The Michigan Sales Representatives Commission Act (“SRCA”), MCLA 600.2961, (Click here to view) provides protection for sales representatives from the company he is selling for (“principal”). The statute provides that representatives are to be paid what they are owed in a timely manner, and that intentional non-payment of commission by the principal will result in “an amount equal to 2 times the amount of commissions due” up to $100,000.00. According to the statute, a sales representative cannot waive his or her rights under the SCRA by signing a contract.
A recent Michigan Court of Appeals ruling in the case Reicher v SET Enters, Inc (click here to view) decided that a settlement agreement between the representative and principal after the representative was terminated and had filed a lawsuit against the principal can negate the non-waiver rule. In other words, when Reicher decided to settle his claims against the principal he signed away his rights to protection under the SCRA. When the principal breached the settlement agreement, the statutory penalties under the SCRA did not apply. Reicher was limited to the damages for breach of contract.
The non-waiver provision will still apply to a contract or agreement establishing or modifying the business relationship between the principal and the sales representative, but does not apply to post-termination agreements.
