Alexander Sorokunov worked for NetApp from 2016 through June 2019, earning an annual salary plus commissions governed by an individual Goal Sheet and the company’s Compensation Plan for fiscal year 2019. The Plan calculated commissions as a percentage of sales revenue achieved in the employee’s territory, but also contained a windfall provision that reserved NetApp’s right to limit commission payments when an employee’s goal attainment exceeded 200 percent.
In fiscal year 2019, Sorokunov and roughly 300 other employees exceeded the 200 percent threshold. In May 2019, NetApp invoked the windfall provision, informing employees that further commissions above that level would not be paid. NetApp attributed the widespread over-attainment to forecasting errors. Sorokunov’s final paycheck for the fiscal year was reduced by $31,402.42 as a result. He resigned the following month.
Sorokunov then filed a PAGA notice with the Labor and Workforce Development Agency and NetApp, and in January 2020 filed a First Amended Complaint. He alleged that the Plan violated Labor Code section 2751(a) by failing to set forth the method by which commissions would be computed and paid; that NetApp violated section 221 by collecting wages already paid; and that NetApp violated section 223 by secretly paying less than the contractual wage scale. He also asserted claims for unfair competition under Business and Professions Code section 17200 et seq., breach of contract, and PAGA penalties, along with an individual claim under Labor Code section 202(a) for failure to pay earned commissions upon resignation.
In December 2020, the trial court granted NetApp’s petition to compel arbitration of Sorokunov’s individual non-PAGA claims. In May 2024, the court denied Sorokunov’s motion for summary adjudication of his PAGA claim regarding section 2751(a), finding he had not shown the Plan was subject to the statute and that triable issues of fact remained.
In July 2024, the arbitrator ruled in NetApp’s favor on every individual claim, finding no breach of contract, no violation of sections 221, 223, or 2751, and no merit to the wage fraud claims. The trial court confirmed the arbitration award in September 2024 and then granted NetApp’s motion for judgment on the pleadings on the PAGA cause of action, concluding that Sorokunov lacked standing as an aggrieved employee based on the arbitrator’s findings.
The Court of Appeal affirmed the judgment in its entirety in the published case of Sorokunov v. NetApp, Inc., Case No. A171964 (March 2026)..
Sorokunov argued that NetApp’s power to unilaterally amend, suspend, or terminate the Plan rendered its promise to arbitrate illusory, relying on Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425. The court distinguished Peleg because NetApp’s modification clause required that any changes be “consistent with and to the extent permitted by applicable law.” Under the implied covenant of good faith and fair dealing, as recognized in 24 Hour Fitness, Inc. v. Superior Court (1998) 66 Cal.App.4th 1199, 1214, and Casas v. Carmax Auto Superstores California LLC (2014) 224 Cal.App.4th 1233, this language prevented NetApp from applying modifications to claims that were known but not yet filed, rendering the arbitration agreement enforceable.
Sorokunov also framed his appeal as a pure question of statutory interpretation, but failed to challenge in his opening brief the trial court’s alternative finding that triable issues existed as to whether his compensation qualified as “commissions” under section 2751. Citing People v. JTH Tax, Inc. (2013) 212 Cal.App.4th 1219, 1232, the court held this forfeiture alone supported affirmance. On the merits, the court agreed that section 2751(a) requires only that the method of computing commissions be set forth in writing, not that the method be purely mechanical, and that NetApp’s Plan met that standard.
Applying the standard from Richey v. AutoNation, Inc. (2015) 60 Cal.4th 909, 916–918, the court reviewed the award for clear legal error affecting unwaivable statutory rights and found none. On section 221, the court cited Prachasaisoradej v. Ralphs Grocery Co., Inc. (2007) 42 Cal.4th 217, 239, for the principle that wage-protection statutes do not prohibit systems where final compensation remains contingent on post-performance events. On section 223, the court agreed the windfall provision was not secret, as it was plainly disclosed in the Plan.
The court followed Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65 and Rodriguez v. Lawrence Equipment, Inc. (2024) 106 Cal.App.5th 645, holding that the arbitrator’s determination that no Labor Code violations occurred against Sorokunov precluded him from claiming aggrieved-employee status under PAGA. The court noted that the California Supreme Court endorsed this approach in Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1124, and Stone v. Alameda Health System (2024) 16 Cal.5th 1040, 1076–1077. The court declined to follow Gavriiloglou v. Prime Healthcare Management, Inc. (2022) 83 Cal.App.5th 595, which had reached the opposite conclusion, and distinguished Prime Healthcare Management, Inc. v. Superior Court (2025) 117 Cal.App.5th 127 on its facts. The court rejected Sorokunov’s policy objection by noting that the judgment had no preclusive effect on the LWDA, which remained free to bring its own enforcement action.
