61

I've been working at a startup for about 18 months now. I used to report to the key engineer for my division, but he left a couple months after I started. It's to my understanding that he worked crazy overtime for a year straight, and the CEO/boss reneged on several promises (stock options, bonuses, paid time off, etc).

Despite trying to keep the guy on board with massive last-minute raises and bonuses, the key engineer quit. The boss also withheld his final pay check and various other cash-based guaranteed benefits until he was actually sued (successfully) by said engineer.

The next day, I inherited the position of "key engineer". While I can do a lot of the work he used to do, there's no way I can do all of it (high degree of specialization), nor can I keep up the same amount of overtime with a family and elderly parents to take care of.

I'm planning to resign soon, since the the CEO has apparently pulled the same stunt with me as he did with my former colleague (apparently the agreements the boss provided me were "draft" agreements, and they only had my signature, and not a counter-signature from a C-level executive of the company). However, if I quit, the company will have to stop production (I'm the only Professional Engineer/P.Eng. on staff), and the project will be canceled (this isn't a guess or false modesty, but rather a certainty; unlike in similarly themed questions on this site). My boss has also threatened to sue me if I leave at this time, which I'm not concerned with, as I'll serve the full notice period (all engineers have 3 months notice periods, corresponding to 3 months severance pay in the event of termination of employment).

Is there anything I can do to help the junior engineers in case the boss decides to shut down the company on the spot? All engineers are entitled to at least 12 weeks of severance pay, but I have a very strong suspicion the boss will try to withhold final paychecks, bully junior staff into not claiming full severance, etc. These kids don't have the resources to take this guy to court like our former key engineer did.

Thoughts so far:

  • I can't just inform the junior engineers in advance, as that would be "enticement to leave", which would be grounds for me being (successfully) sued.
  • I've consulted with my provincial labor board, and there's nothing they can do prior to five weeks after an "incident", so that's more than a month without a paycheck in a bearish local labor market.
  • I can resign on a payday so the junior engineers have at least two weeks' pay in-hand.

If worse comes to worse, I will be gifting each of them two weeks of pay out-of-pocket, since it's a drop in the bucket for me at this stage in my career. I just really don't want to see these guys being evicted or getting swindled out of 12 weeks of pay they've earned.

Update

What a morning. The usual direct deposit of checks didn't go through last Friday, and it almost came down to a shouting match when I demanded the boss cut physical checks on the spot. I made a point of walking 10 minutes down the street to deposit my check, and most of my colleagues did the same.

I tendered my resignation after depositing the check, and the boss is furious. We spent about 20 minutes with me declining multiple raise offers and tiny bonuses. I literally asked for $XZY,000.00 (the combined value of the stock and bonuses in my "draft" agreements) on the spot, and he lost it. He now has to "fly out to head office to do damage control". I'm still expected to be in the office, but my laptop was confiscated and all my accounts and key fob were deactivated. I'm expected to coordinate with another employee to get into the building in the morning, which I declined, and the boss is trying to make a case for me "being uncooperative" during my notice period and not being eligible for pay during that time.

Finally, I told the boss I wouldn't be signing off on any new designs while I didn't have a laptop or access, as it would be dishonest to sign off on something I can't actually review, and it could incur massive liability for me. I'll update this thread with anything relevant as this proceeds.

Update

The company is folding. The boss made an informal announcement that severance pay may be delayed due to "the selfish choices" of some members of staff. I printed off the labor board's dispute resolution forms to help expedite having the total severance paid off immediately in case the company runs out of funds and tries to avoid paying severance. Fortunately, all the checks cleared for all employees.

Update

Yesterday, after lunch, me and the team come back to the office to find the doors are locked, and backpacks/coats left outside of the door. Nobody has e-mail, VPN, etc, access. So, the first thing I do is get everyone's personal contact info, and prepare a "dispute resolution package" provided by the provincial labor board. I fill out the concerns/issues, the amount of pay I feel I'm owed and why (ie: vacation, salary, equity, etc), and sent a letter to the boss' personal email stating I was concerned why the doors were locked without notice, and to please read the attached labor board letter which notes concerns for myself and my colleagues. About 30 minutes later, I receive an e-mail with a brief rant, followed by a suggestion that I "*#$% off".

The labor board package normally requires that the employer be provided with 2 weeks to respond formally to the request. I replied back explaining this, and that his reply of "**** off" was interpreted as officially declining to respond to the initial request. I included the e-mail, plus full headers, as part of a package I printed off, and couriered to the labor board. This works out quite well for me and the team, since it means the team should likely see their severance pay before end-of-month, rather than having to wait an extra 2-3 weeks on top.

The boss then called me, said some nasty stuff, and hung up. For the rest of the week, most of the team agreed to join up at a cafe near our old office, where I'll be providing letters of reference, resume writing help, paying for lunch and drinks, etc. I think they'll get through this OK.

Who would have thought being told to **** off would be so helpful?

Final Update

It turns out I didn't need to help the boys with their paychecks, as I ended up investing just shy of $8000.00 in legal fees to "light a fire" under my now ex-employer's feet. The guys all got their severance checks for about 2 months of pay. We could try and go for the full 3, but the boss might actually not be able to cough up the full amount.

The boss' first move after locking us out was to inform our backer/financier what was happening, and to freeze/withdraw funds for operation of the company to limit liability. The backer refused due to the legal repercussions this could bring about, but the boss was apparently also a backer in the operation, and tried to withdraw "his share" of the remaining capital (apparently he was a 1/3 shareholder). After a lot of nasty legal letters written by our respective attorneys going back and forth (almost comical, seeing multiple exchanges via secure courier per day; like watching two people send mean Tweets back and forth via snail mail), we all (myself included) got our checks.

My best analysis is that the other investors coughed up their "share" of our severance checks, and the boss has opted to withhold what he owes. I won't be pursuing any further action against him, other than sending some updated correspondence to the labor board. Since they'll be handling the bulk of the grunt work, it's no skin off my back to have one more letter drafted.

I'm glad I was able to help the boys (they were in no position to cough up $8000.00 on the spot), and that they got to learn something about the nasty side of this industry without being burned or becoming too jaded/cynical themselves. I encouraged them to "pass it forward" when they eventually become wealthy engineers themselves, and gave them each a half-dozen sealed letters of reference. I'm going to take a few months off, and then probably start a small corporation for consulting work. I can't take on any of the boys as employees, as the non-compete is potentially enforceable, but it'd be a one-man-show anyways.

Thanks everyone, for listening, and for the advice!

  • 3
    Do you know these other employees / junior staff personally or a family member related to them/you? - Seems strange to be that concerned with them. – G.T.D. Jun 18 '17 at 23:54
  • 2
    Why can you not voice your opinions about the company privately / after-hours to the other employees? Do you have another employer lined-up prior to resigning (i.e. looks like you would be recruiting)? – G.T.D. Jun 19 '17 at 0:00
  • 51
    @B1313 the world is in a pretty sorry state if simple concern for the fair treatment of one's fellow human beings is something to be seen as 'strange'. – AakashM Jun 19 '17 at 8:41
  • 2
    @AakashM but that is how it is. – kifli Jun 19 '17 at 14:45
  • 20
    Wow. Hollywood level drama. Your staff is lucky to have you fighting for them. – am21 Jun 19 '17 at 20:48
15

I know I'm a little late here, but it looks like the company was showing a lot of the tell tale signs of going under before your predecessor resigned... I don't mean to take the wind out of your sails, you did the right thing, but I suspect that the company was already circling the drain.

Anytime an employer starts reeling back promised compensation there's​ almost certainly major problems further up the chain. They either made promises they had no intention of keeping or they're going broke. (Usually the latter)

Paychecks being late or bouncing is a pretty huge red flag. Promising bonuses and benefits that never pay out is a huge red flag.

I guess what I'm trying to say is that the company was already well on it's way down, you just happened to be lucky enough to notice and raise the alarm before it sank.

They're likely trying to shift the blame away from poor management, and overextended budgets towards you and your predecessor. But let's be honest, if the company was sustainable it could have, and would have, survived by just hiring a couple new senior engineers. You made the right decision when you resigned, and you're​ not responsible for the company's failure.

With that out of the way...

Likely the best thing you could do for your junior co-workers is to offer to write letters of recommendation and encourage them in their future endeavors.

They've all gained at least one valuable piece of experience through this unfortunate event, they are now probably a little more aware of the red flags​ thrown out by a failing company and that's more valuable than you might think.

21

First, I can't stress enough how much you shouldn't pay the employees out of your own pocket for work they aren't doing for you. They're adults and need to learn that the world is an unfair place and that not everyone offering a paycheck can be trusted. You should definitely be there to mentor and support, but keep your pocketbook closed.

Second, you can initiate the conversation by having a one-on-one career planning meeting with them. "Where do you see yourself in five years? What steps do you need to take to get there?" If the plan they make is company agnostic, it will help them hit the ground running if things go south.

And lastly, are they good engineers? Do you have a business idea that could leverage their talents? If the company folds and they're on the market, you could do worse than having a team that you know works well together. If you have the ability to pay for them and can make it profitable, it would work well for them and for you. You obviously have the ownership mindset, so why not take it to the next level? Just don't start talking to them about it until after you leave, or obviously that's grounds for enticement charges.

  • 8
    This seems great until the latter half of the third paragraph. Enticement after leaving a company can usually land you in hot water. Most companies have employment agreements that stipulate a "no enticement of employees or customers" for at least a year after the person quits. – Cloud Jun 18 '17 at 22:35
  • 6
    Also worth pointing out is that paying employees out of your own pocket has tax ramifications for you and them. – Blrfl Jun 18 '17 at 23:44
  • 2
    @DevNull - "if the company folds and they're on the market" wouldn't be enticement... of course, hiring them straight from the other company before it folds could be problematic. – HorusKol Jun 18 '17 at 23:56
  • 2
    Also worth noting, why worry about other employees? I mean it is noble, but financially stupid. They should have gotten the hint or seen the writing on the wall (espec. w/ the clues given). Also, not sure what the country is and laws are, so it is difficult to say about taxes and labor laws how payment out-of-pocket / severance packages would work. – G.T.D. Jun 18 '17 at 23:57
  • 3
    @DevNull OP made it clear he didn't actually sign any enforceable contract... they were "draft" agreements. – corsiKa Jun 19 '17 at 2:26
6

Some thoughts:

  • From your description, the company would continue to function for the three months from the day you hand in your resignation to the day you actually leave. If you communicate your resignation to your fellow workers they will have 3 months to find a new job. This is doable but can be tight. If you can give them a heads up even earlier (Your employer seems to know you want to leave, so I don't see why your coworkers can't know that "you're contemplating the decision" cough cough)
  • The company would also have 3 months to find a replacement for you and keep production running.
  • Also it seems likely that the company will try to keep you on with similar last ditch offers. That could be your chance to obtain non-draft versions of your agreements.
  • Given their legal loss towards your predecessor you might have a decent case against them for trying to scam you out of the benefits offered in those draft agreements. (IANAL)
  • You can talk with your coworkers about the issues you and your predecessor faced when it became time for the employer to fulfill his obligations. This has nothing to do with you maybe leaving and could be a clue for them to get their paperwork in order.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.