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ScottyMacEsq
ScottyMacEsq, Lawyer
Category: Employment Law
Satisfied Customers: 11710
Experience:  Licensed Texas General Practice Attorney
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when terminating an independent rep, in the state of Illinois,

Resolved Question:

when terminating an independent rep, in the state of Illinois, who is in violation of his contract (non performance) can we withhold his final commission until rep returns all company property such as records: contacts, leads, status of account etc ?
Submitted: 1 year ago.
Category: Employment Law
Expert:  ScottyMacEsq replied 1 year ago.

ScottyMacEsq :

Thank you for using JustAnswer. I am researching your issue and will respond shortly.

ScottyMacEsq :

I'm sorry to hear about your situation. I assume this independent rep is being paid as a 1099 contractor, rather than a W2 employee? Is there are specific clause in the contract pertaining to the final paycheck?

ScottyMacEsq :

(or when commission will be paid)/

ScottyMacEsq :

Did you see my follow up question to your issue?

ScottyMacEsq :

My apologies, but I must assist the other customers that are waiting. Once you respond to my follow up question, I will respond as soon as I can. Please note that I may be assisting other customers or otherwise out of the office (depending when you respond). Thank you.

Customer:

rep is 1099 no specific clause in contract regarding final pay

ScottyMacEsq :

Sorry for the delay, I was assisting another customer at the time. can you tell me whether or not there is a clause regarding payment of commissions earned generally speaking?

Customer:

1099 with no clause regarding final check

Customer:

none

ScottyMacEsq :

How often have you paid the earned commissions? Have they been done on a regular, specific basis?

Customer:

monthly

ScottyMacEsq :

Can you tell me how long this contractor has been working for you?

Customer:

two years

ScottyMacEsq :

Thank you. It's a bit more difficult in the situation when you have a 1099 employee than when you have a W-2 employee. State law specifically and provides for final paychecks for W-2 employees but does not for contractors. The terms of the written contract will control over anything else, however where there is nothing in that written contract, that's often where these things go to court. the fact that you have been paying the contractor on a monthly basis for two years establishes a course of conduct, that can generally only be deviated from in exceptional situations.

ScottyMacEsq :

Unfortunately there is not a clear answer, however if the contract specifically provides for payment of commissions, but does not specifically provide for return of the company property, he could sue you for return of that commission if you did not pay it (even if you would pay it upon the return of that company property).

ScottyMacEsq :

That is, you would have a contractual obligation to pay that commission, but he would not have a contractual obligation (even though he would have a legal obligation) to return the company property.

Customer:

don't you the violation of the terms of the contract is an exception

ScottyMacEsq :

So he could sue for breach of contract if you did not pay, even if you did have a good reason (the fact that he still had the company property).

Customer:

he already breached the contract and this was our recourse

ScottyMacEsq :

as for his violations of the contract, often it is fought over whether or not this is case and whether or not he actually violated the contract. If he did violate the terms of the contract in your further obligations would be relieved. However, any commissions that have been earned would still have to be paid pursuant to the terms of the contract.

ScottyMacEsq :

Understood. But to the extent that he is still do commission payments, up to the breach, those would have to be paid pursuant to the contract.

ScottyMacEsq :

(he is still due)

ScottyMacEsq :

By the way, I apologize for any errors in this answer. I am using a voice recognition program, and while it is accurate most of the time, is not 100% accurate, so if there's something that doesn't look quite right, or appears out of place or not grammatically correct, the reason is likely the software that I'm using. If will try to catch any errors, but if if you need clarification at the end, please let me know.

Customer:

ok thanks

ScottyMacEsq :

Now as a practical matter, if it is clearly and unambiguously a breach of the contract (such as there are very specific situations that are written out in the contract that would establish that this would be non-performance) that would be one thing. However, often nonperformance is in the eye of the beholder, and the first thing that is fought about is whether or not there is a breach of contract in the first place.

ScottyMacEsq :

in any event, you would want to comply with the terms of the contract as best as possible, but not so far as to imperil your own case...

ScottyMacEsq :

(even if he was in breach of that contract), except unless and until you cold show clearly that he is no longer performing at all.

ScottyMacEsq :

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!

ScottyMacEsq :

Did you have any other questions before you rate this answer?

Customer:

no

ScottyMacEsq :

Sorry, I was still in info request mode.

ScottyMacEsq :

You can rate now. Thank you, XXXXX XXXXX good luck to you!

ScottyMacEsq :

Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!

ScottyMacEsq, Lawyer
Category: Employment Law
Satisfied Customers: 11710
Experience: Licensed Texas General Practice Attorney
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