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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Employment Law
Satisfied Customers: 111469
Experience:  20+ Years of Employment Law Experience
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I recently helped launch a start up company and was brought

Customer Question

Hello,
I recently helped launch a start up company and was brought on as Vice President of Sales and Marketing. At the time we did not have a written agreement in place. We discussed it numerous times and the amount was verbally decide as 20% of all sales. Prior to the company going into production I had worked extensively for this company. I was responsible for having the website designed, soliciting clients, and securing a domain name. Over the course of six months I put around 350 hours into this company.
A month ago, the COO of the company (he is the person who brought me into the company) got in a financial squabble with the 2 other partners. At that time they demoted him to a manager of the company and basically planned to start a new company so that they wouldn't have to pay him a third of the revenue. An email stating this was accidentally sent out by one of the 2 partners (Please see at the bottom). At that time the remaining partners told me that I would no longer be the Sr. VP of Sales and Marketing and from then on out I would be considered a independent sales agent. I told them I wasn't interested in the position and wished them luck.
Recently they came to me and asked that I provide them with all of my Sales and Marketing information. Leads and contacts, domain name, and emails to them. The 2 other partners did not pay a dime for any of the information and all of it is in my name.
My question is: Am I obligated to turn over all of my information if I wasn't compensated for my work? or Am I entitled to send them a bill for my services and tell them that I am willing to turn over my information to them upon receipt of payment?
I would like to get this resolved since they are now accusing me of stealing company property.
Thank you very much for your assistance.
Sincerely,
Frustrated
How about we create a new LLC named "XXXX", short for CN.

XXXX sublicensees CN technology to XXXX for $1/yr.

XXXX is owned by both our LLC's. This way we can keep the CN and continue to use the CN name and point it to XXXX website. On XXXX website we can say that CN is now XXXX. We will be able to get our checking account for XXXX because Bank of SD has our information already.

TJ can continue to own 33% of CN, I don't mind giving him thirty three and a third cents every year. TJ won't be able to say that we forced him out of CN. I believe that is the story he is telling everyone and that is why BR wants to see how the legal plays out. In reality I hope that TJ remains an owner of CN. We can continue to play the "f**k-f**k game" with him. Every year CN can mail him a check for 34¢.

I believe that TJ does not have any ground to take any kind of legal action because he will still be an owner of CN. Since we have control of CN we can sublicense legally to XXXX.

Since CN will remain an active LLC and TJ is still an owner/member you won't have to repay this $7,500 for the samples if he refuses to sign the paper, in fact it won't matter if he is still an owner of CN because we have control of CN.

CN won't have to go thru the hassle of a capital call to get TJ shares down. We can save time, money and stress.

Future products will be labeled with the XXXX name instead of CN.
Submitted: 2 months ago.
Category: Employment Law
Expert:  Law Educator, Esq. replied 2 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Were you an employee of the company or just a contractor working with them?
Customer: replied 2 months ago.
Well I believe I was an employee since they gave me the Sr. VP of Sales and Marketing title.
Customer: replied 2 months ago.
However, I'm not sure of my status because we didn't have my contract finalized.
Expert:  Law Educator, Esq. replied 2 months ago.

Thank you for your reply.

IF you were an employee, then they had to pay you. If they did not pay you, then you have a wage claim against them. However, anything you have done for work with the company as an employee belongs to the employer. You can file a wage claim with the department of labor for them not paying you your wages.

As far as forming a new company, that could be an issue with breach of fiduciary duty on your part for going off and competing against the business, so this could embroil you in litigation that would not be economical. So I would suggest that you would have to sue the company for wages and if you have control over the company, then you need to follow your operating agreement and seek to remove the offending board members.

Customer: replied 2 months ago.
Thank you for the reply. I found the agreement we had discussed. It says that it is a Sales Representative Agreement. From the looks of the document it would seem that I wasn't an employee but considered a independent representative. How would that change things?Also, I am not trying to start a new company and compete against them. I have completely left the industry. The partners were the ones who wrote that they should start a new company and leave the existing partner out to dry.
Expert:  Law Educator, Esq. replied 2 months ago.

Thank you for your reply.

You can be an employee or independent contractor, not both, it is one or the other. If you are an independent contractor, you can leave and take your information with you and they cannot access your information, since they never paid you for the work you have done.

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