Employee vs partnership

My husband has a verbal agreement with his now employee on being partners in his business. No paperwork has ever been filled out except both agreed verbally that if the other guy was to leave my husband business he would get 50% of profit made, kind of like a severence pay. We made him into an employee for tax purposes. Now for the last couple years his so-called partner has been acting alot like an employee. My husband puts 110% into the company and this guy only puts like 50%. When he feels like doing something he will do it..even if it causes the company to loose money. If that day ever comes were the other guy says " I want out now gimmie my money" Can we have a good dispute against him by saying "well you never even put 100% into the company and you acted like an employee and not a partner so why should we give you all this money, but here's 10%" Not to mention this guy only brought himself into my husband business..nothing else..so he likes to throw that his skills are worth enough. Any help would be appreciated.

If the business is worth anything, isn't it time that your husband formalized the relationship? He needs a definitive agreement and most important, some personal advice from a business lawyer on what to do and how to handle it. The best advice can come before there is a confrontation, and he's going to have to pay for it -- but I promise the lawyer will charge a lot less that a court would award if he proceeds without legal advice.