Asked in Business Law, Contracts and Employment Law for California

Q: Can I sue my former startup for breach of contract and the liquidated damages that were caused?

I have 3 months to exercise options in a startup that I worked at, but I can't because I do not have the money (and I cannot take out a loan or borrow the money). Here's the catch, I am owed almost 6-figures in unpaid wages. My former boss refuses to pay all my wages at once as per state labor laws but instead pays out over a year, and not the whole amount. He said he is only paying for 1/2 of the owed wages; I have since filed a wage claim.

Can I sue my former startup/boss for breaching my work contract, which forces me to be unable to afford to exercise my options?

After speaking with the Labor Commission office, it may take over a year to get to my case. Also, my former startup/boss is planning to raise money Q1/Q2 of next year/2023, and I wonder if that is a good time to open a case against them.

Note: He claims he doesn't have the money to pay me the full amount of owed wages, but I have evidence he hired 4 new employees after I left. I also had an At-Will Contract.

1 Lawyer Answer
Brad S Kane
Brad S Kane
  • Los Angeles, CA
  • Licensed in California

A: You are entitled to your earned compensation within 24 hours of your termination. For each day late, you are entitled to an additional 1 day's up to a max of 30 days.

Since the employer owes you substantial wages, you should speak with a lawyer about offering to release a portion of the unpaid wages as consideration for exercising the options. It may be a win win.

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