Spitz, The Employee’s Law Firm

Sales Commission Dispute

Sales Commission Dispute

The Employee’s Attorney: Ohio Sales Commission Dispute Lawyers

Commissioned sales representatives and brokers make most, if not all, of their living on the commissions earned on the close of sales. Unfortunately, it is also not uncommon for commissioned sales representatives to have their employer company withhold their sales commission, whether intentionally or by a misunderstanding of its legal obligations. That is where experienced commissions lawyers can best help resolve the dispute.

Commissioned sales representatives often face disputes over their commission after sales are made and their employment ends, either voluntarily or by termination. Our broker-deal and salesperson attorneys are often asked when the commissions become due. Unfortunately, there is no universal answer, and a commission dispute attorney will need to consider many factors, including the contract for commission (whether in writing or oral), the course of the parties past dealings, industry standards, and the applicable state law (which may be dictated by the commission agreement).

For example, while some companies and commissioned sales representatives commonly believe that commissions are only earned or payable when the company receives the payment on the sale, such a condition precedent (receipt of the payment) would have to be expressly stated in the employment agreement. In reality, our commission dispute lawyers have regularly seen commission agreements that simply say that the sales representative is due to a percentage of sales. Under such scenario, the commission should be due upon the sale, regardless of the payment terms with the customer.

Another common example is when a commissioned sales representative, sales agent, or broker signs up a new ongoing client, and the employer attempts to end commissions payments for ongoing business after the employment relationship has ended. Again, the contract for employment (whether in writing or oral), the course of the parties’ past dealings, and the applicable state law will control. Was the employee paid commission on subsequent sales over a period of time? Does the contract provide what happens upon termination of employment? What is the industry standard? These are just some of the issues that our commission dispute attorneys will analyze for you.

When Should I Call?

You should call our employment and sales-force lawyers for a free initial consultation as soon as you find yourself saying or searching the internet for any of the following:

  • The company that I worked for refused to pay my sales commission because I quit.
  • The company that I do sales for is trying to cut my commissions after the sale.
  • I was fired and the company will not pay any of the commissions on the sales that I made before I was let go.
  • I have a broker commission contract that the company unilaterally altered after several years.
  • My sales commission was cut because the customer returned faulty goods.
  • I lost my sales commission because the company could not deliver as promised to the client.
  • I am not being paid my commissions at the proper rate.
  • The company that I sell for will not pay me commissions on renewal sales.
  • The company told me that I have to accept less pay on sales because it had a bad quarter.
  • A manager told me that I have to share my commissions with him because he “participated” in the sale.
  • The company will not pay me unpaid broker commissions from the deals that I brokered.
  • The company will not pay my sales commissions until the buyer pays the last installment in eight months.
  • The company took away my sales commission because I did not give two weeks’ notice before I quit.

Each sales dispute is very different based on the contract and parties that are involved. This means that your best option is to schedule a free initial consultation with a sales commission lawyer. However, here are some answers to some commonly asked questions:

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What Is The Definition Of Commission Under Ohio Law?

Sales Commission Dispute Attorney: Ohio law on commissions is governed by Ohio R.C. § 1335.11, which defines commission as “compensation accruing to a person for payment by another person, the rate of which is expressed as a percentage of the dollar amount of orders, sales, or profits.”

Under Ohio Law, When Must Commission Be Paid After Termination?

Sales Commission Dispute Attorney: Once it is determined what commission is due, Ohio R.C. § 1335.11(C) controls when the employer must pay the commission: “Upon the termination of a contract between a principal and a sales representative for the solicitation of orders for a product or orders for services, the principal shall pay the sales representative all commissions due to the sales representative at the time of the termination within thirty days of the termination and shall pay the sales representative all commissions that become due after the termination within thirteen days of the date on which the commissions become due.”

What Evidence Does A Commissioned Salesperson Need To Make A Case?

Sales Commission Dispute Attorney: Each commission dispute case is different and needs to be evaluated by a commission dispute lawyer on a case by case basis. If you are a commissioned employee (in whole or in part), it is important for you to keep employment contracts, employee handbooks, and any communications with your employer regarding the payment of commissions. Even if you do not anticipate a commission dispute, take as much documentation as you can when ending your employment. If you do not have this evidence with you, do not give up because a commission dispute attorney can get much of the documentation during discovery if needed.

Can A Contract Waive An Employee’s Commission Rights Provided Under Ohio R.C. § 1335.11?

Sales Commission Dispute Attorney: No. Ohio R.C. § 1335.11(F) provides: “Any provision in any contract between a sales representative and principal is void if it purports to do any of the following: (1) Waive any of the provisions of this section; (2) Make the contract subject to the laws of another state; [or] (3) Limit the right of the sales representative to initiate litigation or alternative dispute resolution in this state.”

If I Have To Sue To Get Paid My Commission, Can I Recover Attorney’s Fees?

Sales Commission Dispute Attorney: Yes. Ohio R.C. § 1335.11(D) provides: “The prevailing party in an action brought under this section is entitled to reasonable attorney’s fees and court costs.”

Does Ohio Law Provide For Any Damages Beyond The Commission That Is Owed To Me?

Sales Commission Dispute Attorney: Yes. Ohio R.C. § 1335.11(D) provides: “A principal who fails to comply with division (C) of this section or with any contractual provision concerning timely payment of commissions due upon termination of a contract with a sales representative is liable in a civil action for exemplary damages in an amount not to exceed three times the amount of the commissions owed to the sales representative if the sales representative proves that the principal’s failure to comply with division (C) of this section or the contractual provision constituted willful, wanton, or reckless misconduct or bad faith. If a principal receives a written demand for payment of the commissions owed to a sales representative that was sent by certified mail, the failure of the principal to respond to the written demand in writing within twenty days after the principal receives the written demand shall raise a presumption that the principal acted willfully and in bad faith.” Because of the specific requirements, it is important to consult a salesperson & broker dispute attorney to assist in preparing the certified letter.

When You Have Questions: Call The Right Attorney™

If your employer is not paying you all of your lawfully earned overtime commissions, contact the attorneys at Spitz, The Employee’s Law Firm, today for a free and confidential initial consultation. Or maybe you are being misclassified as an independent contractor. The commission dispute attorneys and lawyers at Spitz, The Employee’s Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to owed commissions that you have not been paid, set up a free initial consultation.Because we know that many clients are not able to afford the costs of litigation up front, we take on more cases on a contingency fee basis than most firms. Contingency fee agreements mean that the client need not pay any fee for legal services unless and until our employment attorneys recover money and/or results on your race discrimination claim.