There may be times when the buck does not stop at the legal entity, if employee wages, employment taxes and labor penalties are involved. In Reynolds v. Bement (2005), the California Supreme Court found corporate agents including directors and officers acting within the scope of their agency were not personally liable for the companys failure to pay employees’ wages solely by virtue of their status as a corporate agent. But the court was careful to explain that its ruling was limited to the specific context of a lawsuit in state court, by a worker against the employer, for unpaid wages as deemed owed under the Labor Code, likely following a labor commission hearing, i.e, an action in state court under Labor Code Section 218 for breach of contract and/or for wages prescribed by the Labor Code. An officer or director might still be exposed to personal liability for the unpaid wages under a fraud theory, i.e., a claim that the officer or directly fraudulently induced the employee to remain in the company’s employ by promising that the wages would be paid when the officer or director knew that the company was failing and did not have the resources to make payroll. Also, the officer or director may be subject to civil penalties equivalent to unpaid wages under the Private Attorneys General Act.