Sharp-eyed readers will recall that BI‑QEM, owner and operator of certain manufacturing facilities, was featured in the last edition of Agency Sales for the exceptionally “shabby treatment” it directed at Trade Links, its longtime exclusive rep. “In the lengthy annals of sales rep-principal relationships ending badly,” began the last column, BI-QEM’s conduct “deserves exceedingly prominent mention.”

Rather than clean up its act, in the nearly two years of ensuing litigation, BI-QEM stuck to its guns.

BI-QEM’s First Shot Was Not Even Close

To recap, back in 1999, the parties entered into a Sales Representative Agreement or SRA containing an initial … Read the rest

In the lengthy annals of sales rep-principal relationships ending badly, the shabby treatment Elliott Essagof received from his principal deserves exceedingly prominent mention.

The business of Essagof and his Connecticut sales rep firm, Trade Links, LLC, doesn’t roll easily off the tongue. They promote the sale of products in the thermoset and plastics industry, focusing on urea and melamine molding compounds.

For decades, Trade Links represented Claudio Colombo’s companies located in Mexico and Italy. The Mexican facility is owned by BI-QEM Mexico, which Colombo also owns.

BI-QEM and Trade Links entered into a sales representative agreement (SRA) in 1999 that … Read the rest

Tech 4 Kids, Inc., makes toys, but was unable to play to U.S. retailers.

So T4K reached an oral agreement with Northern Group, Inc., an independent sales representative with offices in the Midwest, to promote its toy products. With no T4K market share, the parties understood that Northern would have to enter “pioneering mode” because it would take years to generate sales.

The Parties Reach an Agreement and Northern Sets Out Creating Demand

The oral agreement, reached in 2008, provided that Northern would receive a five percent commission on sales it procured for T4K. Not surprisingly, the parties never discussed … Read the rest

“Money is the most egalitarian force in society. It confers power on whoever holds it.” — Roger Starr, author and urban planning official

Reps who get stiffed on commissions usually agonize over what, if anything, to do about it. After undergoing root canals or tax audits, hiring a lawyer to pursue unpaid commissions usually ranks as a rep’s least desirable course of action.

Some might even prefer the endodontic drilling into a tooth to retaining legal counsel. And without anesthetic.

After all, withholding commissions is an easy and common exploitative tactic utilized by certain principals who view their sales reps … Read the rest

“Hey, Adam,” begins many an incoming office call, “the principal who owes me back commissions didn’t remember that our contract says Tennessee law (or Utah, Colorado, New Jersey, Georgia, etc.) applies. I can get triple commissions, right?”

“Well,” begins the formal, technical response to many such calls, while stalling for time. Then, the very first legal phrase taught in law school is invoked: “That depends.”

Many independent reps are familiar with sales rep protection statutes. These state laws are generally intended to help level the playing field with their principals when a commission dispute arises.

When a rep is terminated … Read the rest

Every experienced rep has stories like this to tell, most often from a relationship with a manufacturer who is not a MANA member.

Two and a half years invested in developing an account while receiving zero compensation, a rep meets with the first stirrings of success. The customer finally agrees to receive samples, and the rep happily reports this development to his partner, the manufacturer. The response is swift: termination. The samples, meanwhile, are on their way directly, and the deal with the customer closes soon after.

After enduring an uncertain relationship for years with a principal who pays late, … Read the rest

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.

Employed for several years as a field sales representative for Paul M. Wolff Co., a subcontractor specializing in concrete finishing services known as PMW, Miller was responsible for facilitating … Read the rest

Some manufacturers will initially consider a sales rep’s commission claim with sympathy, others with reasonableness, and perhaps most with nervous skepticism. Then there is The McGraw Hill Companies, Inc. (now known as McGraw Hill Financial, Inc.), a leading publisher of elementary school textbooks.

McGraw’s former educational division emptied the litigation arsenal in response to a claim brought by longtime independent sales rep, Shawn Kelly & Associates, for unpaid commissions (filed by this article’s author). It took the rep’s gritty determination to stand up for himself against a better funded, give-no-quarter defendant, for whom Kelly had netted millions in sales, to … Read the rest

Most agents properly focus on generating sales after signing with a new principal. Even as corporations constantly merge or get “restructured,” consideration of the potential impact on the agent is rare. Yet several important questions are usually presented:

• Is the independent representative’s commission stream adequately protected?
• What happens if the acquiring party purchases only some of the principal’s assets?
• And could the principal and the new purchaser orchestrate a sale enabling the purchaser to avoid paying commissions due?

These issues were front and center in a case recently decided by a Kentucky federal court after certain assets of a principal … Read the rest

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 … Read the rest