Legal Question in Employment Law in California

Can I sue a former employee for damages due to negligence?

I am the owner of a small business. 1-1/2 years ago I contracted with a person claiming to have accounting skills to help me keep my books. We recently had an audit and the auditor said nothing in my books made any sense. Furthermore, I was behind 1 year in paying my federal employee taxes. It cost us over $20k to have a new accountant redo all the transactions. We immediately cut ties with our contractor. Unfortunately he had $6k in outstanding invoices. I told him due to cash limitations, I will pay his invoices after I pay the repair bills and the 1 year of fed employee taxes (with interest and penalties). Also, we have documented instances of this person not providing me with tax notices, failing to file EDD reports, not reconciling the books and falsifying statements that he presented to me. Further, this person would book invoices that I did not approve. He recently filed a grievance with the labor board claiming he was an employee and that we owe him back wages. If he is found to be an employee and the board forces us to pay him, can I sue him in small claims for damages as well as for penalties and interest on the back taxes? Do I have any rights or recourse if he is found to be an employee?


Asked on 4/18/07, 8:40 pm

2 Answers from Attorneys
Terry A. Nelson Nelson & Lawless

Re: Can I sue a former employee for damages due to negligence?

You may have breach of agreement claims against an 'independent contractor'. If he is actually not an employee, then bring a claim and suit. If he is really an employee, you can't collect losses from him unless from his theft or gross misconduct. Feel free to contact me if you decide to get legal help.

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Answered on 4/18/07, 9:02 pm
Thomas Pavone Pavone & Cohen

Re: Can I sue a former employee for damages due to negligence?

Small claims Court may not be appropriate in light of $20K in damages. An experienced labor attorney should review the relationship with the claimant and determine whether you have a basis to argue his "independent" status. Feel free to contact me for further analysis. Our firm has substantial experience in such matters

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Answered on 4/19/07, 3:19 am


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