Managing a high performance sales team in Florida requires airtight employment contracts. When a sales professional leaves your company, you want to avoid a dispute over commissions that results in a costly lawsuit.
Florida law often favors the specific language of a contract. Because of this, the way you draft your commission policy or agreement can protect your business from unnecessary financial risk. Employers can minimize conflict by addressing these three critical areas in their written agreements.
Review the agreement milestones
To protect your company, your agreements must clearly state exactly when a commission is earned versus when it is merely accrued. Without a precise definition, a court might decide that your employee earned a commission much earlier in the sales process than you intended.
Strong agreements define triggers like contract execution, product delivery or final payment. These milestones create a clear roadmap and eliminate guesswork for your team.
Evaluate the active employment clause
Many sales roles include clauses stating you must be an active employee when the company distributes the money. Florida courts will enforce such provisions. However, in the absence of a written policy or agreement, an employee may be entitled to post-separation commissions if the employee already finished every task required to earn the commission.
Clarity serves as your best tool if you face a dispute over unpaid pay. Florida courts often treat commissions as wages. This classification matters because a judge may order the company to pay for the lawyer and legal costs of the other side if you lose a case.
Analyze the procuring cause doctrine
Under the procuring cause doctrine in Florida, a salesperson may be entitled to a commission if their efforts were the primary reason a deal closed. This default rule applies if the individual initiated the chain of events leading directly to a sale and the contract is silent on the matter.
However, express contract terms will always control the outcome if they exist. Florida law also requires a claim for unpaid wages to be brought within two years. Waiting longer may result in a barred claim even if the dispute is called a breach of contract.
Protect your business interests
These rules depend heavily on the exact wording of your agreement. Identifying which way applies to your situation is the first step in resolving a dispute. A single word in a contract can be the difference between a dismissed claim and a judge ordering your company to pay legal fees.
Proactive legal review is essential whether you are drafting a new policy or updating an old one. Consider speaking with a local attorney to learn how these laws apply to your case.