CA Court’s Remedy for Sales Reps Challenged

California law prescribes various formalities for contracts with sales representatives, including disclosing the rate and method of calculating commissions. Willful violations are subject to treble damages, but the legislature said nothing about non-willful violations. One California court has supplemented this legislative oversight with a remedy for single damages.

The National Association of Manufacturers (NAM), in an amicus letter filed August 20, supports review of this decision by the California Supreme Court, arguing that courts should not make up remedies the legislature did not provide, particularly since normal breach-of-contract remedies are available. The NAM letter also objects to the lower court’s adopting a loose standard of willfulness that could make these suits subject to treble damages and attorneys’ fees.

It’s NAM’s belief the decision creates a trap for unwary manufacturers who do not know about the technical requirements of the law. ◆