Aftermath of a Complex Partnership – part I | Beit Din Eretz Hemda - Gazit | Beit Midrash

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P'ninat Mishpat

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Case: The sides worked together in marketing other companies’ technological products. The defendant (=def1) is the owner of a company (=def2). The plaintiff (=pl1) worked for def2, but took on an increasingly central role, with agreements in 2010 and 2014. In the 2010 agreement, pl1 was appointed vice-chairman of def2 (and was envisioned to run it) and received stock options in it. The 2014 agreement states that because def2’s situation makes it difficult to pay pl1, pl1 should open a company (=pl2) to represent some of def2’s clients. Pl1 worked for def2 throughout 2015. During 2016, the sides have been in the process of separating between themselves, including settling old accounts. [We will deal with different claims each time.] Pl1 demands the 7,000 NIS monthly salary set out in the 2014 agreement for his work in the last six months of 2015 and possibly for the beginning of 2016. Def reply that pl1 did very little work that year and was not successful at what he did but focused primarily on pl2. The value of pl1’s work was covered by his use of a company car def2 provided.

Ruling: In the letter of claim and first hearing, pl1 asked for 6 months of salary for 2015 (=42,000 NIS). However, in summations he added on the first three months of 2016, claiming that he did not mention those months previously because he had limited his total claim to 120,000 NIS and was referring only to the amount due for 2015. One is not able to alter the scope of his claims in the midst of a proceeding unless he has a convincing explanation (amatla) as to why he changed his claim (Shulchan Aruch, Choshen Mishpat 80:1). Pl1 did not explain why he would have limited his claim to 120,000 NIS if he thought he deserved more or why he would have not bothered to mention the months of 2016. Therefore, the additional claim will not be considered.

Def1 claimed that pl1 should prove that he did sufficient work during 2015 to justify a full salary. While pl1 did provide some documentation of work, it is unclear that it was proof of a great enough amount. However, that is not the issue here. According to the agreement, pl1 was to be paid as a worker for a time period, not as a contractor who gets paid by results. Since no time expectations were stated for pl1 (there was no claim that pl1 was supposed to punch a clock), it is not feasible for him to prove that he did as much as he had to. It was clear that part of pl1’s day was going to be spent working on pl2, to which def2 channeled clients, and the same agreement that mandated it also spoke of pl1’s salary. Def1 was unable to explain to beit din exactly what was expected of pl1.

In cases like this, when one side can know the facts and the other cannot, the one who knows is believed with an oath (Shulchan Aruch, CM 91:3). According to the common practice (and apparently the law), we do not reduce anything from the worker’s salary in such a case, which is what we will rule. Therefore, pl1 is to receive 42,000 NIS on this claim.