I’m a broker and I recently terminated the services of one of my agents who signed the Independent Contractor Agreement for Sales Associate (TXR 2301). Which fees should he receive upon termination?

You owe the agent fees earned before the termination was effective. According to Paragraph 16C of the Independent Contractor Agreement for Sales Associate (TXR 2301), an agent’s fees are earned at the time a broker's fees are earned under the applicable agreement for brokerage services—unless the fees are subject to arbitration or litigation.

Each brokerage agreement (i.e. Listing Agreement or Buyer's Represenation Agreement) defines when a broker's fees are earned. Generally, a broker's fees are earned when contracts or leases are fully executed. Paragraph 21B addresses the issue of fees payable to the departing agent if they are unpaid as of the termination date. The parties could agree to other rules regarding this fee sharing, but a different agreement should be in writing to prevent disputes.