If what the designer saying is true, then Eligible breached contract. Verbal contracts are binding in CA. And he is within his rights to get paid for his work. It should not damage his reputation at all.

Oral contracts are binding everywhere in the US.

What's damaging to his reputation isn't pursuing the invoice based on an oral contract. What's damaging to his reputation is if he jumped the gun, whipping up drama about a receivable that he reasonably could have expected to get paid if he simply invoiced persistently.

I suspect this thread might be a bit of a litmus test for people who have done a lot of freelancing. From working with designers a bit, I can tell that this is a hot-button issue for them: a lot of clients do shirk payment, and so they tend to insist on upfront payment of some sort before they commence work. But having said that, I have to believe every freelancer is familiar with delayed payments on invoices. Your most lucrative clients might pay many months late, and then only after persistent reminders.

Just because it happens doesn't mean it's right. Yes companies drag out payment and make you jump through hoops to get paid (the you here is a hypothetical freelancer).

The reason they do this is to hold on to your money as long as possible with the outside hope that you'll just go away and they get away with theft.

It's bad enough with larger companies where the people you're working with may not actually be the people who are writing the checks, but at a small company like this it is unacceptable.

Assuming the story is true, the CEO agreed to pay then decided that she didn't want to pay anymore. To accomplish this she's doing her best to get the designer to give up and go away.

How is this acceptable behavior? Again I realize it's common, but it's flat out dishonorable.

I like how you assumed malice when bureaucracy is a much more plausible explanation.

I acknowledge that bureaucracy might be partly to blame in larger companies, but we are talking about a small company where the designer was dealing directly with the CEO.

Again: are you familiar with the concept of "payment terms"? Has anything been disclosed to suggest that this vendor hasn't had timely payment? Are we all clear on what "timely" means in the context of freelancing?

For once, I sort of agree with you. But I chalk it up to inexperience, not malice. It sounds like the OP was intimidated by the (probably meant to be tongue-in-cheek) referral to the "legal department, and genuinely doesn't know what to do.

And, it's one thing to have a client drag their heels on a bill, it's quite another for a client to say, "No, we won't pay that, talk to legal if you have a problem with that." The former is a good opportunity to persistently invoice, the later is a good opportunity to explore the small claims court system.

The problem here is that it is not actually clear they had a contract. The timeline, as reported in the original post, appears to be this:

1. They email each other for a while.

2. They talk on the phone, and agree that he will do the work for $65/hour, and can start right away.

3. He emails them a contract, and they mail back that they will run it by their lawyers.

4. They contact him to say they have hired someone else.

We are told that #4 occurs after 3 days of work, which puts it 3 days after #2.

The key question, I think, is when did #3 happen? If #3 happened very soon after #2, then depending on exactly what was said in the emails and on the phone, it might be interpreted that #2 was just the negotiation, and the contract he emailed was his offer of terms and the work would not actually start until they accepted it.

To put it another way, I can easily imagine plausible fact situations where he is clearly in the right and they owe him for his work, and I can easily imagine plausible fact situations where they had no deal and he jumped the gun by starting work and they owe him nothing--and all of these fact situations would be consistent with the information we've been given.

I I edited to say "public shaming" instead. You're right. His reputation I can't predict, but it might creep up somewhere on Google and potential hires may consider it a liability.

Don't scare away the future prospects by making yourself untouchable.

Why would someone want to be the "go-to-guy" for a client that's refusing to pay an invoice of $780? I can understand the referrals just because it's YC. But, in general, I doubt designers go around asking clients that refuse to pay for referrals.

Ah, yes, that's brilliant. I never thought of that one. Continue dealing with a company that will not pay as promised for your previous work.

Can you give an example where this course of action has ever worked out well for the designer?

Being a go-to-guy by a company that doesn't pay is the worst thing you can do.

It's hard to judge any case without seeing the full information. But based on the post, the company agreed to pay him to do design work, which he then did. If they change their mind a few days later, that's their issue - they are still legally bound to pay. I would never not pay a freelancer I hired, unless they literally didn't do the work.

Free press not always a good thing. For example: free press on the website of the Superior Court of the State of California :-)