Compensation for Transfer of Business to One Partner – part VI | Beit Din Eretz Hemda - Gazit | Beit Midrash

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Case: The plaintiff (=pl) and the defendant (=def) opened a center that provides therapy for children. According to their agreement, def, who has a similar center elsewhere, was responsible for the finances and infrastructure. Pl was to serve as a therapist, be in charge of day-to-day operations, interact with parents and workers, and plan events. The business and grounds’ rental were in def’s name. Pl and def were supposed to get small salaries and then split profits equally after reaching "the point of balance," but pl never received profits. After three years, acrimony brought them to separate, and beit din oversaw the transfer of the business to pl, with compensation due to def. [After dealing with the rights of each in the partnership and the center’s value, we moved on to payments to address alleged imbalances from the past, this time over reduced salary.] Pl complains that she received 6,000 NIS per month, cost to employer, which was less than minimum wage, when the agreement stated she should receive 8,000 NIS gross pay (more than cost to employer). Def said that since pl worked less than she should have, she deserved less than that, and that he never received more than 75% of what he was listed to receive. He demands to receive for the long time that he received no pay.

Ruling: Beit din rejects def’s claim that pl deserves less than she was promised because of insufficient work, largely due to his own contradictions. This claim was a relatively late one; previously, def had said that if not for pl’s husband, pl and def would have continued working harmoniously. He also attributed the equal reduction in the two’s salary to insufficient finances.

P'ninat Mishpat (824)

Beit Din Eretz Hemda - Gazit

739 - Compensation for Transfer of Business to One Partner – part IV

740 - Compensation for Transfer of Business to One Partner – part VI

741 - Compensation for Transfer of Business to One Partner – part VII

Regarding the original period of the center, beit din will not award pl back pay because a clause in the agreement referred to the possibility of lower initial income when the business was small. Additionally, she did not complain in the early stage, and although she attributes that to misinformation from def, she did not substantiate those claims. Therefore, even if pl had deserved more, she was mochelet (relinquished rights to) more payment.

According to dayan 1, once pl started complaining about her salary and asked for a raise as the clientele grew, it is logical that she deserved full pay envisioned. Although pl did not work as a therapist as many hours as envisioned, her many responsibilities could have compensated and justified full pay. Therefore, based on compromise, pl should be compensated with 10,000 NIS. Dayan 2 posited that mechila applied the whole time, since she continued working, fully aware of her pay. Dayan 2 agreed to award her 10,000 NIS due to the possibility that she received under the minimum wage, which by law is a right one cannot waive.

All the dayanim agreed that def should not get back pay for the time he received no salary. If mechila can apply to lower salary, it can apply to no salary. As owner of the entire business (including the other branch) into which the income was flowing, if he wanted to make this additional income payable later, he should have stated so, and to the contrary, he made a point of telling pl that he was not getting paid

P'ninat Mishpat