So I am a freelancer working in the digital marketing industry (web design, seo, sem etc.). When starting up on my own, I got a major project from the digital marketing manager (lets call him Sam here-on) at my last job who had since moved to a bay area (silicon valley SF) based startup. This new company needed around $20K (AUD) worth of consulting work done and I offered to assist. All the discussions and negotiations happened over skype and gtalk since these guys were based in San Francisco. Sam was my only contact as he was VP-Marketing and this was his area- plus he controlled the marketing budget. Because of my previous rapport with him and the fact that they wanted to move quickly, I confirmed all the work to be completed, payment etc. in much detail over email and agreed to commence. Any time there was confusion over the scope of work, hours or payment, I would put it in an email and get a confirmation from Sam.
Fast forward to the time when I just had to deliver the final bits of the project, I get an abrupt email from Sam saying that he has resigned with immediate effect and to send over the invoice for work completed-till-date to the accounts payable team, introducing them over the same email. I was obviously shocked but sent over the invoice for the 70% of work completed along with 10% of work in pipeline for which resources had already been allocated (basically I'd already committed to my sub-contractor) in advance. I put a pause on the final 20% of the work, even though its quite common to bill the clients for committed work in my line of business (plus I didn't have a formal contract). I then delivered the remaining 10% of the work in the following days towards which the handover staff was very receptive.
This was 3 months ago. I have since been chasing up the invoice, which was initially passed over the VP-Finance, who claimed they needed approval from CEO. This CEO, after dodging my emails for a bit, finally replied saying he needed proof of commitment, to which, I sent him all the confirmation emails from Sam agreeing specifically to all the work delivered. He obviously didn't have a reply to that and have since been ignoring all my emails and phone calls. Sam has moved on to start his own business and can't really assist except for providing a written confirmation agreeing to all the work.
I've had to since pay my sub-contractors out of my own pocket since I didn't want to rip them off. I have been in the industry for over 8 years but being new to operating my own shop, am struggling financially to break even as $20K is a massive amount. Struggling with options now as this start-up is well-funded, based in the bay area and may have deep pockets to defend legal action. Saying that, I feel that I have a strong case as like Australia, I think Californian law treats emails as a contract too. The other (cheaper) option is small claims court in California but I can only claim $10,000 US under that, so I'd still have to let go of around 30% of my invoiced amount. Even there, I may have to physically appear in the court in SF. Third option is a social media name & shame. Since they're a recently VC funded company and are trying to establish base, this could force them to budge. Problem with this option is that it could put a question on my credibility as a professional.
I have since started advanced invoicing for future clients along with detailed signed contracts to avoid confusions but curious if anyone has any ideas on how to recover this payment as its really hurting me financially.
Many thanks!
Name and shame.
Failing that, bikies.