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Ask HN: Should I sell out the startup that misled me?
142 points by nocash on June 13, 2016 | hide | past | web | favorite | 97 comments
Summary: Startup not paying wages or tax on employees, to claim unemployment benefit I have to report them.

Hi guys, I'd appreciate some outside perspective here.

I've been working with a startup for about two months as their CTO. Small team, three/four developers depending how you count. Handshake deal said moderate salary until series A but with equity.

I've been pushing and pushing for a contract stating the terms, but there always seemed to be something else the CEO had to do. However, I met the rest of the team and it all seemed legitimate.

Around the two month mark, I dug my heels in and said contract or I walk. Next day I have a meeting with the CEO and it comes out that there's no salaries being paid, people are working for equity. I explain that this isn't appropriate for my situation, to which the CEO responds with more work for me to do.

Obviously, I should walk away at this point (or ideally weeks before), but there are some twists:

1) The work that I produced for them is still mine, as no copyright transfer has been signed. They'll almost certainly be trying to sell this / bring it to investors.

2) It's not legal to work only for equity in my country, there's a minimum wage, and each employee has to be registered and tax paid on them to the government. I went to apply for unemployment assistance and was told that regardless of whether I was paid, I was considered employed, and thus had no entitlements. Furthermore, as I wasn't registered the company was not meeting its tax obligations in hiring me.

This brings me to the crux of my problem: If I want to claim unemployment benefit while I look for a real job, I must torpedo the old company. This is bad as it not only can hurt my reputation, it will negatively affect the co-workers who have previously worked for low wage and equity.

My feeling is to walk away and cut my losses, but I thought the community may have other suggestions.

Thanks for looking.

You have been scammed.

Leave immediately, take your IP, and don't even consider doing anything else until things are in writing and the backpay, etc are resolved.

I would go a step further and get the hell away from these guys. If they've scammed you, they've likely scammed others and/or will scam people again. This could be you again, customers, or your investors. You do NOT want to be part of a team that scams their investors.


I hate to ask for an explanation here, but I can't find what IP means in this case.. Can you define?

I guess he's referring to Intellectual Property, so the code probably.

This from OP: 1) The work that I produced for them is still mine, as no copyright transfer has been signed. They'll almost certainly be trying to sell this / bring it to investors.

Intellectual Property.

Intellectual Property

I don't know what country you're working in; and what the general climate is, but here's my words of wisdom:

When I was involved in the startup scene in Silicon Valley, there were a lot of clowns who didn't understand what it means to run a company. They were charismatic; but at the end of the day, they didn't understand that they have to pay their employees in exchange for their labor. Often, these clowns assumed that things would work out in the end, and that hard work will always reward itself. They wanted everyone to make a sacrifice for their own dreams.

My opinion: I would have walked away at the two month mark. At day one, I would need to know that everyone under me is working for equity; because that changes the work dynamic significantly. The demands made on someone working for money are different than someone working for equity.

Furthermore, a tech startup is a for-profit venture, so you always need to do what's in your best interest, and your subordinates best interest. Ideally, you can torpedo the clowns enough so they can't pull this kind of stunt again; but it's also import to look out for the people working under you.

> it will negatively affect the co-workers who have previously worked for low wage and equity.

No. The CEO's actions negatively affected your co-workers, not yours. Do you suppose if you don't report this that life will become wonderful for them, that they'll suddenly get millions of dollars from their equity in a company that can't pay its employees? That seems very, very unlikely to me. And if the situation is this precarious, than any nudge could break the company.

Definitely get a lawyer. Ethically, though, you have no reason at all to feel bad about reporting them. You'd be doing the right thing.

You can always give them a heads up too.

I've been in a similar situation some years ago. My contract was not signed on time, and I started working some weeks before the contract date, with a "gentlemen's understanding". I was also owed back pay for consulting work done, plus reimbursement for office expenses, and travel expenses to fly to and from the company's other office across the world.

I kept asking for the reimbursement and back-pay promised earlier, some months later they just refused, and I was not paid. I was offered stock options (not even stock/equity) instead of money. That's when my team and I saw the crap going down and started preparing for the worst.

You need to have all your communication about this problem documented, including if possible the responses from the CEO and others.

You may need to consult an employment advisor or lawyer for advice, if your department of labour can't provide this to you. You need to be crystal clear about your situation and repercussions if you choose to torpedo this company.

If things are really as bad as you say they are, you don't need to be too worried about your reputation - I have been through this situation and it is not hard to manage. As for co-workers, I sympathise with their plight, but you need decide for yourself how much you value your career (or don't) by not taking action now. Also, your co-workers ought to be smart enough to see what's happening.

In my situation, I went and spoke to a government officer in our department of labour. She told me that I needed to engage a lawyer in my situation. Legal fees would have been greater than the money I was owed. In the end, I filed a police report for the record, with complete documentation on everything that happened and details of the compensation owed to me.

I lost a few thousand dollars, chalked it up to experience and moved on. The company's office in my country had to close, their hardware and other equipment was seized for non-payment of rent, and they wasted many times the money they could have just paid me to build a great product. As for the product, their launch was delayed 20-24 months but I believe they did get something out.

What's even more pitiful is that they had a few million in funds, were already cash-flow positive on a previous product, and could easily afford to pay what's due.

Bottom line - if the company is run by a money-grubbing skinflint with a tendency to shaft his employees, you have every right to do what's good for you.

Thanks for sharing your experience. I don't expect to see any of the back-pay, but as this is blocking unemployment benefits it's currently costing me. I think I'll follow your example unless a new job is hard to come by.

Sure, glad to share.

Keep everything professional, and unemotional. Document facts.

Whether or not a new job is hard to come by, you are in a toxic situation, and if you are anything like me, your physical and mental health is already being affected.

Even if there is an offer of compromise by the CEO, I would be very suspicious given his past history.

First off, IANAL and this is not legal advice, you absolutely should consult an attorney.

> The work that I produced for them is still mine, as no copyright transfer has been signed.

That is likely untrue. If it was made while you were an employee, during the scope of your employment, in the US (rules in many other places on this point are likely to be similar, but may differ in important ways) it would seem to meet the definition of a "work made for hire" which would be owned by the employer unless there was a signed agreement to the contrary. [0]

> It's not legal to work only for equity in my country, there's a minimum wage, and each employee has to be registered and tax paid on them to the government.

Depending on the laws of the jurisdiction where you are working and the laws of the jurisdiction where the firm is incorporated, as a person with knowledge of this violation, and/or as an employee with knowledge of this violation, and/or as a corporate officer with knowledge of this violation, you may well have legal obligations to (1) bring the violation to the attention of the government, and/or (2) bring the violation to the attention of the corporation's board of directors. You may be liable for sanctions if it later becomes discovered that you knew (and maybe even, as a corporate officer, reasonably should have known) about the violation and did not fulfill those obligations.

For that reason, I would recommend consulting with an attorney as to your options, and the risks and benefits of each, in this circumstance.

[0] See the definition of "work made for hire" at 17 USC Sec. 101, and 17 USC Sec. 201(b) for ownership of such works.

If he's an employee there ought to be an employee contract somewhere and employer taxes paid. Since he's not being paid, a contract never got signed and likely the taxes did not get paid OP can either go and enforce his position as an employee or opt to be treated as a freelancer, in which case a whole pile of other legal issues kick in (even then you need some paperwork).

As it is I think the hardest thing for him to prove is that he worked there at all.

Lawyer up and get them to commit to something in writing to the lawyer. All this very much depends on the location he's in (and the location of the company, might not be the same), so any references to actual law would need more information.

> If he's an employee there ought to be an employee contract somewhere

The existence of an employment contract, in many jurisdictions, doesn't require that contract to have been reduced to writing or other physical form. Contracts exist in law, documents just provide evidence of the existence of contracts and their specific terms.

> and employer taxes paid.

Once the employment contract exists, wages are due on the terms in the contract and employer taxes are due under the conditions set in law (often, based on wages paid), and failure to pay those things may be (in the first case) a breach of contract and (in both cases) a violation of the law for which state action is warranted, but is probably irrelevant to whether a contract exists in the first place.

> Since he's not being paid, a contract never got signed

Contracts often, as noted previously, don't need to be either reduced to writing or signed to exist, and, in any case, its quite possible for one to exist (and even be in writing and signed) without required payment under the contract taking place (that's a breach of contract, of course, but the main point of contract law is to deal with breaches.)

> and likely the taxes did not get paid OP can either go and enforce his position as an employee or opt to be treated as a freelancer

I am aware of no jurisdiction where failure to pay required wages or employer taxes would give a worker to option to elect to be treated as an employee or a contractor (and certainly, if, as you suggest, no contract for their work exists, then they don't have that option as they are neither an employee nor a freelancer.)

Wouldn't there need to be some consideration for an implied contract to be legal though?

There needs to be consideration in the contract (that is, what is agreed to.) Actually providing the agreed payment is performance of the contract (or, if it fails, breach of the contract), not a prerequisite for the existence of the contract (unless its a contract, that, by its terms, is accepted by performance.)

> while you were an employee

Only a "handshake deal" employee with no wages, though.

> Only a "handshake deal" employee with no wages, though.

A "handshake deal" is often (depending on applicable law and detail of the deal) a valid contract -- the lack of specificity on wages due may or may not be fatal -- the fact that wages were not paid may merely be a breach of that contract, not a sign that it did not exist.

To the extent that there is a lack of clarity on whether an employment and/or corporate officer relationship existed, that's even more reason to contact an attorney.

The lack of wages is a specific breach of the contract: lack of exchange of value. If you and I make a contract that I will give you $50 and you give me a used bicycle, but then you take my $50 and don't give me a bicycle, it will generally be held that the $50 that you now have is still mine. Either that, or the bicycle is mine.


The contract exists, but it is being breached in such a way that the fundamental clauses are not satisfied (ones directly pertinent to the Consideration).

The principle of Consideration says that if you and I made an agreement which says that I will give you $50 and get absolutely nothing, that agreement could not be a valid contract. Yet, that very situation is what the valid contract has been reduced to via breach.

A handshake is not a valid contract, and in any-case, the other party agreed to a moderate salary until a series A on that same handshake.

> A handshake is not a valid contract,

No, but it can be a valid method of signaling acceptance where the other requirements for a valid contract exists.

> and in any-case, the other party agreed to a moderate salary until a series A on that same handshake.

As I said, the absence of specificity on salary may be problematic to the existence of the contract (or not; whether the salary conditions agreed to as described are specific enough in the circumstances is potentially a tricky question even with a known jurisdiction, and there's been no specification of where this agreement occurred and what law it would be governed by), and the absence of payment of wages is quite likely a breach if a contract exists (but probably immaterial to whether a contract exists in the first place.)

You're asking specific legal questions from people who don't even know where you live. Please please talk to a local lawyer. Initial consultation are often free and just because you talk to a lawyer doesn't mean you have to sue anyone.

I understand your point, but I think part of his question also involves advice from a business ethics, and a 'what would you do -- is this normal?,' perspective. I'm just saying I think it's a reasonable question before/while pursuing a lawyer

The only sensible advice here is "Consult a lawyer." And the reasonable question to ask is, "How/where do I find a good lawyer?"

The rest of this thread is basically noise.

(Also, don't ever start work without a contract dammit. That's the first sign to walk away.)

No one wants to be the "bad guy", but blowing the whistle does not make you the bad guy. It prevents this company from screwing over countless people in the future.

You should file for unemployment. You also should send them a letter formally requesting they pay the wages they owe you based on your verbal agreement regarding salary and equity. If you are uncertain how to phrase this letter, see an attorney that specializes in employment issues.

They're purposefully misleading you. Have no shame. Consult with a lawyer, then issue them an ultimatum: wages and taxes paid, or you'll rat them out and prevent them (via lawsuit if necessary) from using your IP. I bet they'll miraculously find money somewhere. Be sure to fix a deadline, otherwise they might just try to delay this forever. (IANAL)

The Lawyer is an absolute must at this point. Given that you're now aware of what's going on, it is entirely possible that you have legal responsibilities that you are not aware of to report or otherwise act on the information.Plus a lawyer should know how to phrase this kind of things so it isn't legally extortion/blackmail. (IANAL)

(fix minor phrasing error.)

Also, if there is anything officially linking you as an officer in the company (you state you were CTO), you could be held partly liable for the tax/wage fraud if you don't report it. (IANAL)

Even if that were not the case, I say report them. You'll be helping the other people in the company that you like by preventing the CEO from walking over them in the future (if the CEO would do it to another officer of the company, they would certainly do it to the rank and file). It will also set an example to other start-up founders not to screw over people they want to employ.

When I encountered clowns that ran companies like the post described, there's probably no money for back wages and taxes.

My guess is that the founder is three steps out of the poor house himself (or herself.)

It's almost certain the CEO is under major duress and has little cash. Most people are dishonest not because they like to be, but because they have their backs up against the wall.

1. Decide you are going to leave, be confident it's the right choice (it is)

2. Protect yourself, by understanding the legal implications with your own research or with a lawyer.

3. As the person in the position of power here (you are) have compassion.

4. Explain that you cannot stay, but you don't want to hurt them unnecessarily.

5.Make a plan for equity compensation, full rights to all of your work (at least for your own and further commercial use), while allowing them to use it under a license that doesn't blow up their lives.

6. Write your letter of recommendation for moving on to the next thing, and have it be clear that you finding job security is a necessary condition for things to proceed.

...Or, blow it all up, while trying to minimize the negative consequences for yourself. Which could be fair enough.

> Most people are dishonest not because they like to be, but because they have their backs up against the wall.

This is not my personal experience.

> As the person in the position of power here (you are) have compassion.

He just got robbed of months of wages. Sure, he has the hand, but he's still undeniably the victim.

I'm all for compassion, and understanding but sometimes things are quite clear cut. I'm not arguing for vendetta, just reparation.

The CEO not having any cash is no excuse for breaking the law.

I'd like to up-vote this response harder.

I suspect this is the case.

Well, hopefully you're young a flexible enough that you can bounce back quickly after learning a valuable lesson.

A few years ago, I worked with a guy for 18 months without pay. I bounced back!

In our case, we didn't try to convince other people to work for us for free.

Now that I think I can read between the lines, give this guy (or gal) about a week to see the error in his ways. Make sure it is on friendly terms. For example, every day, continually engage him (or her) in discussions about the legal issues of employing other people.

If he does not see the error in his ways, torpedo him so that he can't accidentally screw people over like this again.

If he does see the error in his ways, you're going to have to take a personal hit yourself. Disband the company on amicable terms. If it's a good idea, and everybody owns most of the IP, you can get back together in a week or two and find a new leader.

I'd agree with you... but a really good friend of mine was in exactly this situation and that company, pretty much on the day that he left, ended up selling for big money to a competitor. So, having learned the hard way (but not the hardest way, it could have been my ass on the line instead of my friends') I would go the lawyer route, just in case.

Send them a formal letter reminding them that the Intellectual Property is yours. If they have any investors, you might want to copy them on that letter too.

Regarding the government compliance, I think it's safer to err on the side of the law than on the side of someone who is only promising future rewards, with no commitment on their part.

If you're in a different country than the company, it may be hard (and costly) to assert your rights, so keep that in mind: it's a liability for you to do too much for free. You're basicaly extending them a line of credit hoping to be paid back but with a non-certain process to recover your investment if they don't stay true to their word.

Think of it this way, "Do I want to be a C-level employee of a company I know is cheating tax"?

Chief Going To Jail Officer doesn't look so good on the ol' CV...

That's a terrifying perspective. Thank you.

Basing on my experience, there is no such thing as "gentlemen's understanding" (or "gentewomen's understanding").

Gentlemen/Gentlewomen take responsibility for their actions/agreements and sign contracts.

Again, basing on my experience, if somebody does not want to sign a contract, they're already planning on taking advantage of you. In this cases, my approach is to backtroll and say: "okay, I'll work for you without a contract, but you have to pay me in full, upfront and in cash". This suddenly puts them in your position (all risks and no guarantees) and usually ends the discussion, with them either agreeing for reasonable terms and signing a contract or stopping wasting your time (in any case, it's a win).

Note: I have to admit that "they" agreeing to pay in full, upfront and in cash never happened to me, and if that happened I don't think I would agree.

A company that steals your time on the basis of a vague promise of payment that they have no intention of keeping? That is both illegal and immoral, all over the world. Yes, burn them to the ground.

I really don't understand why this keeps coming up. In any other industry, the answer would be obvious: don't work for free.

What is it about software developers that makes them think there's even a question about this?

Nothing. I don't know a single programmer that works for free in Spain. Graphical designers, on the other hand, I've heard dozen of stories of them working for nothing "to assemble a portfolio" for big advertisement agencies, the kind that put ads in tv or in giant billboards.

Also anything art related: rich family fine arts graduates that work for peanuts in semi-public institutions to "make a name".

I totally agree, same in Italy and to an extent also in UK. I think webdevs used to be caught up in the same dynamics up to 10 years ago, and they've since wised up (all those "Fuck you, pay me" slides eventually must have had an impact); but I'm sure it still happens here and there.

I don't know why you assume the exact same thing doesn't happen in other industries.

Very difficult stuff. Only a lawyer can answer this. What I can say is get out - now - and don't do another second of free work for this clown.

I've been in a similar situation myself up until very recently (hence the throwaway)... Was initially (briefly) paid as a contractor, money supposedly running out, volunteered to take equity instead to help keep the project afloat, equity never materialised. After 2 years the whole enterprise is now in the final stages of falling apart. Speaking to employees of another of the owner's companies, they're in a similar situation of being massively underpaid with vague promises of equity that have also failed to materialise. Any attempt to confront the owner on this is met with a lot of hand waving and/or an abrupt change of subject.

Thankfully in my case I maintained some independence and kept up enough other contracting work to stay afloat, but it still leaves an awful taste in the mouth. Unfortunately I can't say the same for the employees of the other company who are still being strung along day by day.

If you really need the unemployment I would blow the whistle. Your livelihood is always more valuable than a reputation. I doubt your reputation will take a huge hit for reporting what sounds like a dishonest company.

>Your livelihood is always more valuable than a reputation.

I can't say I agree. There are plenty of instances where your short-term financial situation could be a whole lot less important than your long-term reputation within an industry.

Livelihood encompasses more than just financial. If it were just money most people could get by. The stress on a person and their family while job hunting, especially at the CTO level, can be pretty huge. I would much rather have some runway to find the gig I want rather worry about my reputation.

I get the impression that this is a young guy. CTO of a startup means something different than CTO of an established company.

Most likely, it's a bunch of recent college grads working on someone's pipe dream, but there's no real leadership that would translate to a company.

I don't think asking your employer to pay you for your work is going to damage your long-term reputation in the industry.

I can only think of one person in the entire world who has damaged their reputation in the programming community enough for me to care.

At the same time, any company that would look down on you for doing this is a shitty company.

"The only thing necessary for the triumph of evil is that good men should do nothing." --Edmund Burke

Immediately consult with a local attorney familiar with employment law in your locale.

What you are describing is both crime and tort. Even if you decline to attempt to recover your personal damages in a civil action, you do have a moral obligation to your fellow workers to report the crime. And your own attorney will help you report it to the state's prosecutors such that it is crystal clear that you were not a willing conspirator.

You are most likely an officer of the company (unless you are "CTO" informally?). You know the company to be violating local employment law and taxes. You probably have an obligation to attempt to do something about this if your CEO will not. Conversely, you may (?) bear some responsibility if you do not take action.

IANAL, and this is not free legal advice. My advice is to talk to a lawyer ASAP. Your inital consultation is likely to be free of charge. Consult.

Stop working. Consult lawyer. Seek alternate employment.

They didn't just "mislead you", their behavior is outright criminal.

If you don't report them more people will be victimized by their antics. So you have a moral duty to stop that from happening.

> If I want to claim unemployment benefit while I look for a real job, I must torpedo the old company.

No IP assignment contracts, broken verbal contracts, broken laws... you're not the one torpedoing the company.

> it will negatively affect the co-workers who have previously worked for low wage and equity.

You've already established that it's actually "no wage" and effectively "no equity" - the only thing guaranteeing equity is a verbal contract / handshake deal, and they've already reigned on one of those. What will negatively affect your co-workers is continuing to work for this company.

And while I might hesitate to take unilateral action on behalf of others - I hate people making decisions for me - taking action on behalf of yourself is entirely reasonable. Hell, taking action on behalf of others is sounding rather reasonable here.

Update: Please upvote this for future readers.

Thank you to all who commented. The general advice of get a lawyer is absolutely correct, I had not considered the potential backlash this could have on me if my name is associated with their illegal practices.

Calls to 'name and shame, while cathartic, probably aren't going to be very useful. There isn't a database of bad actors that has any reputability, and the legal consequences may be dire.

I'm just about scraping by without wages, so the ideal course of action seems to be to try and get a cheap/free initial consultation from an appropriate lawyer before deciding on what to say to the unemployment services. I think, however, getting a new job pronto would be a better use of my time, though both may be possible. Luckily, I have no dependants so the mistake is mine.

I don't expect to see any wages from this company, the CEO appears to be living in another world to the point of giving me more work to do after bluntly being told I couldn't make rent this month, and I'd borrowed to make last month's. As many have said, never work for free, never work without a contract in place (or cash in your hand). Why assume other people's risks when there's information asymmetry?

With respect to the code, IP suits are probably the most painful type of suit, so I'll hold off on pursuing them unless they happen to hit it big. And if they don't, there's nothing to claim for anyway.

I'm not happy about the prospect of ruining the equity of my co-workers, worthless as it may be, so unless I'm really having a hard time getting another job, I won't apply for unemployment benefit. Painful as it is to continue to suffer a loss for this, I think the relatively small amount might be worth avoiding the fallout.

For those requesting the country, as this has quietened down a little I can tell you it's Ireland. The laws on employee/contractor and IP assignment are relatively clear here, but, obviously, a lawyer is required.

I have been taken for a fool, please learn from my mistakes.

You're not selling them out, you're reporting a crime.

I am a developer and have been seen many similar "positions" in the past (particularly 10 years ago, .com boom).

IMO they are intentionally trying to screw you. Do all you can to protect yourself, but be formal / polite where possible.

You would do all the employees (and society) a favour by calling them out.

run. if they get you options, you're gonna get diluted to hell anyway. if they get you equity, you gonna get ruined by taxes for something which may very well still be worth not enough in the end. it's probably not even worth litigating for those. but you can take your ip away and demand a contract for its transfer, which could at least recap some of your losses. whatever you decide, I'd suggest having a lawyer write out the details and not acting until the agreement is in writing.

Focus your energy on your next position. These guys are clowns and plotting retribution just drags you down to their level. Just walk away.

I strongly encourage you to consult with an attorney well versed in local employment law before making any additional statements (either publicly or to your 'employer').

Certainly do not take any actions or issue any ultimatums until an attorney has approved of said actions.

If the company is this bad at money so early, are they really likely to get better at it? This is what a dying company sounds like, not a growing company.

I have trouble believing you'll be hurting your coworkers. If no salaries are being paid, they'll be in the same boat as you very soon when they start trying to claim unemployment.

do nothing about something that is wrong is evil itself, don't be like everyone else.

It sounds like the situation is well within the threshold of complexity that would benefit from an attorney. You might be able to consult for about 30 minutes and pay around $100 to clear up a lot of questions in a sticky situation like this.

I'm apalled when HN threads like this pop up.

Here's the outside perspective: You're working for them for free. No, sorry, you have a handshake but good luck taking them to court with that.

If you want to continue work for them and do it just for equity, you can get around minimum wage rules by being "self employed" on paper and contracting out to them. You'll have to do your own paperwork but this is also a good thing. You can invoice them for equity.

A handshake is only worth the paper it's written on. An unpaid invoice is something you can action.


2. Document everything. Go through your calendar since you first met them and write up notes for every conversation. What was said and what you thought it meant, and any artifacts from those meetings (emails, chats, texts, documents). In a you-said vs. they-said contest, it's often the best documentation that wins.

3. Don't leave until your lawyer tells you to. Leaving may cause you to lose rights to compensation or your IP. Ask...

4. A local lawyer for yourself and, if the company isn't headquartered in your country, find a lawyer where the company is based.

Good luck.

- Phil

> Startup not paying wages or tax on employees, to claim unemployment benefit I have to report them.

They could be considering you as a contractor. Research the difference between contractor and employee. Depends on your working relationship with them.

EDIT: You can only be a contractor if they are actually paying you. If you are getting no money, not sure what that means.

> You can only be a contractor if they are actually paying you.

You can be a contractor if they've agreed to a legally-valid contract (which requires some kind of obligation of consideration, whether payment in money or something else), but they could fail to perform that obligation and you could still be a contractor (just as you could still be an employee if the company failed to pay wages), they'd just be in breach of their duty under the contract (whether its an employment contract or otherwise.)

A lot hangs on this distinction in the law, but the guidelines for determining seem to strongly favour and employee interpretation. Definitely lawyer territory though.

Being a CTO and being a contractor seem like mutually exclusive conditions, at least where I'm from (California). It's not B&W entirely, but it's far more likely than not (at least here) that you should be an employee with that title.

>EDIT: You can only be a contractor if they are actually paying you. If you are getting no money, not sure what that means.

Breach of contract?

Seems sorta similar to this post I saw a few years ago: https://workplace.stackexchange.com/questions/23920/

Best of luck. Definitely leave, should probably talk to a lawyer, and 100% follow their directions.

From a personal/financial perspective, you're probably best just walking away: hiring lawyers is expensive. But walking away silently enables them up to repeat their crimes. Reporting them criminally and giving them a record will make it harder for them to victimize more people.

Careful, please. If the business has been involved in potentially illegal actions, and OP is or has been involved with the business in ways that aren't necessarily entirely clear or documented, then OP might have all sorts of reporting requirements and/or responsibilities in relation to those actions.

This is the kind of situation where you really do need at least an initial consultation with a suitable lawyer to know where you stand. It might well be best to have the lawyer also write the appropriate letters to notify the appropriate people of appropriate things in the appropriate ways and without saying anything inappropriate that will get OP in trouble unnecessarily.

Can you be specific about the country? Where I live a similar thing happened to a friend of mine, and he finally managed to discuss with the employment agency who agreed to grant him assistance in the end. He didn't have to mention the company's name in the end.

It's not clear to me from the summary whether or not you are currently getting paid. If you are, perhaps an option is to keep working while you find a new job. I don't totally understand torpedoing the company so you can get your unemployment insurance.

Being paid for your work is a basic human right.


Absolutely report them for breaking the law. If not just for you, but for everyone else they've fucked over. And don't call it "selling them out". You have absolutely no obligation to cover for their shady shit.

I think your gut is correct in this case. You're likely not going to get much out of this other than stress, move on and chalk it up to a learning experience.

This type of reaction just reinforces bad behavior by the people leading these companies. They'll continue running a shady business and screwing people because they figure nobody will bother confronting them about it.

Interesting side note, "crux of my problem" let me bet the country is Germany.

How come? I've seen native anglophones use that idiom often enough - pretty sure I've used it myself, in fact.

Agreed. I don't see anything Germanic about that phrase. It's part of my everyday vocabulary, as a native English speaker, and FWIW, crux comes directly from Latin, meaning cross.

Thanks for the insight, this is wonderful. I love when idioms are translated word by word - or better said use the same words in different languages. Thanks!

When in doubt, consult a lawyer.

If you're young, take it as a life lesson and move on. Whatever financial gain you get from "going after them" will not be worth the time and emotional costs of suing. Not to mention the cost of an attorney.

In the US the state government will often handle going after them for you. I imagine other countries have this as well as the US is about 50 years behind in labor laws.

What's the company name?


Definitely throw them under the bus, immediately.

No good can come from allowing criminals to go about their crimes without justice.

Perhaps you should name this company here, since this has made the front page of HN.

Consult a lawyer first. I'm not one, and am not a legal expert but such a statement sure sounds like potential defamation to me. Make sure you have proof to back up any statement you make.

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