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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41220
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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I am being sued by a fellow sales rep who is alleging that

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I am being sued by a fellow sales rep who is alleging that we are business partners. I have worked for the same manufacturer for over 20 years. I am a 1099 independent sales contractor. 6 years ago I asked the CEO of the manufacturing company if we could bring another independent rep to help with a large acct I opened. He agreed and after a falling out resulting from many issues including a alcohol problem, it was decided to terminate her. We worked jointly on the accountant and shared commissions. The manufacturer paid each of us every month directly. We had no joint bank accounts, did not file 1065s or K1 and she filed in the state of Washington as a sole proprietor. The manufacturer paid and invested millions in marketing and other expenses on the acct although she and I did split fuel and traveling expenses when traveling together. How can I prove that we never entered into any business partnership and were only paid wages in the form of commissions from the manufacturer?

Thank you for your question. Please permit me to assist you with your concerns.

To answer directly, she is the one that has the burden of proving that you were partners rather than co-employees. She is the one that has to prove partnership, you do not have to prove otherwise. Having said that, if her best is that you split fuel and traveling expenses, that is not a partnership--otherwise anyone who carpools to work is an automatic partner. What you need to focus on are two specific factors.

First you need to focus on everything that is missing--there is nothing in writing, express or implied, that would point to a partnership beyond saving on expenses. As you mentioned there is no formal incorporation or articles of operation, both parties filed taxes separately, got paid separately, and had two separate legal entities, and both were deemed 'independent representatives by the employer'. That will go toward defusing the claim of the other person that there was a special implied partnership or agreement.

The second is intent or implication. Show that you nor the client ever intended fr you both to be partners and you never had such expectation. That will also go a long way in nullifying whatever claims this person may have. But remember that this is all defensive--she is the one that has to prove you were partners, not vice versa.

Good luck

Customer: replied 3 years ago.
Would it be difficult for her to alledged that the sharing of commissions constitutes a partnership?

Thank you for your follow-up, Jenna.

It is very hard to say without knowing what other information, if any, she possesses. By itself a sharing of commissions is not a de-facto partnership, however, it is simply fee sharing or fee splitting. Many professionals, including sales representatives and even attorneys can fee split in many jurisdictions. That does not make either partners. That, by itself, is not enough since there is no express or even implied intent to be partners from that scheme. Furthermore, it may be simply due to the client's demand to pay both for the same work and have the parties independently figure out each person's share. That still does not make it a partnership.

Good luck.

Customer: replied 3 years ago.
If I pay you extra would you have any case law supporting this?

I apologize but the costs of conducting a database search for caselaw is a bit prohibitive for me. As much as I would love to help, that is beyond my abilities beyond a basic search.

Please take care.
Customer: replied 3 years ago.
Are we finished? Have you been paid? Thank you


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