Sunday, January 26, 2014

Timeshare Sales People Sued by Timeshare Company for Previously Paid Commissions

A timeshare company has filed a lawsuit against dozens of its former sales people to recover previously paid commissions, $15,000.00 or more in some instances. Here is a link to a recent article. It appears that the contracts of the sales people allows the timeshare company to take back previously paid commissions under certain circumstances, despite that some of the sales people have not worked with the timeshare company for years.

The timeshare sales people are classified as independent contractors and work on commissions; they are not classified as employees. The timeshare sales people have independent contracts with the timeshare company. These types of contracts are often written by the timeshare company and have terms favoring the timeshare company over the timeshare sales people.

Pursuant to the contract between the timeshare sales people and the timeshare company, a certain percentage of the timeshare sales people's commissions are set aside into a "reserve" account. The timeshare company has filed the lawsuit against its timeshare sales people because there was not enough money in the reserve accounts to satisfy other obligations.

Classifying timeshare sales people as independent contractors and not employees appears to be common in the timeshare industry. Sales people often have independent contracts that govern their rights and responsibilities. They contain terms describing reserve accounts, paybacks, bonuses, and indemnification clauses.

Timeshare sales people often do business as themselves, sole proprietors of their personal business of selling timeshares for a timeshare company. And so they are sued as themselves, personally. One lawsuit follows another, and in the end, the timeshare company looks to the timeshare sales people for money.