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Thanks for the update. I lived in CO in the late 1990s and actually had an employer take a while to pay me, which is why I incorrectly assumed that the law was the same, when it has in fact changed.

It is actually more difficult than I thought it would be to locate an accurate list of which states have which positions in this matter.

It seems that courts in many states are starting to lean against officers being responsible for unpaid wages.




What's the state where you think officers are responsible for the contractual obligations of the corporations that employ them?


You are mis-interpreting my point: it is not officers being responsible for contractual obligations in general, it is (or at least was) an exception carved out for wages owed employees.

There seems to be a lot of debate over when/if an officer can become an "employer" as defined in the law.

Here are some URLs that cover what I am talking about:

WA: http://www.turnaround.org/Publications/Articles.aspx?objectI...

PDF with more discussion of the issue, includes discussion of the Federal FLSA and the case of CA: http://web.omm.com/files/upload/D&O%20Liability-WARN%20A...

NY (10 largest shareholders of non-public company held liable): http://www.eminutesonline.com/why-in-the-world-would-anyone-...

Federal law (FLSA): http://www.klehr.com/?t=11&la=690&format=xml

Since the company that is not paying is often headed for bankruptcy, these situations often spill over to bankruptcy court, where the judge has a great amount of leeway to determine who gets paid and when.


I read your first example (CA), which states:

In Reynolds v. Bement, 36 Cal. 4th 1075 (2005), the California Supreme Court observed that, “[U]nder the common law, corporate agents acting within the scope of their agency are not personally liable for the corporate employer‟s failure to pay its employees‟ wages.” Id. at 1087.

Now I'm finished reading, and, hopefully, talking about this. Like I said, it's extremely unlikely that the owners, investors, or officers of a VC-funded company would be on the hook for salaries after the company went bankrupt. That's a good thing. Surprisingly few things need to go wrong for a company to BK. Who'd start a company if that event meant they'd lose their house?




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