Actually the report states:
"Spongetech and Dicon together employ 23 individuals. In addition, 57 sales representatives work for the company on commission."
You're absolutely right.
The question is:
1. Are those representatives individuals who are treated as such on the books of the company, reporting to company management, performing their function in a manner that management dictates and who the company requires to submit a current Form W-4? If so, they're employees and belong in any census or statement reporting employees.
2. Or are they representatives in the employ of others that offer Spongetech's and other company's products for sale, not meeting the definition of common law employees of Spongetech.
We would have to know what was in the writers head, perish the thought, when they made the statement to be sure, but I'm inclined to think that it was the latter. It's a rare manufacturer that employs better than 70% of their own personnel in field sales, whether they be commissioned or salaried. I'm inclined to suggest that that is common sense, but that may have no place here.
IRS publication 15-A covers the subject in gory detail, but I doubt that it was consulted for its definitions prior to making the statement. I do know that the statement that "That works out to a total of 80 employees and "sales representatives" working for the company" is far less descriptive than "Spongetech and Dicon together employ 23 individuals. In addition, 57 sales representatives work for the company*** on commission". If you really want to play "Parse the Statement", the company's statement implies that Spongetech and Dicon do not employ the sales representatives by stating unequivocally that they "together employ 23 individuals." Period, end of sentence.
***The original text is "Companies".
By the way, you seem to be a party to some confusion regarding the actual completeness and composition of the $7.7million net sales reported in your linked document and other documents supplied by the Defendant Spongetech. Since it appears in the paragraph directly following the quote that is provided above, maybe we can clear it up right now by providing the pertinent passages:
"Dicon's net sales totaled approximately $6.3 million, and Spongetech's net sales totaled $1.3 million for the period June 1, 2009 through April 30, 2010."
"Thus the Companies' total net sales for the past eleven months is approximately $7.7 million."
The document is signed by Jesse Z. Weiss, attorney for Spongetech, who at that moment in time and space had every opportunity, and plenty of incentive, to suggest or hint at the possibility that there may have been shipments made by subsidiaries or other entities to other countries or planets that are not reflected in the "total net sales" that he was reporting. He didn't.
Nothing speaks to the issue more clearly than that and for anyone to suggest that the reported total net sales might not really be the total net sales is plainly nonsense. Please pass it on.
Not at the table, Carlos.
AI
