Legal Question in Business Law in California

Do I have any liability to a company I am an employee of? If the company is being sued or if the company does not pay its bills?

ie.: If I have company credit cards? The credit cards have my name as well as the company name on them. Or if I have signed agreements on behalf of the company? (No personal guarantees.)


Asked on 2/25/10, 9:38 am

5 Answers from Attorneys

Almost always the answer is "no." In fact there is a provision in the Labor Code that requires the company to indeminfy you from debts and liability incurred on its behalf. Notable exceptions are liability for employer taxes if you were the person at the company responsible for getting them paid, fraud that was not ratified by the company, and acts that give the company a right to sue you. If all you have is company credit cards on which you are an authorized user, and contracts signed entirely and clearly on behalf of the company, you should fall under the general rule.

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Answered on 3/02/10, 9:44 am
Daniel Bakondi The Law Office of Daniel Bakondi

The company is supposed to protect you but doesnt always. A person suing the company usually does not have the right to sue you personally, but might anyway. I am available to help. As far as credit cards, it depends on a number of factors.

Best,

Daniel Bakondi Esq.

The Law Office of Daniel Bakondi

870 Market Street, Suite 1161

San Francisco CA 94102

Daniel Bakondi, Esq. [email protected] 415-450-0424

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Answered on 3/02/10, 9:45 am

The question isn't whether you have any liability to the company (your employer), but rather to third parties who may not get paid by your employer.

Be careful with credit cards -- if you signed an agreement with the bank that you would pay the credit card, you are liable to the bank irrespective of whether your employer pays the bill. So, you should check on your company credit card and confirm with the bank that issued the credit card that you are not personally liable.

Whenever you sign an agreement on behalf of your employer, ALWAYS include your title as a clear indication that you are executing the document in your capacity as an agent of your employer. Without that indication, you could be found to have personally agreed to the contract and be obligated to pay for it. Be careful.

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Answered on 3/02/10, 10:21 am
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

I generally agree with all the previous answers, but if I were the only one answering, I'd put it this way: (A) If you mis-use an employer-provided credit card, for example, by using it for personal purchases, the employer can sue you or perhaps even turn it into a criminal matter (embezzlement). (B) If you use the card within the permission given you by the employer, and thus there is no employer complaint with you, but the employer fails to pay the card issuer, the issuer cannot bill you or sue you personally UNLESS you were somehow personally involved in applying for the card. This situation has arisen in very small incorporated businesses where an officer, not necessarily the CEO, has taken out a card in the company's name but signed his own name on the application, without reading the application carefully - and found out later, to his dismay, that he was personally liable on the card.

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Answered on 3/02/10, 11:08 am
Lance Davidson Lance S. Davidson, P.C.

John above is correct [except that inserting your title may be insufficient to protect you], and your liability personally to the bank becomes even more of an issue if your employer is/becomes bankrupt, which is probably be why you are asking. If your employer is bankrupt, its indemnity to you is compromised by the US Bankruptcy Code. Banks typically have [unsuspecting] employees sign a separate credit card agreement acknowledging personal liability apart from that of the employer's. We may see some federal legislation protecting the public against this, and the bank has to find you after exhausting its efforts with your employer [a practical, not a legal, approach] so you have time on your side. Good luck.

Contact my office via my website at www.CleverLegal.com if you have further questions.

IMPORTANT NOTICE: This communication may contain confidential information, privileged information, or attorney work product. If you are not the intended recipient or received this message in error, any use or distribution of this message is strictly prohibited and unlawful. Please notify the sender immediately, and delete this message. No attorney-client nor confidential relationship is created through this communication. Nothing communicated or provided constitutes legal advice nor a legal opinion unless it so specifies and written agreement for attorney services has been entered into.

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Answered on 3/02/10, 11:34 am


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