Can I be held legally responsible for a brokers fee that I paid on behalf of my company?
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Can I be held legally responsible for a brokers fee that I paid on behalf of my company?
I was a GM with a company and within my realm of responsibility would regularly put together deals with brokers in order to obtain contracts or one-time projects. I did so with one job recently with the intent that the broker could lead to new work, even though the brokers contribution to the current work was limited. I was fired (no reason was given) just verbal discussion about the transaction with the broker. Will the company be able to hold me legally responsible for the brokers fee that I gave?
Asked on November 22, 2010 under Employment Labor Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Whether you can be held personally responsible for the broker's fee depends upon whether:
1) Contracting for a broker's fee was within the normal scope of your business--which seems to be the case--which would normally preclude liability (acting outside of authority or against authority can lead to liability); then, though, need to look at:
2) Was agreeing to pay the fee negligent in some fashion--that is, unreasonably careless, in that you didn't make sure you were getting value or dealing with a reputable broker or making sure you were paying a fee commensurate with what the company was getting for the fee
3) Was there evidence of some sort of improper collusion--e.g. paying an undeserved fee to get something back personally from the broker
If the company was not getting value back for this transaction and it was not normally the procedure to give a broker a lucrative commission for little work in expection of future work or business, then if it can be shown that you were negligent or intentionally acting improperly, they might have grounds to hold you personally liable for the fee. If on the other hand, what you did was in keeping with normal procedures and past practice (and you can show that), they probably won't be able to successfully hold you responsible for the fee.
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