Commission Agreement
(TX)

Summary

This template commission agreement provides a starting point for drafting commission agreements for sales personnel. This template includes practical guidance, drafting notes, and alternate clauses and optional clauses. This template is intended for private employers. It is based on federal law and Texas state law. This template does not address potential state law distinctions of other states; thus, you should check any relevant state and local laws. Texas employers are free to require that employees must be currently employed in order to receive a commission. However, in the absence of specific language in the commission agreement defining the payment eligibility requirements, employees are entitled to commissions on sales post-termination if they were the proximate and but-for cause of the sale. Therefore, when drafting a commission agreement, you should clearly articulate when the employee earns the commission and at what point an employee's right to receive a commission ends. For information on drafting commission agreements, see Commission Agreement Drafting Techniques. Also, see Commission Payment State Law Survey (Including upon Termination of Employment) and Commission Plan Drafting Checklist. For information on state-specific laws concerning commission agreements, see the Wage and Hour Requirements column of the Wage and Hour State Practice Notes Chart.