Employee resigned 15 minutes after we purchased company

[Mitchel]

Jurisdiction

Colorado

I'll try to keep this short.

• Employee worked for old company for 24 years.
• We (previous employees of the old company) purchased the company on April 1, 2016.
• 15 minutes after signing the purchase contracts the employee submitted his 2 week notice / resigned.
• The employee was the sales manager and collected a small salary + commissions from his sales, that position in the new company is a non-salaried, 100% commission position and was taken by one of the owners.
• Employee already had a new job when he resigned.
• Employee was recently laid off from his new job and filed for unemployment.

I was contacted by the unemployment office and was asked a bunch of questions and was told I may be on the hook for the unemployment claim even though he resigned. I was told he claimed he left because his salary was reduced, I countered that it was not reduced...he's a new employee. He just started working for "US" and knew beforehand he was no longer getting a salary.

Nothing has been decided yet, but seeing that we only have 20 days to appeal the case, I want to make sure we have all of our ducks in a row.

• How in the world can we be included in his claim if he worked for the past 1.5 years at some other company?
• Any advice on how to fight this if they side for him?

 

[army judge]

When one entity purchases another, the purchasing entity assumes the debts and assets of the entity it acquired.

Ultimately the state decides.

I wouldn't resist his claim, if it were my choice to make.

He's probably 40 years old or older.
If he is, he's a member of a protected class, which allows him to allege age discrimination.

That could end up being far more costly and troubling than a garden variety unemployment insurance claim.


Age discrimination involves treating an applicant or employee less favorably because of his or her age.

The Age Discrimination in Employment Act (ADEA) forbids age discrimination against people who are age 40 or older. It does not protect workers under the age of 40, although some states have laws that protect younger workers from age discrimination. It is not illegal for an employer or other covered entity to favor an older worker over a younger one, even if both workers are age 40 or older.

Discrimination can occur when the victim and the person who inflicted the discrimination are both over 40.

 

[hrforme]

You don't....I have to agree that I don't see you winning -- you can throw out all the sale/purchase details because in the end if the new company kept the old employees, then they all took over the unemployment liability for prior employees in the look back period. And April 2016 is still in the look-back wage period. UI will look into all employment during that period.

Secondly, the new employer greatly changed his compensation package and he immediately quit as soon as it went into effect " small salary + commissions from his sales, that position in the new company is a non-salaried, 100% commission position". Generally a pay change quit can be good cause from the employee's side in most states -- Your state is not mine, but mine which is employER friendly would give benefits for this.....

https://www.colorado.gov/pacific/sites/default/files/YourGuidetoUnemploymentBenefits.pdf search the PDF for the word "quit" -- and "lost your job through no fault of your own...reduction in pay not related to performance". It doesn't matter that at the time that he had another job lined up.

 

[Mitchel]

Thank you for the information...I guess we will just accept this as "part of doing business" and not stress over it and move on to bigger and better things.

 

[zddoodah]

We (previous employees of the old company) purchased the company on April 1, 2016.

Please explain exactly what this means. Did you (the previous employees) purchase shares of stock in a corporation? If not, what exactly did you purchase?

I countered that it was not reduced...he's a new employee. He just started working for "US" and knew beforehand he was no longer getting a salary.

Whether this is a legitimate position to take depends on how you answer my questions above.

No point in addressing your questions until you provide this information.