Employment Contract -- Sales Commission

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    If you pay your employees on a commission basis, you understand the importance of the contract governing exactly when - and for what - commissions are owed. Unlike with salaried or hourly employees, who get paid on a steady and easily defined basis, commission-based pay is often subject to disputes because when it's earned can be a...
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    When employees or agents who are paid commissions are terminated, there may be a dispute about what, if any, posttermination commissions they should continue to receive. There also may be the accusation they have been terminated to avoid paying commissions they are owed. Two recent Oklahoma Court of Appeals opinions provide...
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    Increasingly, employers are using nondisclosure agreements to protect their vital business secrets, particularly when employees are lured away to work for competitors. Also, as companies compete for the best and brightest, employers are using commission payments based on meeting production or sales goals as an incentive to attract...
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    An employers right to modify the terms and conditions of employment for an at-will employee was recently reaffirmed by an appeals court ruling. The employee claimed that she had entered into an oral agreement with her employer regarding the payment of commissions. In response, the employer successfully argued that the employees...
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    As we reported in the July 1998 issue of New Hampshire Employment Law Letter, the New Hampshire Supreme Court concluded in Galloway v. Chicago-Soft Ltd. that, as a general rule, a person employed on a commission basis to solicit sales orders is entitled to his commission when the order is accepted by his employer. If an employer...
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    Maine law requires employers to pay an employee "in full" within a reasonable time after the employee's termination, and commissions are considered to be wages for purposes of this law. However, the law does not specify whether the employee is entitled to be paid commissions on sales that have been "booked" before the customer...
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    The Arkansas Court of Appeals recently decided that several employees were entitled to a trial on the issue of whether they owed their employer money that had been advanced to them as a draw against future commissions. Since the contract was ambiguous on the issue of refunds, the employees are entitled to argue their case before a...
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    A case involving a salesperson who was fired for poor performance and made to repay commission advances underscores the need for tightly written employment contracts. The decision may eventually lead to an overhaul of a 70-year-old pro-employer Pennsylvania law. Sales rep fails to cover his draw Michael Polons...
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    Employers frequently ask us if there is any way to collect cash advances on loans made to employees who are being terminated. A recent Missouri case illustrates what can be done. Gus Stroder began working for EDP Technologies, Inc., on August 17, 1989, under a letter of understanding. Stroder's compensation was to be based upon...
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