I joined Bill Wright’s law firm in 1995, and within a year I was defending a manufacturer who had been sued for additional commissions by its former sales representative. Over the years, I’ve represented clients on both sides of these disputes. Currently, Evan Chall and I are suing a German company in Wayne County on behalf of a local sales rep, and we’re defending an Indiana corporation in arbitration with a Michigan agency. Just like divorces and slip-and-falls, commission disputes never seem to go out of style.
Why are these cases so common? Two reasons, I think. For one, Michigan has very agent-friendly legislation on the books. Under the Michigan Sales Representative Commission Act, an aggrieved sales rep can recover not only unpaid commissions, but also attorney fees and punitive damages up to $100,000. So there’s a lot at stake.
The second reason? Plain old sloppiness on the part of manufacturers and reps alike. A well-drafted agent agreement - and careful adherence to its terms - will avoid most of the headaches that come with litigation under the Act. But who wants to fuss with those details when the relationship is still in its honeymoon phase and there’s money to be made?
If you’re a sales representative or if your company sells through sales representatives, you might want to pull out your contracts and review the fine print. What’s that? You don’t have a written contract? You might want to do something about that, too. If you need help, give us a shout at (248) 477-6300 or visit our website.