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Thanks to a MANA attorney member, MANA, MANA members, and sister associations the Minnesota Termination of Sales Representative Act (Minn. Stat. §325E.37) was successfully amended resulting in greater protection for certain Minnesota manufacturers’ representatives that are covered under this Act.
MANA member Gene Hoff, Minenko & Hoff, P.A., Edina, Minnesota, began the ambitious amending effort last year and realized success earlier this year when the amendment was signed into law by Minnesota Govenor Mark Dayton. The effective date of the amendment is August 1, 2014.
At the beginning of his effort to amend the law, Hoff met with a number of legislators who provided guidance on how to proceed with an amendment as well offering support for the measure if it came to a vote. To assist in the effort, he helped locate Franzen and Moore, a Minnesota government relations firm that offered to take on this effort at a very favorable rate.
Sister Associations
MANA reached out to sister manufacturers’ representative associations and MANA members for financial support. The following were among the associations, independent representative firms and others that supported the effort: MANA, ERA, MAFSI, NEMRA, WAMA, the International Home Furnishing Representatives Association; independent representative firms: EMT Engineering Sales, Inc., Fruens Sales, Grissinger-Johnson Sales, Jobst Inc., Martec, McReps, Inc., Northwestern Power Equipment Co., Inc., Targeted Services; and the law firm of Valentine & Assocs.
“I believe that independent manufacturers’ representatives in Minnesota now have the protection that the Minnesota Legislature originally intended when the original law was enacted in 1990. The amendment precludes waivers and another state’s choice of law provision from circumventing Minnesota’s law.” That’s how Hoff views what was accomplished with the passage of this new legislation.
He continues, “Over the last three years there have been attempts to improve Minnesota’s law. However, those efforts were not able to get off the ground.” The previous attempts included too many changes and in one attempt there was no co-author in the Senate. Then, in January of last year, another bill with essentially the same language was brought forth. It needed to be streamlined to pass both houses of the legislature. A colleague of Hoff’s suggested he contact a governmental affairs specialist. Hoff contacted Jerry Leth, MANA’s vice president and general manager, to learn if there were any funds available for such an effort. “Thanks to the support of MANA and others, we contacted Franzen and Moore and got the ball rolling,” explains Hoff.
“We basically wrote a new bill and made every effort to keep it very simple. We didn’t want to include too many changes that would make it even more challenging to pass in the legislature. The goal was to simply prevent future rep agreements from containing waivers or another state’s choice of law provision from circumventing the protection Minnesota independent manufacturers’ reps have under Minnesota law. All we wanted to do was protect Minnesota sales reps as defined under the Act.” He explains that the effort went through four committees, two each in the state’s house and two in the state senate. During the committee process the legislature made one amendment to the bill regarding contract renewals after the effective date. However, that particular change may be challenged. Hoff expressed a desire in the future for the legislature to further amend the Act to also include independent reps who sell to the end user.
Greater Protection
“The primary benefit resulting from the legislation,” he explains, “is that as of the August 1st effective date there is greater notice and commission protection for independent manufacturers’ representatives in Minnesota who contract with out of state principals. They may not be terminated prematurely without good cause as defined under the statute. If the law is not complied with, reps may also seek reasonable attorney’s fees.”
Vic Moore of Franzen and Moore, adds that “Gene Hoff worked on this for about a year prior to contacting us. Because of the importance of the matter, we decided to take on the effort. Ultimately, what was accomplished was really rather simple. The thought process was if you’re going to conduct business in the State of Minnesota, you’re expected to conduct business according to Minnesota law. Our effort was focused on protecting the Minnesota independent manufacturers’ representative and the sanctity of his contract with principals from other states. We were able to get the law co-authored by members of both parties and get it carried through both houses of the state legislature. It was truly a bipartisan effort.”
As he looks back over the several-year effort to achieve additional statutory protection for independent representatives, Hoff notes that a couple of things come to mind. “This entire effort shows how important it is for independent representatives to be aware of the laws that impact them and for them to have competent legal counsel. Reps should never rest on their own laurels when it comes to interpreting the law or negotiating contracts with principals. It’s critical that whatever contract they have, that they have it reviewed by counsel. And finally, this is certainly an example of the kind of effort MANA makes on behalf of its members. If a rep is serious about being a rep, it’s probably a good idea to become a member of the association.”
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