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0 pointsjessriedel2y ago0 comments

This seems to establish precedent that unpaid wages by a bankrupt company, even in the absence of serious misconduct, are sufficient justification for veil piercing:

> The case therefore would up presenting a clear question of law: Where the workers are employed by a corporation, can an individual be held liable for penalties associated with statutory violations in the payment of wages where there was no allegation or finding that the corporate laws had been misused or abused for a wrongful or inequitable purpose? In other words, do sections 558 and 1197.1 allow workers to recover civil penalties for nonpayment of wages from individuals even when there are no other grounds for piercing the corporate veil under the doctrine of alter ego?

> The court of appeal concluded that under the clear language of sections 558 and 1197.1, the State of California, through the Labor and Workforce Development Agency (“LWDA”), can recover penalties associated with unpaid wages from individuals. Furthermore, PAGA allows employees to stand in the shoes of the LWDA and recover those penalties. Accordingly, employees are also permitted to recover those penalties from individuals.

https://hunterpylelaw.com/2021/02/individual-liability-for-w...

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s1artibartfast2y ago

>The only ambiguity to me in reading this is whether the court considered it different because the wages went unpaid for a while before bankruptcy.

This is my entire point.

If you go into chapter 7 bankruptcy, and a judge prioritizes senior creditors above unpaid wadges, you are clearly in different territory than if the corporation was neglecting wages before bankruptcy.

Everyone keeps linking cases for pre-bankruptcy cases, or ones without bankruptcy at all.

Meanwhile, There laws on the books about the prioritization or creditors, and where labors stands, and how much labor gets paid out before, and how much after other creditors.

jessriedelOP2y ago

> ...another industry faces the same problem: startups. The opportunity to create the next big thing has “long lured ambitious entrepreneurs into shiny co-working spaces and startup accelerators” in Silicon Valley, but the reality is that most startups fail.15 These failures can be crushing for all those involved.16 Not only does the death of a startup mean the loss of a job and the death of a dream, it also means a lack of funds to compensate employees for work they have already put in.17 Although the practice of withholding wages is illegal, it is a rather common problem when startup founders “put off paying employees as they wait out their next round of funding.”18 If the funding falls through, there is often no money left to pay employees the wages they have already earned.

> That is what happened to plaintiff Brett Voris (“Voris”) in Voris v. Lampert.

https://www.gmsr.com/wp-content/uploads/2021/07/Kuang-Too-Ma...

...which is the same case I linked above. So the whole issue is how long wages can be delayed. If you're arguing that "Convoy management is unlikely to be personally liable assuming they didn't delay any wage payments whatsoever and their wage payment intervals are found to be reasonable by the court", then I agree. But it's rather common for some of these conditions to not hold, so the potential for piercing the veil is very real.

(Perhaps you are arguing against other people who think that unpaid wages are always considered theft, in which case I would agree with you. I was respondsing to the comment "you cant prosecute a dead entity for theft"; often you can, and it depends on the details, which I presume are not yet public for Convoy.)

s1artibartfast2y ago

> If you're arguing that "Convoy management is unlikely to be personally liable assuming they didn't delay any wage payments whatsoever and their wage payment intervals are found to be reasonable by the court", then I agree.

This is exactly what I am auguring. Convoy isnt even delaying any wage payments. They are not paying severance or providing transition healthcare/COBRA.

It seems like Voris v. Lampert case had a much longer delay, and the court still decided against the the plaintiff.

I did learn that there is more case law on piercing the vale for wage than I realized, but everything I read still suggests that a legitimate bankruptcy without serious/illegal executive misconduct will not lead to piercing of the veil.

j / k navigate · click thread line to collapse

0 pointsjessriedel2y ago0 comments

This seems to establish precedent that unpaid wages by a bankrupt company, even in the absence of serious misconduct, are sufficient justification for veil piercing:

https://hunterpylelaw.com/2021/02/individual-liability-for-w...

0 comments

s1artibartfast2y ago

>The only ambiguity to me in reading this is whether the court considered it different because the wages went unpaid for a while before bankruptcy.

This is my entire point.

Everyone keeps linking cases for pre-bankruptcy cases, or ones without bankruptcy at all.

Meanwhile, There laws on the books about the prioritization or creditors, and where labors stands, and how much labor gets paid out before, and how much after other creditors.

jessriedelOP2y ago

> That is what happened to plaintiff Brett Voris (“Voris”) in Voris v. Lampert.

https://www.gmsr.com/wp-content/uploads/2021/07/Kuang-Too-Ma...

s1artibartfast2y ago

This is exactly what I am auguring. Convoy isnt even delaying any wage payments. They are not paying severance or providing transition healthcare/COBRA.

It seems like Voris v. Lampert case had a much longer delay, and the court still decided against the the plaintiff.

j / k navigate · click thread line to collapse