How are commissions earned as an independent contract sales rep to be paid after an employees quits?

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How are commissions earned as an independent contract sales rep to be paid after an employees quits?

I am an independent contract sales rep. I have recently been offered and accepted a salaried sales position with a competitor. One of the companies that I have been representing independently has inferred that they may not pay me the commissions for the orders I have written as an independent rep for this company. The company is in OK; I reside (and worked) in TX. What are my rights and what recourse is available to me to collect these commissions?

Asked on March 22, 2011 under Employment Labor Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

First, as an independent sales representative, your relationship with the company--and it's obligation to pay your commissions--is based on the contract or agreement between you. So, for example, it would be legal to pay you for your commissions earned if you leave; it would also be legal to not pay you, if that's what the contract said. Look to the agreement first.

If the agreement is silent on the subject, as a general matter you should be paid for all work actually done at the agreed-upon rates, though it is probably reasonable for the company to reserve or hold back some amount for bad debts, unconsummated sales, returns, etc. (if, that is, they generally reduced commissions by these amounts) for a period of time, then pay you the remaining balance when they know what sales were good.

If they do not pay you amounts owed (see above), then your recourse is to sue them for the money they owe. You would be suing on the contract or agreement between you, and you'd need to prove the terms  and the sales that you wrote.


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