Am I right? (Issue with former Employee)?

Dana A

If you had an agreement to pay her the bonus, I don't think you can refuse to pay it if she violated another part of the contract that didn't cause you financial harm. If the bonus was discretionary, then you can refuse to pay it.

Dana (Attorney)

She's either an employee or she's self-employed. She can't be both.

If she had a sales commission agreement contract with you then you owe her. If not, she can go jump.

Joe R

When terms and conditions are not contractually agreed upon in writing by both parties the situation you find yourself in not uncommon.
Was there a "not to compete" agreement in place ?
Where the products she was selling to your clients similar to your products or were they so different that your business would not be negatively impacted.
What was the reason for her sales to decline ?
She has been let go. Is it her understanding that she was let go due to lack of sales or let go due to the fact that she was selling other products ?
If she was self employed, she does have the right to earn a living by selling as many products as she chooses. Providing she has not broken any terms with you. This is how most manufactures reps earn their living.
If her bonus was based on sales which she made for you,
you have benefited. I believe she earned her bonus and should be awarded accordingly.
She is now out of your hair and you should be thankful for lessons learned.

BillyBiggs

You are about to open a can of worms you don't want to. If I understand you correctly she was self employed? Sub contractor? You can't control her this way. If she was an employee you couldn't even fire her under the rules fire-at-will. You just claimed you had a contract with terms and conditions. If she was a sub contractor you would not fire her you just would contract out anymore work to her. Since you fired her you were legally required to pay all wages with-in 24 hours through the normal payment process. Now she without a doubt (in MN) is owed 2x her average earnings for each day you failed to pay her up to 30 days. I bet there is even more you might need to worry about. She earned it pay her and move on.

zenmaster55555

A verbal contract is binding ...... representing her own product with yours is a conflict of intrest .. i doubt she will press charges in small claims court but if she does counter-sue her to disclose how much she made pushing her product while she was stealing your customers.

john n

Unless your agreement with her expressly prohibited her from selling her own product as well, you didn't have grounds to let her go, and you most certainly don't have the right to withhold monies that she earned fair and square under the terms of your agreement.
I suggest to you that the money involved in this matter is probably quite negligable, and not worth damaging your reputation for. If you lose sales or can't get top-notch reps because there's questions about your integrity as a bussinessperson, you're out a lot more than the peanuts the one week's bonus amounts to.
My advice to you is to look at the big picture and ask yourself if the amount of the bonus is worth having a competitor in your line of work having a reason to badmouth you.

Bwana

In very basic (general) terms, here's some information you may find worthy of your consideration:

POINT NUMBER 1: You have two choices: 1) you can hire someone as an employee of your company and withhold taxes or 2) you can hire someone as a contract labor/services; she would not technically be an employee of you company, you do not hold out taxes or provide any benefits, and you have, under the law, regarding this type employment, absolutely no right of exclusitivity with respect to her services; she is free to provide her service/products to others anywhere-any time.

Under option number 2, above, your terms and conditions of employment are not relevent. Even if they were, and they are not, you'd still owe her for services rendered including wages and the bonus.

POINT NUMBER 2: Any employee is entitled, under law, to wages/bonuses earned (the week of selling you mentioned).

The only person who will regret your actions, and her filing legal with a state agency against you will be, I'm sorry to say, you, and for the reasons above stated.

Some states are Employment at Will states: an employee can be terminated with or without cause. If you state has Employment at Will, your termination of her should not cause you any problems. However, if your state employment bureau and/or the state's unemployment agency does not recognize the nature of her employment to be one of contract labor (remember the law), and they may not, you will not only owe her the wages and bonus, but you may also owe the state/fed taxes based on the pay she received, not to mention any penalties or fines imposed. And, she can apply for unemployment benefits which will probably be charged against your employer account.

If she's only in the threatening stage, and hasn't filed against you, you may want to consider paying her the weeks wage and bonus (your going to have to anyway) and have her sign a release of liability stating that she has been paid in full by your company all monies due her for services rendered via employment/contract. If you pay her, and verify same, she will have no cause or basis for filing against you with the appropriate state agency. Trust me: you don't want her going there.

eyecue_two

Was there a no competition clause in her contract when you hired her? If there was not and what you say is that you just told her, you will lose. In labor court rulings, if it was not written down and agreed to, the courts have a position on the issue that "it never happened."

brother_lu

yeah, you fired her with good cause, don't give her the money

Rommel

you are perfectly right. she was being paid by you to sell your!! product, not her own. its completely unacceptable. every second spent selling her own product was a second spent on your pay roll. you did the right thing. she has no claim. i would ad that if this fool is threatening legal action. you might want to gather a few witnesses.

gc27858

yes you did the right thing by letting her go. But if you owe her a bonus, you need to pay her. Usually bonuses are based off sales and contributions made to your company. So if your terms and conditions stated that she will receive a bonus if you reached x amount of sales, you owe her the bonus because she still made your company money. By holding back pay, that is illegal and you can get in deep trouble over it. If she worked purely on commission, pay her the bonus and close your relationship with her. If she was paid hourly or salary plus a bonus, see if you can get reimbursed for doing her private business on company pay. Or you can just tell her you are calling it even because you paid her the salary when she was working for her own company. For one week, I doubt she will go through the expense of hiring a lawyer. But the judge at small claims will ask these questions and make a judgement based on what he/she thinks is fair for all parties. Good luck.

stewie griffin

what goes around comes around

Big Bobby Clobber

If she did the required work, and earned the bonus, you have to pay her.

That being said, you can sue her for stealing your confidential client list.

Next time, when you hire a sales rep, make them sign that they are selling exclusively for you.

PinHead

yeah you do have a right if she has broken a contract verbal or otherwise, and yes verbal agreements do hold up in court but you also need to have laid out any penalties for doing this too or she could claim its unfair

nickeypia18

I think you should sit down and really think about this because if it was a verbal agreement you have no proof that it was said even less agreed on. I do not understand why you had a verbal agreement on that instead of a written one like any other employer would have done, for this exact reason. To cover themselves in case something like this ever happend

Michael C

It would be really hard for you to prove anything if the terms were given to her verbally. As a practical matter, you probably need to pay her.

letsgo

surely u shuld kno better then me in these situations, but I advise u to get a lawyer, think about it pay bonus or pay lawyer?

Vincent B

Why did you verbally lay them out and not lay them out in your contract with her? That is a lesson learned the hard way!

How much is the bonus and is that written down in contract? If it is less than Â£5k then she will need to sue you through the small claims court and this could be difficult if she has no proof.

Enter Your Message or Comment

User Name:
User Email:
Post a comment: