As a partner are my verbal agreements binding for the company?

Question

We are a startup magazine. I made a verbal agreement with a friend work for our publication for X amount for every issue. We never signed any agreements. She was the Fashion Dir. of the magazine. The other partners recognized this. She conducted photoshoots, contacted clothing vendors, found models for casting calls. She is even named in the masthead of a number of issues for the magazine. She was even offered partnership at one point for all her hard work and because we couldnt afford to pay her.

The partnership has gone sour and now the other partners are saying we don't owe her anything because there are no signed agreements. They say she was just "help" for the company. I don't agree with them and believe that we should pay her. I believe in doing whats morally and ethically right. If she were to sue the company I wouldn't lie about the agreement I made with her. By saying that she is telling the truth is that enough for the company to have to pay her what I agreed to?

Answer 1

You should pay her what is owed. Any employment, while "at will" is still employment and is frequently made on a verbal commitment. She needs to be reimbursed for any expenses, and paid any wages that were owed for work she has completed. Verbal or not, an agreement is an agreement.

However, she is not owed anything above what she has earned. She was offered a partnership and turned it down.

Let this be a lesson to you though. You can't trust your partners to back up your verbal agreements. Put everything in writing and make sure you protect yourself with a "cancellation" clause.

Answer 2

In every industry, it is common to make verbal promises and then break them. Regardless of your magazine's subscriber rate or status, I'd say she did very well by you, and given her highfalutin sounding titles, vice-versa. At the very least, I hope you give her a letter of recommendation, so that she can go to another magazine. Given the nature of the business, if only at your publication, maybe you should join her!