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socrateaser
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 37952
Experience:  Retired (mostly)
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In 2000 I employed a physician to my practice. In 2002 his

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In 2000 I employed a physician to my practice. In 2002 his contract as an employee ended and he was given the opportunity to start up his own practice. He chose to stay with my practice. We never signed any agreements that would have made him a partner or shareholder but I treated him as one. I compensated him his own gross revenue minus his overhead. Officially he was was an employee who I was treating like an equal partner because of respect and no obligations to him. As the managing physician I charged him $6000/month. Six months into the new arrangement he accused me of stealing that money from him. This took place in 2002. At the time he said that there were no such verbal agreement. I told him that if he started to manage his own practice there would not be any fees. He agreed and the payments stopped. Needless to say that he never did manage his share of the practice and I continued to do so. In 2002, I also told him that he can order an audit and if any wrong doings were discovered, I will correct them. He never did the audit. In 2005 I closed the practice and we officially officially form another practice which we are equal shareholders. 1 month ago, in 2011, he is once again accusing me of the 2002 issue and is asking that I compensate his $36000. I dismiss his accusation, however does he have any legal grounds against me? And if so what would that be? Other than a financial ledger showing a $6000/month payment to fee for management fees there is no other evidence.
Appreciate your answer.
Submitted: 5 years ago.
Category: Business Law
Expert:  socrateaser replied 5 years ago.
Under WV law, an employer cannot deduct the employer's cost of doing business from the employee's wages. So, regardless of your agreement, if you were paying this person as an employee, then you could not deduct the $6,000 as a management fee.

However, the statute of limitations to recover unpaid wages in WV is 5 years. Goodwin v. Willard, 406 S.E.2d 752, 185 W.Va. 321 (WV Sup. Ct. 6/28/91). So, to the extent that the deductions were made more than 5 years ago, they are barred and cannot be recovered (assuming you plead the statute of limitations as an affirmative defense, in the event you are sued).

Hope this helps.

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