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Effective Employment Law Lawyers
Is your employer refusing to pay you commissions or bonus pay you earned? Is a non-compete agreement with your former employer preventing your from earning a living? For skilled legal advice, please contact the employment law attorneys of Huizenga & Hergt, P.C., today for a consultation. Our attorneys have successfully represented the rights of employees for nearly three decades. Let us put our skills and experience to work for you.
A. SALES COMMISSIONS
Michigan law enforces commission contracts of sales representatives by providing that all commissions due at the time a contract is terminated must be paid within 45 days of termination. MCLA 600.2961. The statute applies to the sale of goods, which means something tangible, not services. Of course, contracts for services are also enforceable, just not under this statute. The statute provides for Triple damages for the amount of commissions due up to $100,000.00, if it is found that the principal intentionally failed to pay the commissions due within 45 days. An award of attorney fees and court costs is also available to the prevailing party.
Proving the existence of a contract, its terms and breach of its terms is always easier if in writing. Verbal agreements can also be enforceable, particularly if there is sufficient documentation showing the basis of the agreement and its performance. We have successfully handled both written and verbal agreements in this area.
B. BONUS AGREEMENTS
Because employees are terminable-at-will in most situations, employers often take the position that they can do whatever they want without fear of reprisal. They can agree to pay an employee extra money if they achieve a certain goal, then change their minds later and refuse to pay even after the goal is achieved. In fact, once the employee has performed the requirements needed to receive the bonus, the contract has been performed and must be honored by the employer.
This is really not a new legal theory, but is known as a unilateral contract. One party makes a promise; the other party does an act or refrains from doing an act in reliance on that promise. For example, A says to B, “ I will give you $20.00 for cutting my lawn.” B cuts A's lawn. There is now a unilateral contract between A and B and A is liable on his promise to pay $20.00 for the work.
This theory was applied to the employment situation by the Michigan Court of Appeals in the case of Mahnick v. Bell Company, 256 Mich App 154 ( 2003). Although every employment situation will have its own unique set of facts, employees are not without recourse if an employer violates a verbal contract.
C. NON-COMPETE AGREEMENTS
Michigan and many other states recognize the validity of agreements which prohibit employees from obtaining employment from a direct competitor after termination of employment, or setting up their own business in direct competition with the former employer.
The agreement not to compete must be “reasonable as to its duration, geographical area, and type of employment or line of business.” MCLA 445.774a.
The important thing to remember is that these agreements are enforceable even if the employee is involuntarily terminated! Employees sometimes assume that these agreements only apply if they leave voluntarily; this is not the case
The statute itself does not define what is a reasonable duration for a non-compete agreement, nor does it specify a reasonable geographic area or reasonable limitation on type of business covered. What is reasonable is determined on a case by case basis by the courts as these agreements are litigated. What is reasonable in one business may not be reasonable in another. There are no hard and fast rules or guidelines, only case by case interpretation by the courts which evolves and changes.
Non-compete agreements are especially onerous when an employee is involuntarily terminated. An employer can prevent an employee from working in his profession for a year or more, depending on the business. And the employer is not required by law to provide the employee severance pay during this time.
Although non-compete agreements are legal, we think they are unfair and fight to have them eliminated or reduced and have the employer extend severance pay throughout the time the non-compete agreement is enforced.
Don't Wait to Talk to an Attorney
For high quality legal representation and responsive client service, contact the employment law attorneys at Huizenga & Hergt, P.C., today.
From our offices in the historic Penobscot Building in Detroit, Michigan, our firm has represented clients in the following states: Arizona, California, Colorado, District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas and Virginia.
