California Employment Law
California Employment Law Questions Answered by Legal Experts
Patrick, yes I would like to talk to you about this. Are you available?
Patrick, I tried to send an reply earlier today. Did you receive it?
I am leaving right now. I will send it over this weekend and you can take a look at it. Thanks for your help.
You too. Thanks.
Patrick, I have worked for a CA LLC in the electronic display industry for 4+ years as VP Sales. There are only 5 employees. I don't have a contract, but "normal course of business" during this entire time is $85,000 salary (pd bi monthly) + 2.5% gross sales commission. The company is owned 97% by an Equity Fund LLC that has total decision making authority and also much give permission on all checks written. The "Partners/LLC" also have entitled themselves to be paid a monthly management fee, although I'm not sure if they have taken any out to date. I have been told by people who have seen our books, that it is a "substantial amount of money" and whether or not it has been taken out, it is definitely listed on our books as an expense. The Partners claim to have put approx. $2.5 million into the company during the past several years. This year sales have been down. The Partners decided several months ago that they would not put any more money into the company and have ceased making payroll, except if/when receivables come in and allow it to be paid (for all 5 employees). I am currently owed 6 payrolls (going on 7) in arrears and have not been paid any commissions (approx. $14,000) in 2013. My personal financial situation is nearing bankruptcy. I know that I can file a claim with CA Board of Labor Relations...., but have hesitated to do it yet. When I discussed this situation with Joseph on JustAnswers in late August, he told me that if the Partners decided to bankrupt the company, the corporate veil would be able to be pierced and the employees could go after their LLC because a court would recognize that they owned the VAST majority of the company and had total decision making authority, so they would not allow them to hide behind that corporate veil. I am still considering filing a claim, but I am weighing the advantages vs. disadvantages. I actually have some very large orders in the sales pipeline that would help to remedy to payroll situation IF they do come to fruition. The Partners are well aware of this...., but still refuse to put additional money into the company to help alleviate the financial problems each of the employees are experiencing from not being paid. It's really a sad situation for all of us. IF I do decide to file a claim, how quickly does the Sate take to act? It is my understanding that it takes several weeks....and then a "consultation" takes place where the parties try to "work things out" via a mutal agreement. I think the Partners would actually just take advantage of that extra time to see if the anticiapted orders are coming in or not.....so the threat does not intimidate them. However, is there any stance/method that State could take to order the Partners to put the money into the company to meet payroll or be immediately ordered to shut the company down? Since the Partners know there are potential orders starting to happen, wouldn't it be in their best interest to invest the additioanl money (probably less than $100,000 total) to cover payroll (and do the "right thing"), or risk having the State order the company to shut down...and they would lose their $2.5million + any upside potential to finally recoup the investment and generate revenues? Is there any way the State can force that decision to be made by them? Thanks.
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