A salesperson closes several deals but is terminated before the company receives payment.
- An executive is denied a performance bonus after meeting agreed-upon metrics.
- An employer revises the commission plan retroactively to reduce payout rates.
- A business cancels year-end bonuses citing “budget constraints” despite profits.
Each case turns on its specific facts — but in all of them, clear documentation and legal support make the difference.
How an Employment Lawyer Can Help
At Craighead Law Firm, we represent employees and executives in compensation disputes across Texas. Attorney Clayton Craighead has handled both sides of employment cases — representing individual employees and Fortune 500 companies in state and federal courts. That experience provides valuable insight into how employers defend these cases and how to overcome those defenses.
Clayton has successfully resolved disputes involving:
- FMLA violations and wrongful termination
- Executive compensation and deferred bonuses
- Non-compete and non-solicitation agreements
- Unpaid wage and commission claims
If your employer owes you money, our firm can evaluate your situation, explain your options, and pursue the recovery you deserve.
Moving Forward: Protect What You Earn
You’ve worked for your pay — you shouldn’t have to fight to collect it. Texas law gives employees the right to recover unpaid commissions and bonuses, whether through the Texas Workforce Commission or the courts.
If you’re facing this issue, act quickly. Deadlines can pass faster than you think, and evidence fades over time.
At Craighead Law Firm, we help employees and executives in Houston and across Texas recover the compensation they’ve earned through clear strategy and experienced legal advocacy.
If you worked for it, you deserve to be paid for it. Contact Craighead Law Firm today to discuss your case and protect your rights.