The New Jersey Sales Representatives’ Rights Act (NJSRRA)
If you think you are being cheated out of your sales commissions, you should contact this office today for a free consultation. A little-known statute, the NJ Sales Representatives Rights Act (NJSRRA) gives independently commissioned sales representatives important legal protections. These protections extend to after the end date of the contract. Violations of Section 2 of the Act entitle the sales representative to enhanced compensation in the amount of treble damages plus all reimbursement of all attorney fees and costs incurred in recovering the debt owed.
Sales representatives compensated by earned commissions paid by the principal with whom they have a contract, have impasses that only those standing in their shoes could begin to comprehend. Being a successful sales representative is hard work requiring skill, diligence and resilience. They are too frequently cheated out of their commissions especially after their contract ends.
Commonly asked questions regarding your legal rights under the NJSRRA or “Act”
Who is covered under the Act? The NJSRRA applies to any independent sales representative, including remote workers, who contracts with a principal to solicit orders for products or services in New Jersey.
Is “commission” different than an employee’s wage payment? Yes. “Commission” means compensation accruing to a sales representative for payment by a principal, earned through the last day on which services were performed by the sales representative.
How is a commission rate expressed? It’s expressed as a percentage of the dollar amount of orders or sales or as a specified amount per order or per sale.
What is a “Principal”? Under the NJSRRA, a principal means a person (including a person who does not have a permanent or fixed place of business in this State) who manufactures, produces, imports or distributes a product or offers a service; contracts with an independent sales company or other person to solicit orders for the product or service; and compensates those companies or other persons who solicit orders, in whole or in part, by commission.
Are employees of a company covered under the NJSRRA? No, employees are not covered. A “Sales representative” means an independent sales company or other person, other than an employee, who contracts with a principal to solicit orders and who is compensated, in whole or in part, by commission but shall not include one who places orders or purchases exclusively for his own account for resale.
When is payment due to a sales representative after termination of contract? Under Section 2 (2A:61A-2) when a contract between a principal and a sales representative to solicit orders is terminated, the commissions and other compensation earned as a result of the representative relationship and unpaid shall become due and payable within 30 days of the date the contract is terminated or within 30 days of the date commissions are due, whichever is later.
How is “day” and “termination” defined by the Act? “Day” means a calendar day including Saturdays, Sundays and legal holidays. “Termination” means the end of services performed by the sales representative for the principal by any means.
Suppose the goods ordered were not accepted by the principal, delivered, and paid for until after the termination date. Is the sales representative still legally due the commissions? Yes. A sales representative shall receive commissions on goods ordered up to and including the last day of the contract even if accepted by the principal, delivered, and paid for after the end of the agreement. The commissions shall become due and payable within 30 days after payment would have been due under the contract if the contract had not been terminated.
Can the principal terminate the contract to avoid paying the commissions? No. This would be a breach of the covenant of good faith and fair dealing. The NJSRRA specifies that commissions are due within 30 days after the termination of the contract between the sales representative and the principal, regardless of the reason for termination. This prevents principals from terminating contracts to avoid paying commissions.
How does the NJSRRA define liability for Section 2 of the Act?
Section 3 of the Act states that a principal who violates or fails to comply with the provisions of section 2 of this act shall be liable to the sales representative for all amounts due the sales representative, exemplary damages in an amount of three times the amount of commissions owed to the sales representative and all attorney’s fees actually and reasonably incurred by the sales representative in the action and court costs.
If the principal is not located in New Jersey, can I still file the case in a New Jersey Court? Yes, NJ courts have jurisdiction over nonresident principals. The Act specifies that a principal who is not a resident of this State who contracts with a sales representative to solicit orders in this State is declared to be doing business in this State for purposes of the exercise of personal jurisdiction.
Was the waiver I signed concerning parts of the Act enforceable? Can a provision in a contract between a sales representative and a principal purporting to waive any provision of this act be enforceable? No, under 2A:61A-6, waiving provisions of this act is prohibited. A provision in any contract between a sales representative and a principal purporting to waive any provision of this act, whether by express waiver or by a provision stipulating that the contract is subject to the laws of another state, shall be void.
Independent sales representatives should know they have protection from discrimination under the NJ Law Against Discrimination (LAD). The LAD prohibits companies from refusing to contract with or do business with someone on the basis of protected characteristics, such as pregnancy, race, age, etc.
NOTE: This article is not to be construed as giving legal advice, nor should it be relied upon as legal advice. Under § 2A:61A-3(b), where the court determines that an action brought by a sales representative against a principal pursuant to this section is frivolous, the sales representative shall be liable to the principal for attorney’s fees actually and reasonably incurred by the principal in defending the action and court costs.
Let Me Fight for You.
Let me fight for you. Contractual rights are complex issues. If you think you are being denied compensation to which you are entitled, you should contact Hope A. Lang, Attorney at Law today for a free consultation. I accept cases from all over New Jersey. I have represented private contractors and sales employees and was successful in recovering financial compensation for them.
I am an aggressive and compassionate employment law attorney who is experienced in successfully representing all level of private contractors and sales employees. If you think you are being denied compensation, you should contact this office for a free consultation.
Hope A. Lang, Attorney at Law represents workers throughout the entire state, including Hackensack, Jersey City, Newark, Irvington, Orange, East Orange, Trenton, Paterson, Montclair, Elizabeth, North Brunswick, Cherry Hill, Vineland, Union, Plainfield, Hamilton Township, Lakewood, Edison, Parsippany-Troy Hills, Franklin, Lakewood, and every NJ County, including Bergen, Hudson, Middlesex, Essex, Monmouth, Somerset, Ocean, Union, Camden, Passaic, Morris, Gloucester, Atlantic, Burlington, Camden Counties.