The Manufacturers’ Rep Council conference will move to the SEMA Show for 2010. The open and interactive session will include guest speaker Bryan Shirley, president and CEO of the Manufacturers’ Agents National Association, who will discuss the industry’s most significant challenges in this turbulent economy.
The MRC will present its council awards during the upcoming SEMA Show in Las Vegas. The Sales Team Annual Recognition (STAR) recognizes a manufacturer and its sales team for business performance in terms of professionalism, product training, updates and more. The MRC Hall of Fame honors individuals whose contributions, dedication, dignity and/or general stature have helped to enhance the rep industry as a whole. New members may not necessarily be inducted each year into the MRC Hall of Fame, but the honor will be bestowed upon a viable candidate as he/she is nominated
MRC members are invited to submit nominations for the STAR award and potential inductees to the MRC Hall of Fame. Nomination forms will be sent electronically to the members at large in July.
For additional information about the STAR award or the MRC Hall of Fame, contact SEMA Council Manager Staci Bostock at 909/396-0289 or firstname.lastname@example.org.
Steven Sack, MRC legal counsel, will present information relevant to manufacturer’s reps in each issue of SEMA Member News. Sack is available exclusively to MRC members and can be contacted by phone at 917/371-8000 or via e-mail at email@example.com.
Business defamation is a serious threat for MRC sales reps and the companies they represent. When libelous or slanderous statements are proven in court, verdicts are often substantial—damages of $200,000 have been awarded, in addition to the $50,000 or more in legal fees. During a sales presentation, every statement made can have legal significance. Sales reps must know what they can and cannot say regarding both a competitor and a competitor’s product.
A key requirement for a business defamation suit to be legally actionable is that a false remark has been passed to a third party. It is vital that sales reps understand what constitutes libel and slander and how they can protect both their agencies and their companies, and there must be a clear understanding of the definitions of potential liability.
Business slander: Slander is oral defamation of the competition, whether the reputation of the company or the personal reputation of an individual in that firm is damaged. Such defamatory statements might call into question the honesty, skill, fitness, ethical standards or financial capacity of a company or a particular individual.
Business libel: Libel is defamation in written form and includes advertising, product brochures and letters sent to customers. As in the case of slander, libel involves damage to reputations through statements that reflect on the conduct, management or financial condition of the business.
Product disparagement: False and unfair comparisons or deceptive claims regarding a competitor’s products, services or property are another area of potential liability.
Unfair competition: Legal problems can also arise when a sales rep misrepresents qualities or characteristics of its own products or services. Because false and deceptive promotion of the employer’s products or services may injure the operation of the purchaser, such deception is actionable.
While honesty is always the safest approach in any sales discussion, the courts do allow sales reps a certain amount of leeway in presenting their products. Such sales “puffery” is an accepted (and even expected) part of the sales presentation. Yet, when a sales rep is presenting the product, business defamation or unfair competition can still apply when false information is communicated as factual and scientific.
When an untrue, defamatory statement has been made and then repeated, the plaintiff can have a strong case. In many states, damages caused by the remark may not have to be proven in a libel or slander suit. Because the damages are presumed, the law allows recovery (sometimes substantial) once the defamatory remark has been made. Therefore, a third party need not be specifically named when description or circumstances would be sufficient to identify that party. However, product disparagement cases are more difficult to win because the plaintiff has to prove that damages actually resulted from the remark.
A sales rep should be instructed never to repeat unconfirmed trade gossip—especially remarks which suggest that the competition is in questionable financial condition. Remarks that can be interpreted as impairing the reputation of another business should also be avoided, such as statements that a competitor ships defective goods or does not honor contracts. However, reps need not refrain from making accurate comparisons that have scientific documentation.
Sales people should feel free to say anything that is true to sell their principles’ products and services. But they must remember that every word can have legal significance. This makes it crucial to understand their exposure to defamation liability.