Salary deferrals have bad consequences
We recently sent out a client alert on a recent court decision in a case involving salary deferral. The gist of the case was that two founders of a new company agreed to a salary deferral until the company could afford to pay them. This agreement was, apparently, set forth in a written agreement. The two founders came to a parting of the ways, and one of them, the CEO, later sued both the company and the cofounder for back pay under the Massachusetts Payment of Wages Statute. This may sound bizarre, but even though there was a written agreement...
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