GNYADA February 2017 Newsletter

Commissions Can Be Decreased Due to Negative Sales Growth

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The Seventh Circuit Court of Appeals has ruled that an employee’s commissions may be decreased due to negative sales growth. In the case, Cohan v. Medline Industries , two sales reps sued the company for factoring sales declines into their commission calculations. They argued that their commissions for slow-sales years should have instead been zeroed out, as declines could be caused by factors outside their control, such as unusually bad weather or an already softening market at the time they were hired. The court, however, ruled that

decreasing commissions was a valid way to incentivize salespeople to contribute to annual business growth. What this means for New York dealers The court applied New York law in making its decision. This ruling will now be persuasive in future New York court cases. The ruling confirms that a dealership may adjust salespeople’s commissions — either up or down — to account for sales performance, as long as those calculations are specified in the written commission agreement. For

example, Medline’s commission agreement, which was signed by both sales reps, specifically stated that commissions would be earned based on sales growth, including negative growth. A sample commission agreement is enclosed, for dealerships' reference and use. We thank GNYADA's Employee Relations Plan (ERP) for providing this.

Important New York International Auto Show Dates

The Auto Show team is gearing up for a spectacular 2017 New York International Show, with lots of big announcements expected in these months leading up to the Show. Here are some important NYIAS dates:

Press Days April 12 & April 13

GNYADA Dealer Preview PARTY! April 13

Public Days April 14 – April 23

Opening Day Ceremonies April 15

National Automotive Technology Competition Automotive Career Fair April 18 & April 19

World Traffic Safety Symposium April 21

Greater New York Automobile Dealers Association • www.gnyada.com

The Newsletter • February 2017

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