April 20, 2023
Universal Douglas Sends Remarkable Memo to Agents
A new self-serving and tone-deaf program is seemingly holding already-earned commissions hostage unless agents sell more
Manufacturers’ representatives, including lighting agents, don’t get paid until they sell something. And even after they sell something, it may take 60 days, 90 days or more for all the sale requirements and financial cycles to cause the rep to see a commission check or direct deposit from the manufacturer. It can be a rewarding business, but also a tough business that sometimes causes the agents’ reward for time and effort to be insufficient.
On March 22 Universal Douglas, parent to Universal Lighting Technologies (ULT) and Douglas Lighting Controls, abruptly shut down and, since then, unpaid agent commissions remain unpaid.
In a Wednesday memo to ULT and Douglas Lighting Controls agents, Steve Wybo, Chief Restructuring Officer, has proposed a “double commission” program to its agents. At first glance, double commission might seem interesting, but when the program is fully explained, there really is no doubling, or extra bonus involved.
Seemingly holding past-due commissions hostage
Essentially Universal Douglas is proposing a new program that will release past due commissions only if the agent sells more for Universal Douglas. There is no explicit statement about agents not getting paid money already owed if they don’t participate, but multiple agents with whom we communicated interpret that as the underlying message. We sent a note to Wybo asking him what the plan is to pay agents owed commissions if they don’t participate in the program and he did not immediately respond before press time.
The Universal Douglas program would monetize its surplus and aging finished goods inventory and pay agents the owed sales commissions for February and March 2023. If agents participate in this program, they will receive “double commissions” on every sale made directly by them or their company members until the "true-up" commissions equal their previously earned but unpaid sales commission. Once the "true-up" commissions are paid, the past-due sales commissions will be considered paid in full, and future sales will revert to the standard sales commission.
Related: Terminated ULT Workers Demand Severance »
This is all about the private equity (PE) firm, Atar Capital, maximizing a Universal Douglas asset sale – with little regard for the local agent putting its time, effort and reputation on the line
When Universal Douglas shut down abruptly on March 22, it affected agents in many ways. Customers who have dozens of lighting manufacturer options chose to trust Universal Lighting Technologies (ULT), Douglas Lighting Controls (and their agents) to fulfill orders that were in process. Agents were called in to help clean up those messes. Without any notice, agents were faced with a situation in which the disappearance of an important line would immediately affect their cash flow, employee deployment and ability to offer complete lighting and controls solutions to existing customers.
A more realistic look at the messaging is that Universal Douglas acknowledges that it owes agents earned commission for February and March, and unless the agent – who has already been recently burned by Universal Douglas – steps up to sell more Universal Douglas product, the status of February and March commission payments will seemingly remain uncertain.
Related: Universal Douglas: Dormant but not Dead »
Wybo and Universal Douglas seem to be consistently tone deaf
The real motivation here is one-sided. Universal Douglas wants to make its books look good. It wants to maximize the price tag it might be able to fetch from buyers for ULT, Douglas Lighting Controls and their respective assets.
On the day Universal Douglas was shut down, Wybo sent a memo to distributors asking them to “support our company and its stakeholders with the same high level partnership that has characterized our relationship for years.” Many found this statement to be dripping with irony, because the way Wybo and owner Atar Capital abruptly terminated employees, rattled agents and burned customers on that day was the extreme opposite behavior of “high level partnership.”
And now, in the interest of helping Wybo maximize the sales price of Universal Douglas assets for Atar Capital, Wybo is asking agents to put their personal and business reputations on the line to sell more products for Universal Douglas – a company whose owners and leadership have recently shown that they cannot be trusted or relied upon to do anything but act selfishly, surreptitiously and ruthlessly – with no regard for the reputation of its business partners who previously trusted them.
What would you do?
Considering Universal Douglas' recent cutthroat actions, if you were a ULT agent, would you risk your local reputation and valuable time for Universal Douglas and trust them to pay you what they've already owed you for months?
