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MDLaw
MDLaw, Attorney
Category: Business Law
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Experience:  Experience in business law, contract law and related matters.
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I am an independent sales representative in AZ and need to

Customer Question

I am an independent sales representative in AZ and need to sue for non payment of sales commission. What is the law in Arizona, is this a civil proceeding and what is the statute covering non payment of commissions to an indepentent contractor?
Submitted: 1 year ago.
Category: Business Law
Expert:  BizIPEsq. replied 1 year ago.

TheLegalistEsq :

I will be assisting you. Let me review the question.

Customer:

I'm still waiting for a response

TheLegalistEsq :

what county / city in Arizona were you in do you reside in? (it makes a difference s to which court to go to)

Customer:

I live at Grand Canyon, AZ, in Coconino county but the principle place of business is in Phoenix, Ax, Maricopa county

TheLegalistEsq :

in addition, was there an employment agreement between you and the company. Finally for now, what state and county/city is the company based?

TheLegalistEsq :

I did not see your reply. Thanks

Customer:

no written contract, only verbal sales rep agreement. I have been working as a sales rep for this company since 2007. His place of business is pHOENIX, az , mARICOPA COUNTY

TheLegalistEsq :

thank you

TheLegalistEsq :

is the amount they owe you less than $10,000 or more?

TheLegalistEsq :

in addition, were a W2 employee + commission? Were you commisson only? How long did you work for the company?

TheLegalistEsq :

I believe you are trying to enter the chat. If you are having problems with your browser we can switch to Q&A format. If possible let me know or alert the site of the difficulties you are having

Customer:

Commission only, Independent Sales Rep. I have my own rep company where I represent several other companies. I have been working for the company since 2007. Yes, a current balance owed from 2011 commissions approx $ 12,000 and now $24,000 for all of 2012. This company has been struggling to pay me for the past several years. It is a small scree n print tee shirt company selling to Resort & Souviner gift retailers.

Customer:

I am still currently working for this company but obviously I am in a tough situation. If I continue to sell for him, he stays in business and attempts to pay back commissions, but each year I have sold less because I am not being paid

Customer:

still waiting for answer

Customer:

I am not familiar with this site....I thought I was suppose to be in chat. I would much rather work in a Q & A format. Let me know what you want

Customer:

I really need to know, what happens if I sue for payment and how to go about it? If I decide to sue obviously I need to stop working for this company. Right now I am trying to set up a payment plan with several options with my last option taking him to court.

Expert:  MDLaw replied 1 year ago.
It appears that your previous expert is offline. If you wish to wait for him to come back online, let me know. Otherwise, I'd be more than willing to help you this evening. Just post which you would prefer. Thanks. I apologize that you were having difficulties with the site.
Customer: replied 1 year ago.


If you could help me that would be great, since I am still waiting on an answer

Expert:  MDLaw replied 1 year ago.
You have asked the following:

"What is the law in Arizona, is this a civil proceeding and what is the statute covering non payment of commissions to an indepentent contractor?"

Yes, suing for commissions owed to you would be a civil matter. It is a contract law issue and so there is no particular statute that would address it since you are not an employee but are instead, a self-employed independent contractor. Since the amount you are owed is significant, you cannot sue in small claims court. Therefore, you may want to consider hiring an attorney to assist you with your matter since you will be required to follow all of the civil procedure rules in court (whereas in small claims, you don't). You also want to keep in mind that there is a statute of limitations and so you don't want to end up in a situation where they are stalling you just so that they can get past the SOL.

Please let me know if you need any additional information.


 

Customer: replied 1 year ago.


Ok, so what would be the SOL on moneys owed?


And can i represent myself?

Expert:  MDLaw replied 1 year ago.
The SOL is 3 years if there was an oral contract and 6 if there was a written agreement.

You can represent yourself but it would be more difficult since you would be expected to be familair with discovery rules and civil procedure rules and your opponent would most likely have an attorney.

Expert:  BizIPEsq. replied 1 year ago.
Unfortunately my colleague is incorrect. The SOL (Statute of Limitation) in Arizona for unpaid wages is 2 years. It's three years only in the case of a willful violation.

My colleague further incorrectly categorized your employment question as a contract question. Arizona is a "at-will employment" state which means that unless there is a specific written employment contract, the employer can hire and fire for any reason, other than discriminatory reasons, and the employee can leave any time they want. Therefore the reference to oral contracts is incorrect as in Arizona there is no implied-contract in connection to employment.

I asked important questions as to the amount in controversy, how many hours you worked each week and the amount you got paid each week because in addition to the back pay owed your employer may also have been in violation of wage hour laws if they paid you less than minimum wage.
Expert:  BizIPEsq. replied 1 year ago.
I asked important questions as to the amount in controversy, how many hours you worked each week and the amount you got paid each week because in addition to the back pay owed your employer may also have been in violation of wage hour laws if they paid you less than minimum wage.
Expert:  MDLaw replied 1 year ago.
I apologize for the fact that TheLegalistEsq did not pay attention to the details in your question. I assure you that is not the norm for this website.

As you clearly stated in your initial post, you are an independent contractor and not an employee. My colleague here at Just Answer apparently did not pay attention to that very important fact. Since you are an IC (independent contractor), employment laws do not apply to you which is why this is in the Business Law section and not employment law section. As an IC, you are not an employee. Per what you yourself stated, you run your own business where you have several clients and this is but one of your many clients that has failed to pay you. My colleague mistakenly thought that this company was your employer as opposed to your client. Again, my apologies for his mistakes and please do not hold his mistakes against me or the Just Answer website.

MDLaw, Attorney
Category: Business Law
Satisfied Customers: 5852
Experience: Experience in business law, contract law and related matters.
MDLaw and 8 other Business Law Specialists are ready to help you
Customer: replied 1 year ago.


Ok, MD LAW does have the information correct and i would like to continue figuring this out with ONLY MDLAW...thank you for watching these posts and understanding.


So with this said and i only have 3 years to file for unpaid commissions. What type of suite would this be if i started the paeprwork and then hired a laywer to help fight the battle.


I also do not believe this company would hire a lawyer since he cant even pay me or his other employees and i think he may file bankruptcy SOON!


 


also need to know how much i can file for in allowable damages besides the 37,000 owed on past commisssions

Expert:  MDLaw replied 1 year ago.
It would be a civil lawsuit in civil court for unpaid commissions owed to you which ultimately falls under contract law.

Under contract law, you can only file for damages that are foreseeable and caused by the breach. In other words, unlike a wage claim, you generally can't get liquidated damages unless there is a clause allowing for such in your agreement with them.


Customer: replied 1 year ago.


ok, but I have no written contract...as is the norm with resort gift reps working on commission only for smaller screen printers. So do i have any grounds without a contract? I can prove my sales and the 13% owed on those just from old emails agreeing to the 13% commission.


And if damages are hard to prove...what is the maximum interest rate I can impose? And i do have hardships, that I had to go into debt management program since I wasn't receiving my full expected commissions, would that be valid hardships for a monitary value? .


Overall I would like to know what I am talking about if he refuses to pay my proposed options and don't want to give any threats of court... but i want to sound like I can follow through with civil action if neccesary. ( and win)


So just making sure I have a leg to stand on, how to proceed if necessary and how much i should ask for?

Expert:  MDLaw replied 1 year ago.
A contract can be oral. How much in commission you are owed would be based on what the practice was with commission payments. Those emails could constitute an agreement as well.

With contracts, you only get would put you back to the position you would have been in had the contract not been breached. Therefore, you cannot get additional damages unless they are connected to the breach. You are, of course, free to ask for more than what is owed. It's done all of the time. You simply need to make sure you can argue a connection to the breach.

I cannot tell you how much to ask for since we are prohibited from giving any kind of legal advice on this site since it would be a violation of most states' professional ethical rules. We can only provide information, per the disclaimer on this page.

Thank you so much, by the way, for your positive rating. It is very appreciated!



Customer: replied 1 year ago.
Ok, we'll I guess I have enough information to proceed with either a payment option or lawsuit. Going to make one last chance for principle to pay what's owed and will get it signed if he agrees to my options. Otherwise I have to file a civil suit an I guess hire an attorney , though my father used to be in same situation and never hired an attorney. But I have no idea what paperwork to file and how to word it.
Thank you for your help... Guess I take it locally from here
Expert:  MDLaw replied 1 year ago.
You don't have to get an attorney but it would help you greatly snce the civil procedure rules and discovery rules need to be followed.

Good luck!

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