The chief executive/chief financial officer of a company that owned rental property in California could be held personally liable for the company's failure to pay wages to two tenants who were performing jobs on the property in lieu of rent, a California appeals court ruled.
Between 2009 and 2016, one tenant kept the water system running, maintained the weeds and provided general handyman services, while the second tenant served as the property manager. While the tenants paid no rent during this time, they received no wages for their work.
After the company terminated the arrangement with the tenants, they filed claims for unpaid wages with the California Division of Labor Standards Enforcement (DLSE) against the company and against one of its executives, who served as the both the CEO and chief financial officer.
The labor commissioner conducted a hearing on the claims. He concluded that the executive and the tenants had entered into oral employment agreements, pursuant to which the tenant who acted as the property's handyman worked an average of four hours per day, while the property manager worked an average of 10 hours per day.
The labor commissioner further concluded that the tenants were entitled to recover regular and overtime wages, and that the executive was personally liable for those amounts.
The company and the executive appealed to the superior court.
Following a trial, the superior court concluded that the tenants were company employees and that the tenant...
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