The Oldest Trick In The Corporate Playbook

Ronald Schmidt worked for Hands On CDL Driving School, LLC, a commercial driver’s license training company owned entirely by Paul Gilbertson. Schmidt sued under the Fair Labor Standards Act, the federal law that protects workers’ right to be paid properly. He won.

A jury sided with Schmidt in June 2022. A federal court awarded him damages. The company responded by going silent. Gilbertson stopped communicating with his own attorneys. He ignored post-trial motions. He ignored court deadlines, not once, but repeatedly. He offered no opposition when his own lawyers asked to abandon the case.

The court allowed the withdrawal, treated Schmidt’s arguments as unopposed, and increased the judgment accordingly. Then, on February 22, 2023, a final judgment of $355,072.50 (enough to pay a median American worker’s full salary for nearly 9 years) was entered. Gilbertson’s response: dissolve the company.

The Breakdown Of The Judgment Schmidt Won

The $197,572.50 (enough to buy four brand-new mid-range cars outright) in attorney fees ballooned to that size specifically because Gilbertson abandoned his own defense. Every deadline he skipped, every motion he ignored, compounded the bill. His silence was not negligence. It was a strategy.

A New Name, The Same Operation

After dissolving Hands On CDL, Gilbertson launched Hands-On Driving, Inc. The name is cosmetically different. The business, the industry, the owner: identical. Schmidt had collected zero dollars from the original judgment when he returned to court to demand accountability.

The court granted Schmidt’s motion to add both Gilbertson personally and the new company as defendants. The legal doctrine at stake is called successor liability. It exists precisely because workers cannot stop their bosses from selling off or dissolving a company to escape a debt owed to them.

The Seventh Circuit Court of Appeals, whose precedents govern this case, has stated that successor liability is the default rule when enforcing federal labor and employment laws. The court will hold an evidentiary hearing on February 11, 2025 to determine whether Gilbertson and his new company must finally pay.

The Non-Financial Ledger

What No Settlement Figure Can Repay

Ronald Schmidt won a federal jury verdict. He did everything right. He filed his lawsuit. He showed up to trial. He survived a legal process that most working people cannot afford to navigate. The jury heard the evidence and ruled in his favor. A federal judge twice confirmed the ruling and increased the damages when the company refused to even show up to defend itself. Schmidt held a piece of paper signed by a federal court saying he was owed $355,072.50 (more than most Americans accumulate in a decade of full-time work). That piece of paper bought him nothing.

The period between winning a judgment and being able to collect it is a legal limbo that the system rarely discusses. Schmidt spent months, and then longer, watching the law he had just proven existed on his behalf become functionally worthless. He had paid attorneys. He had invested years of his life in litigation. He had proven his case to a jury of his peers. And the man who owed him the money simply looked at all of that, dissolved the company, opened a new one under a nearly identical name, and kept working.

The emotional distress damages awarded by the court, $7,500 (roughly six weeks of groceries for a family of four), represent the court’s formal acknowledgment that Schmidt suffered psychologically from what Hands On CDL did to him. That suffering did not end when the jury ruled. It continued through every ignored deadline, every court-extended opportunity for the company to respond that Gilbertson waved away, and through the humiliation of watching a judgment become a ghost document chasing a company that no longer legally existed.

There is a particular kind of contempt embedded in Gilbertson’s conduct. The court documents record that he stopped communicating with his own defense attorneys during active litigation. He did not even bother to oppose his own lawyers asking the court to abandon him. This is not a portrait of a businessman who ran out of money or misunderstood his legal obligations. This is a portrait of someone who calculated that the system would not reach him, and proceeded accordingly. Schmidt’s case is still unresolved. The hearing is scheduled. The worker is still waiting.

Legal Receipts

Straight From The Court Documents

“Shortly after judgment was entered, however, that company was dissolved, leaving plaintiff without obvious recourse.”

— Federal Court Opinion and Order, January 22, 2025

“Defendant had allegedly stopped communicating with its attorney, failed to provide any response to plaintiff’s post-trial motions, and offered no opposition to its counsel’s subsequent motion to withdraw despite the court resetting multiple deadlines for defendant to do so.”

— Federal Court Opinion and Order, January 22, 2025

“That is exactly what plaintiff alleges occurred in this case: Hands On CDL was dissolved as a limited liability corporation and replaced by Hands-On Driving, Inc. in order to avoid paying the monetary judgment owed to plaintiff.”

— Federal Court Opinion and Order, January 22, 2025

“The imposition of successor liability will often be necessary to achieve the statutory goals because the workers will often be unable to head off a corporate sale by their employer aimed at extinguishing the employer’s liability to them.”

— Seventh Circuit Court of Appeals, Teed v. Thomas & Betts Power Solutions, LLC (711 F.3d 763, 766), cited in court order

“Successor liability is appropriate in suits to enforce federal labor or employment laws — even when the successor disclaimed liability when it acquired the assets in question — unless there are good reasons to withhold such liability.”

— Seventh Circuit Court of Appeals, Teed v. Thomas & Betts Power Solutions, LLC (711 F.3d 766), cited in court order

Societal Impact Mapping

This Is Not An Isolated Story

Economic Inequality: The Loophole That Only Works If You Own The Company

Ronald Schmidt is an individual worker. Paul Gilbertson is the sole owner of a corporate entity. That structural difference is the entire story. Schmidt could not dissolve himself to escape his obligations. He could not stop communicating with his attorney and watch his responsibilities disappear. He could not create a new “Ronald Schmidt, Inc.” and continue his life unbothered while a judgment chased a version of him that no longer existed on paper.

The LLC structure, intended to encourage entrepreneurship, functions in cases like this as a liability shield that workers cannot access. When an employer violates federal labor law and then dissolves the entity that was found liable, the worker bears all of the risk. Schmidt bore the risk of being underpaid or otherwise harmed in the first place. He bore the risk and cost of litigation. He bore the risk of an employer who simply stopped showing up. And then he bore the risk of collecting a judgment from a shell.

The Seventh Circuit’s doctrine of successor liability exists to counteract this exact power imbalance. The court in this case cited the circuit’s clear statement that workers cannot realistically “head off a corporate sale by their employer aimed at extinguishing the employer’s liability to them.” What this case illustrates is that the legal tools exist, but they require a worker with the resources, the endurance, and the legal representation to chase a dissolved company into court a second time just to force an evidentiary hearing. Most workers cannot do that. Schmidt nearly could not.

The attorney fees in this case totaled $197,572.50 (enough to fully pay the annual salary of three entry-level teachers). That figure exists because Gilbertson made Schmidt’s attorneys work for every inch of justice without any opposition from the defense. The system ran up costs on one side while the other side simply refused to participate. That asymmetry is not an accident. It is a feature of how corporate law interacts with labor enforcement in practice.

The Cost Of A Life Metric

What Now?

Named Parties Still Operating

• Paul Gilbertson — Sole owner of the dissolved Hands On CDL Driving School, LLC; sole operator of the active Hands-On Driving, Inc. Named personally as a defendant. Evidentiary hearing scheduled February 11, 2025.
• Hands-On Driving, Inc. — Gilbertson’s new company. Named as a successor entity defendant. The court will determine whether it inherits the $355,072.50 judgment.

Regulatory Bodies With Jurisdiction Over These Violations

• U.S. Department of Labor — Wage and Hour Division (WHD): Enforces the Fair Labor Standards Act. Workers who believe their employer is violating wage laws can file a complaint at dol.gov.
• National Labor Relations Board (NLRB): Tracks patterns of employer retaliation and labor law evasion. File reports at nlrb.gov.
• Wisconsin Department of Workforce Development: State-level labor enforcement that operates alongside federal law in Wisconsin cases.

What You Can Do That Actually Works

Cases like Schmidt’s drag on for years because one worker is fighting alone. Joining or forming a union at your workplace creates a collective structure that makes this kind of individual wage theft far harder to execute. Connecting with local workers’ rights organizations, mutual aid networks, and labor legal aid clinics means that when employers try this trick on someone in your community, that person does not have to navigate a federal court system by themselves. The legal tools to stop wage theft and corporate shell-gaming exist. The question is always whether the worker has the resources to use them. Collective power closes that gap.