Employers Liable for Unpaid Wages in Colorado

by Law Week Contributor

BY: Susan Schaecher

The Colorado Court of Appeals in Paradine v. Goei held that the Colorado Wage Claim Act does not categorically bar individual liability for unpaid wages, rejecting arguments that a 2003 Colorado Supreme Court decision precluded any and all such claims. In other words, managers may now be personally on the hook for unpaid wage claims brought by current or former employees. The decision highlights the need for employers to create best practices to ensure the state’s wage and hour laws are followed and should spur managers to take a specific interest in confirming compliance at their workplaces.

Robert Paradine worked as the chief financial officer and vice president of administration for Aspect Technologies, Inc. Upon his departure from the company, he filed a lawsuit that included a claim under Colorado’s Wage Claim Act, alleging that Aspect owed him approximately $8,100 in unpaid wages. The lawsuit also included claims for fraud and breach of contract, which turned out to be a pivotal legal maneuver. But the lawsuit didn’t just name Aspect as a defendant; it also named Esmond Goei, the company’s chief executive officer.

The CEO filed a motion to dismiss the claims against him personally, and the trial court granted that motion. It relied upon language found in the 2003 Colorado Supreme Court decision in Leonard v. McMorris, which seemed to suggest that there was a complete bar preventing an individual from being held liable for such claims. Paradine appealed the decision, and the Colorado Court of Appeals reversed the dismissal and resurrected his claims in an April 19 ruling.

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