920 F. Supp. 2d 243
D.P.R.2013Background
- González, an independent sales representative for Hurley in Puerto Rico/Caribbean, allegedly was terminated in violation of Law 21 (Puerto Rico Sales Representative Act).
- Hurley initially classified González as a non-exclusive representative under a written 2007 Agreement; the Agreement extended to July 31, 2008 and then to July 31, 2009, with no further extensions in writing.
- González was initially managing Hurley’s women’s line, later also the men’s line, and she built a showroom and staff without Hurley financial aid.
- Hurley’s relationship with González ended December 1, 2009; Hurley attributed the termination to performance, while González alleged lack of communications and exclusivity-based protection under Law 21.
- Plaintiff’s claims under Law 21 for exclusivity during August 1, 2007–July 31, 2009 were found non-exclusive by the court; claims prior to August 1, 2007 were time-barred; novation and just-cause issues remained open for trial.
- The court granted summary judgment in part and denied in part, noting the case may be settled and that some factual disputes require trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether González was exclusive under Law 21 during 2007–2009 | González contends exclusivity existed despite the Agreement labeling non-exclusive. | Hurley argues the Agreement is clear and non-exclusive, precluding Law 21 coverage. | González was non-exclusive Aug 2007–Jul 2009; Law 21 claims for that period dismissed. |
| Whether pre-August 1, 2007 exclusivity claims are timely | González claims exclusive relationship prior to 2007 falls under Law 21. | Hurley asserts claims pre-2007 are time-barred by Law 21’s three-year prescription. | Pre-2007 claims time-barred; dismissed with prejudice. |
| Whether a novation extended exclusivity after July 31, 2009 | Hurley may have altered the contract scope via novation, preserving exclusivity. | No valid novation; the Agreement precluded extension without writing. | Hurley failed to prove novation; trial not required on that defense. |
| Whether Hurley had just cause to terminate González | Evidence suggests termination was pretextual and aimed at reducing staff; disputed factual issues exist. | González underperformed and violated performance expectations; just cause supported by record. | Summary judgment denied on just-cause issue; credibility questions warrant trial. |
Key Cases Cited
- Cruz Marcano v. Sanchez Tarazona, 172 P.R. Dec. 526 (Puerto Rico Supreme Court 2007) (defines exclusivity and protects the agent in Law 21 context)
- IOM Corp. v. Brown Forman Corp., 627 F.3d 440 (1st Cir. 2010) (exclusivity principles under Law 21; circuit approach to exclusivity)
- Innovation Mktg. v. Tuffcare Inc., 31 F. Supp. 2d 218 (D.P.R. 1998) (law 21/contract interpretation; protection of exclusivity)
- Nike Int’l, Ltd. v. Athletic Sales, Inc., 689 F. Supp. 1235 (D.P.R. 1988) (contract interpretation; limitations on nonexclusive terms)