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Novato man sues Nortel over pay

Marin Independent Journal

December 20, 2004

© 1999-2004 by MediaNews Group, Inc. and ANG Newspapers

By Jim Welte, IJ reporter

Monday, December 20, 2004 – A Novato man has sued his former employer, telecommunications giant Nortel Networks, Inc., claiming the company cut his sales commission and pay despite his claims that he had just closed one of the biggest deals in the industry’s history.

Ronald Marcelle, a former regional salesman for Nortel Networks, left the company in July 2003, but not before his commission rate was slashed by 85 percent and his base pay was cut by 13 percent. The cuts came even though Marcelle had secured a $26 million deal for Nortel to upgrade and replace Bank of America’s interactive voice response technology – used by banks and other firms to allow customers to retrieve account information over the telephone.

The lawsuit, filed in Marin County Superior Court, claims fraud, breach of contract and deceit. The backdrop of the case includes controversial bonuses the company’s top executives received despite the company’s financial woes. Despite claiming consistent profits at the time, Nortel, headquartered in Ontario, Canada, has said it might have to restate its financial results between 2000 and 2003.

“They were taking money from a guy that had really earned it and they were paying it to people who didn’t – and they cooked the books,” said Jeffrey Lerman, a San Rafael-based attorney representing Marcelle in the lawsuit. “We speculate the motive was greed, pure and simple.”

Nortel Networks spokeswoman Tina Warren did not return calls for comment.

According to the lawsuit, Marcelle had worked for a company called Periphonics Corp., which Nortel acquired in November 1999. Bank of America signed the $26 million deal in May 2002. Nortel informed Marcelle in April 2003 that his base pay and commission rate would be cut retroactively to Jan. 1, 2003.

Contact Jim Welte via e-mail at [email protected]

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