Breach of contract is not the only remedy for sales representatives when Ohio companies fail or refuse to pay them the commissions they are owed. A little-known statute, Ohio Revised Code section 1335.11, provides an effective claim for unpaid commissions as well.
Ohio’s unpaid commissions statute requires a company to pay a sales representative all commissions due under a contract within thirty days of the contract’s termination. If any commissions become due after termination, the company must pay the sales representative within thirteen days of receipt. If the company fails to pay all commissions it owes, the sales representative is entitled to “exemplary damages” of up to three times the unpaid amount, provided that the failure was willful, wanton, reckless, or in bad faith. Regardless of its motivation, the company is also liable for the sales representative’s attorneys’ fees and costs, which can easily reach six-figures.
The unpaid commissions statute is a valuable resource for sales representatives who work for Ohio companies. However, it applies only to independent contractors, not employees—a determination that can require a complex legal analysis. Other limitations, such as where the sales were made, may also limit the ability to recover under the unpaid commissions statute. Luckily, other Ohio and federal statutes govern unpaid wages and benefits for employees. Under certain circumstances, sales representatives might also be able to use breach of contract and various related claims to recover unpaid wages and benefits from an Ohio employer. Again, whether those claims would apply depends on a legal analysis by an experienced attorney.
Sales representatives who sell for Ohio companies are entitled to be paid in accordance with the terms of their contracts. When companies do not keep their promises, sales representatives (whether employees or independent contractors) have multiple potential claims to protect their rights.