Q. I worked for about two years for a Virginia start-up Internet company that eventually let go the founders and all but one of its salaried employees at the beginning of 2003. I was due about $8,000 in salary and have not gotten any of it. I left with the understanding that when the company could afford to pay my salary (and the salaries of the other dismissed employees) I would receive it; if the company failed altogether I would receive nothing. But I just received a settlement offer asking if I would accept 15 percent of the outstanding amount, $1,200, and renounce the remainder. It seems they have a small contract that has kept them afloat, but to move forward they need to get this debt off their books. I sure could use the money, but 15 percent seems unreasonable. How do I find out whether the company might be financially able to pay more? Do I have any recourse?

A. Diane A. Seltzer, a Washington lawyer who at various times has represented both employers and workers, said that in the unlikely event the company is publicly traded, there would be plenty of information on it filed with the Securities and Exchange Commission. More likely it is a private company, she said, and it would be up to the owners whether they wanted to divulge the state of their firm's finances.
"I would ask to see the books," she said. "If they refuse, it looks like they're hiding something."
"I'd ask them to convince me why I should take 15 cents on the dollar," Seltzer said. "If they refuse to show the books, it becomes a judgment call whether you sue to try to collect more. There is a breach of contract here. But do you feel confident they would have assets to pay a judgment now or in several years? Are they covered by insurance?"
She said this worker and the others ought to find out as much about the company's financial state as they can before deciding what to do, but then they should remember that "moral victories are nice, but money is nicer." With that in mind, taking the smaller amount could be the right decision.

© Copyright The Washington Post Company, August 15, 2004