Michigan Sales Representatives Commission Act Waiver Bar Does Not Apply to Settlement

The Michigan Sales Representatives Commission Act (SRCA) voids any provision in a contract waiving any rights under the SRCA.  MCL 600.2961(8).  The Michigan Court of Appeals recently strictly construed this to limit it to contracts between a principal and a sales representative, holding that the prohibition does not apply to a settlement agreement of claims under the SRCA.  Reicher v SET Enters, Inc., Docket No. 278907 (May 12, 2009).

This should guide a careful reading of any settlement agreement related to a SRCA claim and caution attorneys dealing with such claims and settlements to fully inform their clients of any rights they may be foregoing under the SRCA by agreeing to such a settlement.  The waiver in the above case effectively kept the salesperson from pursuing penalty damages and attorney fees under the SRCA.