Last month, the Superior Court of New Jersey, Appellate Division, reaffirmed that individual corporate officers are personally liable to employees for unpaid wages. So, if you are owed wages, and your employer files for bankruptcy (or otherwise fails to pay your salary for whatever reason), consider hiring an experienced NJ employment lawyer to sue the individuals who manage the company — and who may drive to and from work in fancy cars and wear fancy suits and watches — while your hard-earned wages remain unpaid. Yes, the “suits” could very well be made to break out their personal checkbooks to pay your wages or to settle wage and hour claims.
The recent New Jersey case, Teleki v. Talk Marketing Enterprises, Inc., involved a claim made by an employee, Margot Teleki, who, under the terms of an Employment Contract, was to be paid a salary of $4,166.67 twice per month, for a period of ten years. When the company encountered money problems, it unilaterally reduced Ms. Teleki’s salary, and later stopped paying her entirely (well before the ten years was up). Ultimately, the company filed for bankruptcy protection.
The bankruptcy filing did not sway Ms. Teleki, though. She pursued her lawsuit against not the company, but instead the corporate officers of the company — three top-ranking individuals who managed the company (and were its principal shareholders). Ms. Teleki’s argument was that under New Jersey law, the individuals were liable for her unpaid wages — personally.
The court initially ruled against Ms. Teleki, dismissing her wage claims against the individuals, in part, because Ms. Teleki was not asked to perform any services after the company reduced her salary. The court also noted that the individuals had not signed any document personally guaranteeing the payment of her salary.
On appeal, however, the court reversed and ruled in Ms. Teleki’s favor. It relied on the plain language of the Employment Agreement, which stated that she was “entitled to receive her base salary without regard to performance for any targets, sales goals or achievements.” It also reaffirmed prior cases holding that there exists an obligation on the part of corporate officers for payment of employee wages when the company itself defaults on its payment obligations.
Indeed, the New Jersey Wage Payment Law, N.J.S.A. 34:11-4.2, provides that every New Jersey employer is required to “pay the full amount of wages due to his employees at least twice during each calendar month.”
The statute further provides that for purposes of the obligation to pay wages, it is not just the company itself that is on the hook. Indeed, the individual officers of a corporation who are responsible for its management, are to be treated as “employers,” such that if the company fails to make wage payments, the individual officers may be held personally liable to the employees for the full amount of the wages due.
If you are an employee who is owed wages, and your employer has filed for bankruptcy (or otherwise fails to pay your salary for whatever reason), you may very well have a claim against the officers of the company. Promptly seek the advice of a New Jersey employment attorney who can protect your rights.
The Resnick Law Group, P.C. has been advocating the rights of employees, and handling employment law matters on behalf of employees, for more than 30 years in and around New Jersey and New York. If you feel your employer or prospective employer has violated your rights, contact the Resnick Law Group, P.C. at 973-781-1204 or (646) 867-7997. We are located in Roseland, N.J. and Midtown Manhattan on Broadway.