Independent Reps Earn Legal Victory
Edition: September 1999 - Vol 7 Number 09
On June 25, 1999, Moore & Kimmey, a Texas rep firm that had been terminated, was awarded more than $650,000 in unpaid commissions and attorney fees. It was the first case ever to be tried under the Texas Sales Representative Act.
In Moore & Kimmey vs. Price Pfister, a former sales agency representing a line of faucets manufactured by Price Pfister, a subsidiary of Black & Decker, brought suit alleging that the manufacturer had improperly cut its commissions by half. The claim, which was based on an oral contract, arose after the rep agency repeatedly protested the commission cut.
Represented by the Rydal, PA law firm of Mitchell A. Kramer and Associates, the sales agency not only succeeded on its contract claims, but it also recovered under the Act, which provides for an award of three times the actual amount of unpaid commissions and attorney fees if a sales representative is not paid commissions to which it is entitled within 30 days of being terminated.
Attorneys for the rep agency successfully argued that because the manufacturer had improperly cut its commissions and had failed to pay the full amount of commissions owed within 30 days of termination, the rep agency should recover under the Act.
Texas is by no means the only state to have passed statutes protecting sales representatives and distributors. Some of these statutes require manufacturers to provide written contracts and to pay commissions within a certain period of time after terminating a rep. However, few cases have been brought under such statutes.
Protect Your Rights
Reps can take steps to protect their rights, advise the Kramers:
For additional information, contact Mitchell Kramer at (800) 451-7466 or Barbara Kramer at (734) 327-9822.