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The Spitz Law Firm, LLC

Sales Commission Disputes FAQs

Sales Commission Disputes FAQs

Frequently Asked Questions About Sales Commission Dispute

When you are compensated in multiple ways, it can be easy to have questions. When you are working on a commission, here are a few common issues The Spitz Law Firm, LLC see crop up time and time again:

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.

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DISCLAIMER: These answers do not constitute legal advice or guidance.