Lawsuit Naming Firm’s Employee Must Be Justified

Question: After I left the company where I served as an on-site project manager, a subcontractor sued the company, its owners and five employees, including me, over an unpaid bill.

As a result, I have hired a lawyer at $265 an hour. I earned $33.60 an hour when I was with the company.

Working for a small company with limited assets, where employees are asked to sign contract agreements, vendor orders, etc., doesn’t seem to be worth it if you are subjected to this kind of nightmare.

--M.B., Laguna Niguel

Answer: There’s no doubt that employees have to be very careful to avoid personal liability in acting for the employer.

If the contract you signed states that you are personally guaranteeing the debt, then technically you may be responsible.

The same thing applies if you sign payroll checks without doing the proper calculations for withholding.

You might be personally responsible if the company does not eventually pay it.

Employers have many reasons, however, to pay for your attorney’s fees in this situation. Certainly, they have a desire to maintain you as a “friendly” witness to protect them from liability.

Additionally, according to California law, an employer is supposed to indemnify all expenses of the employee.

Your situation may fall within that classification.

Regardless of the employer’s responsibility, you may have been included in the lawsuit without proper justification.

Just because you signed the contract does not mean that you are responsible if you are signing simply as your employer’s agent.

Call the plaintiff’s attorneys and make them justify your involvement in the lawsuit.

You or your attorney could threaten them with “malicious prosecution,” for which they might be liable to you for not having an adequate reason for suing you.

--Don D. Sessions

Employee rights attorney

Mission Viejo

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Forfeiture of Unused Personal Days at Issue

Q: At our company, which has offices throughout the world, we are entitled to vacation days, personal days and sick days.

I know that accrued vacation days can’t be taken away at the end of the year, but unused sick days can be forfeited. What about personal days?

Our employee handbook says that California employees accrue personal days at the rate of 0.33 for every month of employment and that the maximum we can accrue at any time is four. It says that personal days have to be used in the calendar year they were accrued and that any unused personal days will be paid upon termination.

My human resources department says that any personal days not used during the year will be forfeited at the end of that year.

Is that legal in California?

--J.M., Los Angeles

A: You are correct that California law forbids “use it or lose it” vacation policies under which employees forfeit unused vacation pay at the end of the year. You are also correct in that sick pay ordinarily can be legally forfeited.

Many years ago, California’s labor commissioner, who enforces this law, declared that “personal day” benefits are subject to the same nonforfeiture rule if the employer’s policy gives employees the right to use the personal days for any purpose they might wish. The commissioner also said an employer can legally cap the number of personal days that an employee can accrue and carry over from year to year, just as an employer can cap vacation accrual.

Unfortunately, there are no published court decisions addressing the forfeit of personal days. If you have lost personal days as the result of your company’s forfeiture policy, your best bet may be to file a complaint with the labor commissioner. The commissioner would take action against your employer if he decided that your case has merit.

--Joseph L. Paller Jr.

Union, employee attorney

Gilbert & Sackman