Adam J. Glazer

Empowered sales rep protects his contract rights; delivers strong jolt to breaching principal

William Valle’s commission lawsuit against Powertech Industrial Co. Ltd. offers a little bit of everything.

Two versions of a contract, changing commission rates, enforceability questions, and the duty of good faith and fair dealing are all raised in this dispute. (So too is the perennial employee v. independent contractor battle, but that part of their contest will be saved for another day.)

The Procuring Cause Doctrine Enables Even Employees to Recover Post-Termination Commissions

This column ordinarily features legal issues confronting independent sales representatives who promote manufacturers’ products, not company reps involved in marketing the services of their employers. However, when Keith Miller maintained he was mistreated by his principal, who also happened to be his employer, it happened in a manner so brazen that all independent reps will not only feel his pain, but will respect and cheer his concerted efforts to get paid.

Sticky Contract Issues Lead Jury To Wrap $8 Million Verdict Around Business-Producing Rep, Including For Future Commissions

It’s an old, even classic dilemma for independent sales reps, but it continues to play out across the country. Fueled by his own sweat equity over long hours and on his own nickel, an industrious rep scores a big customer contract for a principal. Rather than treating the rep to a steak dinner and a pledge to honor its contract by commissioning the rep on this new-found business, a notice of termination is issued. The principal then brushes off the rep: “We’ll pay you everything we owe you as of today, and best of luck in your future endeavors. What’s that? The new contract won’t be signed until tomorrow? You don’t say!”

Pet Product Rep Cleans Up After Manufacturer’s Mess, and Court Won’t Stop Barking About It

In a sales rep contract drafted without attorneys and recently described by an appellate court as “doggone messy,” a pet supply manufacturer and its independent sales representative agreed the rep could be terminated “for cause” only under certain circumstances. As is so often the case, once the rep, Profit Pet, grew sales and the relationship was prospering, the principal, Dogswell, sought to tighten the contract terms and exercise more control. Not surprisingly, Profit Pet resisted, leading to its termination.