Court backs commission forfeiture after sales rep’s early rival switch

On April 21, 2022, she emailed her resignation, effective May 22. Five days later, she found herself locked out of the company’s computer system. She took that as a termination and, on April 27, signed with Morilee, a direct competitor selling identical products. 

The company saw it differently. The trial court found she failed to prove the lockout amounted to a discharge. That left her bound by the non-compete when she signed with the rival – breaching it “by approximately April 28th at the latest,” as the court put it. 

She sued under the Illinois Sales Representative Act, which requires principals to pay all commissions due within 13 days of termination. Her argument: once commissions are earned, a private agreement cannot claw them back. 

The appellate court disagreed. It held the Act requires payment of commissions “due at the time of termination” – and the forfeiture clause meant none were due. The clause did not waive the Act’s protections; it ensured there was nothing left to protect. 

The court also upheld the liquidated damages clause, noting the company’s officers both testified – without meaningful contradiction – that calculating actual damages from a non-compete breach would be difficult given variables like timing within the selling season and customer confusion in a small industry where competitors sold identical products.