THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY McILHINNEY, ALLOWAY, BOSCOLA AND PIPPY, MAY 28, 2009

REFERRED TO LABOR AND INDUSTRY, MAY 28, 2009  

AN ACT

Amending the act of December 21, 1988 (P.L.1881, No.184),

entitled "An act providing for agreements between sales

representatives and their principals," further providing for

definitions, for noncompliance and for applicability.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 1 of the act of December 21, 1988

(P.L.1881, No.184), entitled "An act providing for agreements

between sales representatives and their principals," amended

December 21, 1998 (P.L.1305, No.173), is amended to read:

Section 1.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Commission."  Compensation accruing to a sales

representative for payment by a principal[, the rate of which is

expressed as a percentage of the dollar of orders or sales].

"Principal."  Any person who does all of the following:

(1)  Engages in the business of manufacturing, producing,

importing or distributing a product for sale to customers

[who purchase such products for resale].

(2)  Utilizes sales representatives to solicit orders for

such product.

(3)  Compensates sales representatives, in whole or in

part, by commission.

"Sales representative."  A person who contracts with a

principal to solicit [wholesale orders from retailers rather

than consumers] orders for products or services and who is

compensated, in whole or in part, by commission. The term does

not include one who places orders or purchases for his own

account for resale or one who is an employee of a principal.

"Termination."  The end of services performed by the sales

representative for the principal. The term includes any action

that concludes the relationship of the parties.

Section 2.  Section 5 of the act is amended to read:

Section 5.  Noncompliance.

(a)  General.--A principal who [willfully] fails to comply

with the provisions of section 3 or 4 shall be liable to the

sales representative in a civil action for:

(1)  All commissions due the sales representative, plus

exemplary damages in an amount [not to exceed] equal to two

times the commissions due the sales representative.

(2)  The cost of the suit, including reasonable attorney

fees.

(b)  Frivolous actions.--If judgment is entered for the

principal and the court determines that the action was brought

on frivolous grounds, the court shall award reasonable attorney

fees and court costs to the principal.

Section 3.  This act shall apply to any violation or

continuing violation occurring after the effective date of this

act, regardless of when the agreement between the parties was

entered into.

Section 4.  This act shall not apply to the following:

(1)  An individual or business entity that engages in

providing insurance under the act of May 17, 1921 (P.L.682,

No.284), known as The Insurance Company Law of 1921.

(2)  A bank, trust company, savings and loan association,

credit union, consumer lender or financial institution

organized, chartered or holding a license or authorization

certificate under the law of this Commonwealth, any other

state, the United States or the parent, subsidiary or

affiliate of such entity.

(3)  A person who holds a real estate salesperson's

license under the act of February 19, 1980 (P.L.15, No.9),

known as the Real Estate Licensing and Registration Act, and

who has a claim for payment of a real estate commission or

compensation against the real estate broker with whom such

real estate salesperson is affiliated.

Section 5.  This act shall take effect in 60 days.