A recent lawsuit filed by a former CEO against his erstwhile employer shows some of the potential pitfalls in terminating an executive.

In this case, James Whitney, former the CEO of Tallgrass Beef Company, has sued Tallgrass, alleging that it failed to pay him wages owed to him under the Illinois Wage Payment and Collections Act (IWPCA). Whitney has alleged in his complaint that after he left the company in 2011, having been employed as the CEO and CFO of Tallgrass for a period of two years, Tallgrass failed to pay him the last of his wages, failed to pay him for unused vacation time and failed to reimburse him for expenses that he had incurred during his tenure as CEO and CFO.

Whitney also named Bill Kurtis, the owner of Tallgrass Beef Company, in the suit, claiming that he is personally liable for the unpaid wages.  This claim, which would seem to be an attempt to perform an end-run around the corporate form, alleges that, under the IWCPA, any officer of a corporation, or agent of an employer who “knowingly permits” the violation of the IWCPA is considered an employer of the employee for purposes of liability. Whether this chain of reasoning will hold up in court is difficult to say, but the fact that Whitney would need to show that Kurtis had “knowingly” permitted the wage to remain unpaid is a fairly heavy burden, and, depending on what new information comes to light through the discovery process, may prove to be an unsustainable charge when all is said and done.

Finally, the Bloom Agency, a marketing firm, is also a co-plaintiff in this action, claiming breach of contract with their firm through non-payment, which would not be first such claim against Tallgrass, which recently settled with a number of its suppliers who had similarly accused the company of non-payment.

While the  complaint has only recently been filed, it will be interesting to see how this case progresses and whether Whitey will be able to make a case against Tallgrass and its owner. The Patterson Law Firm handles a wide variety of business lawsuits, and is particularly experienced in business contracts, including breach of contract.

To learn more about our firm visit pattersonlawfirm.com or call (312) 223-1699.