Like other businesses, sales representative organizations are purchased and sold for a variety of reasons. What distinguishes sales representative organizations in the purchase and sale context is that the owners generally do not sell their businesses to unrelated third parties.
In the last week of February 2022, the Electronics Representatives Association (“ERA”) held its much anticipated, long-awaited, first in-person industry event since COVID at the AT&T Center on the University of Texas campus in Austin, Texas.
Akstrom Imports Inc. raised several interesting arguments in defense of the claims brought by Minnesota sales representative Kinneberg Management Group (KMG), including that, as a Canadian distributor, it was not subject to the jurisdiction of a Minnesota federal court. Even if it was, Akstrom continued, Canadian law still controlled, not Minnesota’s pesky sales rep statute.
A sales rep legal column that doesn’t speak of terminations or commissions? That doesn’t mention succession planning or tax issues? Not even a state sales rep statute?
What’s left to discuss?
Well, there’s Walter Blockmon III. Or more precisely, the late Walter Blockmon III.
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.
In the lengthy annals of sales rep-principal relationships ending badly, the shabby treatment Eliot Essagof received from his principal deserves exceedingly prominent mention.
This is the second of two articles on the effect that California law can have on businesses throughout the country and even abroad. Last month’s article delved into California’s recently enacted “AB5” statute which provides an “ABC” test to determine if a worker/service provider is an independent contractor or an employee.
For the prolific sales rep victimized by the withholding of commissions due, few moves will command greater attention from the principal than exercising the lawful self-help remedy of grabbing those unpaid commission dollars, then pursuing litigation.
California has recently enacted a number of new laws that can affect businesses throughout the country, including manufacturers and sales representatives. This multi-part article focuses on two of them: California Assembly Bill 5 (“AB5”), which provides a test to determine if a worker/service provider is an independent contractor or employee, and “Proposition 65,” which addresses environmental and health-related concerns about products sold in California.
Sales reps who make the difficult decision to take action upon suffering a contract breach oftentimes have to settle for the equivalent of a ground rule double. Perhaps the litigation results in recovering the unpaid sales commissions plus interest, but not the exemplary damages teased under a state statute.