My question involves employment and labor law for the state of: NY

This is a very long story, so I apologize in advance.

My two friends worked for a small IT company since Summer 2007 and until August 30, 2009. When they were hired, the agreement was that they would get paid $10/hr in cash weekly and once a month with check. No papers were signed or applications filled out.

The business was not doing well and the employer almost always did not pay all of what she owed, but for the first few months she kept a record of what she owes to whom and promised to pay it out when the business picks up. A few months in, everyone kind of stopped keeping records and the guys were getting paid whenever there was money in the cash register, which came from walk-in customers.

Starting in January 2009, the sales fell even more and there was barely any money coming in for the workers. The company relied on one big contract it had that took care of rent, utilities and the employer's personal rent and bills. There were also two small contracts, and that money was used mostly on inventory and if there was anything left over, it was paid to the workers.

Mid Spring 2009, the two workers sat down with the owner and said that they cannot do this any longer, and they will be leaving by the end of the summer to start their own business. The employer said that she understands and that she is looking to sell the business anyway. They agreed that when the business is sold, the employer will come with the workers and perform a task of a secretary, as she herself proposed.

Last week Tuesday the 28th, the workers found out that the one big contract they had was about to expire and that they don't want to extend it. They spoke to the owner of that company, let's call him Jack, and he said that he wants these two workers to keep servicing him, but not under the company they're at right now. The guys then explained that they are looking to open their own company anyway and that the current one is on the market to be sold. Note that Jack himself offered a new contract to the workers.

On Thursday the 30th, the workers told the employer that Jack told them he wasn't going to extend the contract with her company (meaning there will be no money for rent of the office and her apartment). They said they will help her sell the business and finish up whatever work was left, but they are moving on with their plan to start a new company. Her reaction was to yell, call everyone a backstabber and fire them on the spot. The next three days she refused to let anyone inside the office and the police had to be called in for her to give them their personal belongings back, including very sensitive personal data. In these same 3 days, the workers still serviced Jack's company as per contract (which was set to expire on Sept 1) because work had to be done and the employer doesn't know anything about computers.

Today, when the guys were at Jack's office, going over a proposal they drew out as Jack asked, the employer's friend, who was the original owner of that IT company and who was also Jack's friend, called and told Jack not to listen to "those backstabbers," because "they are liars, amateurs and cannot perform a job right." (Jack has been serviced by these workers for two years, so he knows what they can or cannot do) The guys heard all of this from the speakerphone and they reminded the former owner that everything they had done for the past 2 years for Jack had been done for free basically, because they were barely paid. He said that the employer told him she paid everything and doesn't owe them a thing. I personally spoke to her on the 30th of August (because I was the only person she was gonna speak to) and when she was complaining to me, I told her that she wasn't paying them and her exact quote was "That's not true, I paid them up until New Years [2009]," which was 9 months ago, and before she was still not paying as per agreement. So she is basically lying to everyone an it feels like the original owner doesn't know the truth either, but still calls Jack and repeats what the employers tells him. (She also said that another company they had on a contract was convinced by the workers to write out checks under their names, and not for her company, which is completely untrue; I personally called that company and asked to whom the checks were made out to. When they learned about the situation and that since the guys don't work there anymore, they won't be getting service, they said they will start paying the guys directly and try to get out of the contract. That was on Sept 1st, not months prior, as the employer claims).

To count up what she owes, it come out as roughly $20K each. The guys weren't going to pursue it because they know she doesn't have any money and she didn't take 2 offers she had on her business, but now they are livid and want to take her to count. The problem is that no one kept, or enforced for that matter, time logs, but it is common knowledge to every neighbor to the office, that the workers usually came around 12 p.m. and stayed past 10 p.m., 6 days a week. The only written documents pertaining to time they have is time sheets for the companies they serviced, which are locked in the employer's office.

If they go through with the lawsuit, on whom would the burden of proof fall in terms of proving whether or not she owes them money? Whenever they did get paid, it was in cash 90% of the time. Is it even worth fighting for? Any help or comment regarding this matter would be highly appreciated!