QUESTION:

Hello Ken,

I just hired a new sales person who is working on 100% commission (no salary). Do you have a contract for this type of sales person that I could purchase?  Of course I need to protect my existing customer base and ensure if he moves on he does not go after my customers for a specific length of time. Right now he is working for me and going after some of his old customers from his previous employment because he worked without a contract.  Any help would be very much appreciated.

John

*********

ANSWER:

    You would be wise to have all employees sign an employment contract.  It's good company policy.  You can get an employment contract form at www.alarmcontracts.com.  It's inexpensive and fairly comprehensive.

    The employment contract requires you to fill in the employees duties and benefits.  For commission salespeople it makes it clear that draws are loans, not non recoverable advances.  It makes clear that employment is "at will", which means terminable at any time and for no reason.  Be careful not to violate discrimination laws however, even with an "at will" employee. 

    Some states, New York included, require written employment contracts for commission salespeople, specifying how the commission is calculated and paid.   The penalty in New York for  not have a written contract is that when a dispute arises the version given by the salesperson will bind the court. 

    The employment contract has a provision that prohibits the employee from competing during and after the employment, and does specify that the employer's business information, customer list, etc, is proprietary and confidential. 

    My form also provides for the employee authorizing the employer to monitor telephone and internet, which is sufficient consent, even though it may be that employers have the right to monitor their own equipment for business purposes.

    There is no downside to using the Employment Contract, and you should make it company policy to get it and use it.

****************