
Ask HN: Owed Salary, Founder Rebranded - daenz
The short version of the story:<p>I was a key engineer in a small startup.  Towards the end of the startups life, the founder was involved in some sketchy business dealings with money.  The other few employees and I worked IOUs for the final months while &quot;promised money&quot; was being wired, but never came.  When I left, I was owed about $15k in salary.  The startup is still in business with the state and re-filed their business information as &quot;active.&quot;<p>Recently, the founder started a new startup in the very same space, with the same mission statement as the old startup.  I suspect he is using much of the same code, as we had basically a completed product before I left the old startup.  It would take years to rewrite from scratch without re-using the old code.<p>It seems that he is letting the old startup die, while using work that he never paid for power his new venture and raise investments.  Is this a loophole?  Do you have any experience with a situation like this as an employee who was owed money?  I know all situations are unique, but how did your experience pan out?
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redis_mlc
1) If you were a W2 employee, and your concern is only getting paid, then call
him in the morning and say, "Have a check for $15,000.00 dated today by 2 pm
or I will file a complaint with OLS."

[https://olsconnect.microsoftcrmportals.com/employee-
inquiry/](https://olsconnect.microsoftcrmportals.com/employee-inquiry/)

If he doesn't pay you, then you and your co-workers can fill in that form with
the "wage theft" option and the state will investigate for free. And they are
relentless.

You're also eligible for unemployment, and when you file, the state will also
check what forms and payments he made. There are severe penalties for skipping
that, and the state doesn't like holding the bag on UI. They will go looking
for employers that do that.

2) If you're a contractor, then likely all you can do is to have a lawyer
write a demand payment letter, and also state that you retain copyright on
anything you wrote and weren't paid for.

Every time there's PR (press, funding rounds, etc.), mail him (and the board,
if any) a copy of the letter. But move on with your life otherwise.

Lawyers typically start billing in the range of $20,000 for anything beyond a
letter in large cities. If you sign any contract with a lawyer, add a "not to
exceed" clause with what you can afford to spend or it will cost more than the
wage theft.

IANAL, but I've done my own legal paperwork, filings and representation for
two decades. It's a handy skill.

~~~
burntoutfire
> Lawyers typically start billing in the range of $20,000 for anything beyond
> a letter in large cities.

Off-topic, but I'm always flabergasted at the rates I'm hearing US lawyers
charge. Are these guys totally swimming in money? If so, why no extra
competition emerges to bring prices down?

~~~
dv_dt
Competition isn't a magic wand. Lawyers fees are a market structure problem. A
market can work in an efficient competitive way but requires many factors to
operate that way. Customers need information, and a market where individual
customers only make infrequent, non-standardized, often non-public
transactions is pretty terrible for creating information customers can find
and act upon. That the transactions are also non-reversible and "sticky", or
difficult to change midway trough a case is also not great for a competitive
market.

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Buttons840
Most predictable and most important answer: talk to a real lawyer.

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smileysteve
You should start by talking to an employment practices attorney, and likely
send a demand for payment, then a violation for failing to pay minium wage.

If you had no equity, while the new company seems fraudulent, you have little
recourse beyond salary owed.

~~~
greenyoda
The employer doesn't just owe minimum wage; they owe whatever wage the
employee was making at the time they did the work. You can't retroactively cut
someone's salary. Once they've done the work, you owe them the money you
agreed to pay. Not paying it is wage theft (which is a crime in most states).

The moral of the story is: If an employer stops paying you, stop working for
them immediately, demand to be paid immediately, and start looking for another
job. Once they miss a payroll, it usually doesn't end well. Missing payroll is
usually a sign of gross financial mismanagement.

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yladiz
As the other commenters mention, talk to a lawyer. There’s a lot of specifics
that they would know about, that even if we knew about, can’t help with.
Possibly we can recommend some lawyers if you tell us where you’re at.

~~~
daenz
Thanks: Seattle.

I should have probably been more clear about my goal: while I am interested in
recovering what I'm owed, I'm also interested in others experiences with how
things like this have played out for them. Hearing similar circumstances and
results helps me weigh my actions better.

------
cellis
Just bucking the "lawyer up" theme of this thread (even though it is probably
the wisest course of action): you could also threaten to expose him on social
media / the press, unless he cuts you in to the "new" startup. Assuming he
cares about business reputation, this could work out better than going down
the legal route.

~~~
greenyoda
> you could also threaten to expose him on social media / the press, unless he
> cuts you in to the "new" startup

That could be a criminal act (blackmail/extortion).

