Can a company refuse to pay an independent contractor for a ‘breach of contract’ even after the work was already completed?

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Can a company refuse to pay an independent contractor for a ‘breach of contract’ even after the work was already completed?

Driver for a company called NDS. I drove my own vehicle and delivered parts for NAPA. After several months of work, the company contacted me saying that I was never added to their insurance. Had I been in an accident in that time it would have been 100 on me. I left the company and as a result they told me that my contract was breached. They told me that any money that was owed to me would be forfeited. I used my own money to pay for gas and delivered the parts for 2 weeks. The company profited on my work and decided not to pay. Can they do that? Do I have a case in small claims?

Asked on March 7, 2016 under Employment Labor Law, Wisconsin

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Yes, you should have a case: your breach of contract would obviously entitle them to no longer employ you, and if your breach cost them money (e.g. caused them to themselves breach a contract to a customer), they can likely offset that against what they owe you; however, they do need to pay you for all work you actually completed, under both contractual and "unjust enrichment" theories. (Unjust enrichment: they cannot profit from your work without paying for it.) If you were to sue them, you would have a reasonably good chance of success, unless there is some provision in a written contract between you and them stating that in the event of a breach, you forfeit your pay (if there is such a written provision or term, it is it enforceable).


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