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  • paid by company I don't work for New York

    ]I am a software sales person for a company that filed chapter 11 (all comp plans deemed null and void by Judge)and an investment company that owns a smaller company doing the same thing bought the assets (including accounts I brought to company and was being paid residual income for)
    Most workers were kept on by the new owners doing the same job as before and being paid the same as before as I was for several months. My income was a combination of salary, residuals and upfront bonus.

    After several months two coworkers and I were told that we had to become part of the smaller company they own and work on their compensation plan which consists of salary and a small upfront commission for every deal we brought in. My residuals (which at that point were at about 45K per year) were taken away. My two coworkers were fired shortly after (they stopped doing any work because of the unfainess of the situation)

    I am still working for the same company, still have same email,title use their leads etc but am being paid by this other company on their lower comp plan. I do a different job than the sales reps at the company I am being paid by, they are in a different state etc. My job becuase of its complexity takes about 3x longer to board a new account so I am not only making less than I was but cannot hope to make the same as an equally productive rep on their plan.

    Do I have any legal recourse? In the last 3 months I have lost about $15,000 and If I stay with company I will earn about $60,000 less foir one year. Thank you in advance for your help and insights.
    Last edited by duped; 07-20-2010, 09:15 AM. Reason: to disguise my identity

  • #2
    This is going to be a very soft answer. Your state is not my state, and there is a small chance that NYS law has something to say about this. Very basically, there is a Common Law principal called Employment At Will. Either party has the right to end the employment relationship at any time, and changes in compensation in a go forward basis is generally legal. Now these are the basic rules going back many hundreds of years. Federal law (FLSA) is ok with these rules as long as no actual federal rules such as minimum wage or overtime is stepped. States may (or may not) fiddle with Common Law rules, especial with something like required notice of changes. But the state being able to make labor law changes that override Common Law does not mean that they necessarily have done so. And I have never heard of any state saying that is a company goes bankrupt that the company which purchased the assets is required to use exactly the same compensation agreement as the company that folded. In fact, generally speaking, the old company generally could have changed your compensation agreement on a go forward basis. Generally speaking, by continuing to work for the new company under the new terms, you have "accepted" those terms legally.

    Now, could there be some odd ball exception to the general rule? Sure, why not.
    - Do you have any written contract that you think somehow survived the bankruptcy process? If so, show it to a local attorney. Contract law is a common exception to Common Law, but that only works if there is actually a legally enforceable contract saying what you want it to say.
    - "Residuals" could be interesting. If this was CA (which it is not), "residuals" are something which could have legal legs, IF your old employer had not gone bankrupt. Technically those were claims that should have been part of the bankruptcy process, and not something effecting the new employer.
    - Maybe NYS has some oddball rule that I have never heard. Maybe a lot of things. But nothing you are saying is jumping off the page as an illegal action on the part of the new employer.

    May I ask who is the party you want legal recourse against? The old employer who I guess no longer exists, or the new employer who never made those promises that you feel have been broken?
    Last edited by DAW; 07-19-2010, 01:44 PM.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Thank you for replying. I would like to take action against the new owners if it seems like I have any grounds for this. Every other employee in every department is still on same company payroll.(just new LLC). When the newowners took over I was assured by the COO that I would keep my comp plan if I stayed-(I was thinking of leaving.) I am the ONLY person who is now paid by another company that they own,who I don't work for, which has a lower comp plan because of a different job discription.. Others with lower residuals were left on old comp plan. Only the 3 highest earners were moved to being paid by this other company (2 were since let go) without a residual plan. The company i am paid by has a different name, different email system etc that I don't participate in. This is why I think something might be being done that is legally questionable.
      Last edited by duped; 07-19-2010, 02:25 PM.

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      • #4
        While I can not be sure, I believe that if this new company is profiting from the accounts that you established with the old company and were receiving residuals on, you would have a case against them. On a going forward agreement for "new" work that you are doing, they have the right to change the compensation agreement.

        If the former is true, see an attorney to have your documentation reviewed to determine if you have a case.
        Please post questions on the forum rather than sending me a private message or email. That way others who have similar issues have access to the discussion.

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        • #5
          Agreed on seeing a local lawyer! The problem is that if the new employer did an asset only purchase of the old company, how does the prior liability transfer to the new company? Assuming the law recognizes the prior liability - this is not yet established. A simple wage claim would not carried over. The employees would be creditors of the old company. The claim would be something resolved by the bankruptcy trustee.

          Now if the new company did a non-asset purchase of the entire old company, including liabilities, then there is a much stronger argument. You would still need to establish that what you call the "residuals" are still legally due you under state law, and state law would have some very different handling on this point. But if there is a non-asset purchase of the company and NYS law would have considered the "residuals" to be a legimiate liability of the old company, then you would have something.

          Certainly see a lawyer, but I am still not seeing just what the "new company" did (assuming that we are still talking about a purchase of assets) that would cause the liability to belong to them. I am not seeing how the OP is not legally a brand new employee as far as the new employer is concerned, with no legal obligations carried forward. Perhaps a local attorney will see something that I do not.
          "Reality is that which, when you stop believing in it, doesn't go away".
          Philip K. **** (1928-1982)

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          • #6
            does this establish that they took on old contract?

            The COO and VP of sales told me orally that they would continue to pay my residuals and paid them for several months, then switched my pay check to another company that I don't work for and stopped paying. Wouldn't this imply bad faith?

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            • #7
              You are going to need to talk to a local attorney, because I am fairly sure that no one on this website is all that familar with NYS aquisition laws. Or the NYS law on what you call "residuals" but which the law probably regards as something else. Like say "commissions".

              I am unclear on several things though. Just how many different companies are we talking about? I was under the question that once upon a time that there was an original company that went in bankruptcy and no longer exists. And that this was the company that you had the agreement with. Is this true?

              You mentioned a new company purchasing the assets of the old company. Is that still true?

              And you are now saying that there are two "live" companies, apparently not related to the orginal company who are moving employees around. Is that true?

              This sounds like 3 companies. The old company (RIP) with it's asset's purchased by one of the new company, and the third company is a subsidiary of the other new company. Is this correct?

              When whoever at the new company made whatever promises you think they made, did they put it in writing? Or provide any other proof, say a video or audio recording? Something that you could actually provide a judge? While all contracts are "agreements", not all agreements are "contracts". There are very specific rules that must be followed for an "agreement" to become a "legally enforcable contract". The rules differ state-to-state, this is not a contract law website, and even if it was, the answer would always be to have a local attorney read the actual contract. It is not entirely impossible for a verbal contract to be legal, but it pretty much requires the other side to agree with you on everything. Or witnesses. Or something that would convince a judge that a legally enforcable contract actually exists and just what the provisions of the contract is. If it is just your word against the employer's, the odds become very poor.
              http://en.wikipedia.org/wiki/Contract
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)

              Comment


              • #8
                There is potentially a lot going on here that we have no way of seeing. There is the likelihood of interlocking directorships, common ownership among the 3 companies, etc which could break the apparent protection for a successor company that an asset only sale could provide. The nature of the residuals is also important. Were they long term payments for having won the account? Were they based on continuing income from the account? Were there provisions for the account being transferred to another corporation? (Meaning if your original company were still in existence but sold the account to another company, would you have been due any compensation).

                There is no way any of us can determine this, but you are talking about a substantial amount of money. That is why you need to talk with a business law/contracts attorney to try to sort out the situation. You need to discuss both what you can prove with documentation and what verbal agreements you feel were made.
                Please post questions on the forum rather than sending me a private message or email. That way others who have similar issues have access to the discussion.

                Comment


                • #9
                  Thanks to all for taking the time to respond.

                  In response to last post: First, sorry I was unclear.

                  Q Just how many different companies are we talking about? I was under the question that once upon a time that there was an original company that went in bankruptcy and no longer exists. And that this was the company that you had the agreement with. Is this true?
                  A The original agreement was with the company that went bankrupt. COO of new company told me and 2 coworkers (who were subsequently fired) that we would have the option to keep our old compensation or look at the comp plan of another company they owned and choose that if it was better. They followed up by continuing to pay my residuals and comp plan.

                  You mentioned a new company purchasing the assets of the old company. Is that still true?
                  YES
                  And you are now saying that there are two "live" companies, apparently not related to the orginal company who are moving employees around. Is that true?
                  An investment company bought my company. They already owned several other companies in the same industry.
                  The payroll for each company they own is seperate.
                  Employees of my company are paid by the new company that was formed to operate my company.
                  After several months they removed me from payroll of company I actually work for and started to pay me thru another company that they own even though I don't work for the company that is paying me. All work that I do is for company formed to replace my company. I believe they switched my pay but not my duties, email etc to avoid paying my residuals.

                  This sounds like 3 companies. The old company (RIP) with it's asset's purchased by one of the new company, and the third company is a subsidiary of the other new company. Is this correct

                  investment company already owned other similar companies, then bought Assets of co I work for. Because my company (RIP) is larger and has a better reputation (although not for long as the new owners and all co's they own have terrible reputations) they are making the other companies subsidiaries of My co but payroll, location, benefits etc are still seperate.

                  All other employees who work for the new company formed to take over my company are paid by this company (most of these employees are salary only)
                  It seems like a blatant way of not paying me compensation already earned.
                  Last edited by duped; 07-19-2010, 09:13 PM. Reason: grammer

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                  • #10
                    If we are talking about "residuals" earned while working at the old company only, then when the investment company purchased the assets of the old company, they would not normally have purchased the liabilities of the old company, including your "residuals" form the old company. Your normal only recourse for the "residuals" from the old company would be to file a claim as part of the bankruptcy procedure.

                    Regarding New Investment Company and New Operating Company, any "residuals" actually earned while you are working for one or both of these companies is more promising. I still do not know NYS law, and you are still going to need to talk to a local attorney. You basically are going to have to claim that the verbal representations made by the COO of the New Company rise to the level of a legally enforcable contract. You need a lawyer who actually understands NYS law to tell you if this argument has legs.
                    "Reality is that which, when you stop believing in it, doesn't go away".
                    Philip K. **** (1928-1982)

                    Comment


                    • #11
                      residuals based on monthly ongoing profits of portfolio

                      residual income in this case is a percentage of ongoing profit on accounts I sold. no provisions for account being sold.

                      I didn't sue for residuals from original company because of verbal assurance (Foolish on my part-I know) from new COO and Sales VP that all income would continue to be paid.

                      Does the continuation of payments for several months imply this agreement?

                      Is there a legally justifyable reason to single me out and pay me through another company when all salaried only employees still performing dutied are continuing to be paid by new LLC formation for co I work for?

                      What kind of lawyer would be best for me? Labor, corporate ??? Don't know enough about this type of issue to use my own judjement.

                      Thanks again for all the help and insight.
                      Last edited by duped; 07-20-2010, 09:28 AM. Reason: spelling

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                      • #12
                        From my standpoint, I am going in circles on this question without actually resolving it. So, this is my last response to this question. Any one else wants to jump in, feel free. Since I keep saying that I know nothing about NYS law and the OP keeps asking questions very specific to NYS law, I will assume that he is not talking to me.

                        You need to talk to a lawyer. Depending on which of the many issues you raised it would be either a contracts or labor attorney.
                        "Reality is that which, when you stop believing in it, doesn't go away".
                        Philip K. **** (1928-1982)

                        Comment


                        • #13
                          thank you

                          [QUOTE=DAW;1142982]From my standpoint, I am going in circles on this question without actually resolving it. So, this is my last response to this question. Any one else wants to jump in, feel free. Since I keep saying that I know nothing about NYS law and the OP keeps asking questions very specific to NYS law, I will assume that he is not talking to me.


                          Thank you so much for all your input. Sorry to create frustration. I guess the complexity of the issue as I percieve it and my lack of clarity on which angle to pursue has me going in a circle. I think your response is on the money and I am very grateful for your responses as well as Scotts.

                          The responses have helped enormously to aid me in clarifying what my issues are and what I think is problematic with circumstances as they now stand.
                          Last edited by duped; 07-20-2010, 11:54 AM. Reason: added info.

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                          • #14
                            Contract Lawyer or labor lawyer ? for my case?

                            You need to talk to a lawyer. Depending on which of the many issues you raised it would be either a contracts or labor attorney.[/QUOTE]

                            I am ready for the next step of looking for a lawyer. How do I find someone reputable who is good at what he/she does?

                            I am also trying to figure out whether a contract or labor attorney would serve me best.

                            I am thinking that a contract attorney would be my best bet for sorting out whether verbal agreement would hold up, whether paying me for 3 months on old contract constitutes an agreement, and if they have legal grounds to pay me thru a company I don't work for to negate previous.

                            If I could get an opinion on
                            1) Does the contract appear to be best aspect of case to pursue?

                            2) What could a labor lawyer pursue that is outside the issue of a contract?

                            Thank you again in advance for any insights or opinions you could offer to help me.

                            Comment


                            • #15
                              Most employment attorneys are very familiar with contracts as relate to employment. Contact the local chapter of your Bar Assn Lawyer's Referral service or start calling attorneys that advertise as certified in employment law.
                              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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