Can a corporate officer be liable for an employer’s unpaid wages to an employee? Yes, a California appellate panel recently determined.
Bridgeville Properties Inc. (BPI) owned property in unincorporated Humboldt County, California, which included eight rental units, a post office and its own water system.
Between 2009 and 2016, Elsie Seviour-Iloff and Laurance Iloff performed various tasks for BPI, such as managing the water system and serving rent notices, in return for free rent.
BPI terminated the Iloffs’ work when it suspected that Laurance was not performing his maintenance jobs, was stealing equipment and supplies from BPI, and was using the water rights for a private venture.
The Iloffs filed claims with the Labor Commissioner alleging that they were each owed $132,880. After a hearing, the Labor Commissioner concluded that the Iloffs were entitled to recover wages, overtime wages, liquidated damages, interest and waiting time penalties.
In addition, the Labor Commissioner found that Cynthia LaPaille, who served as chief executive officer and chief financial officer of BPI during the relevant period, was personally liable for those amounts.
LaPaille and BPI appealed to the Superior Court, where a five-day trial was held. The court determined that the Iloffs were employees of BPI and awarded statutory damages, but it found that BPI’s failure to pay was in good faith, declining to award liquidated damages or to find LaPaille personally liable for BPI’s failure to pay...
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