"At-will"?! I had no idea that in California you could just terminate employment for no reason. Coming from Australia where you can't fire anybody without good reason (even demoting people can be considered unfair dismissal) this just sounds insane.
Can you quit your job for no reason in Australia?
Yeah, of course. You might be required to give 2 weeks' notice or something and if you're contracted you might be liable for breach of contract but nobody's going to force you to work.
"Pincus is a very very VERY shady character" Any examples of this? Not that I don't believe you, but just curious
http://blogs.sfweekly.com/thesnitch/2010/09/zynga_pincus_cop... Tells his team to steal game ideas, makes millions in the process then shafts the people who made it happen for him. Would love to hear from someone who can paint him in a better light than the horrible individual I have in mind at the moment.
This isn't surprising, not everybody in the game is for building something or for changing the world or for passion.
Someone is here only for the money multiplication factor. Sales, advertising, marketing and your usual MBA subjects are all about that. That is, not to care about what you are selling, but to create an illusion which gives an opportunity to amplify that seed investment. That is the time to cash on and move on.
Yes, you and your sibling threads are all correct, but it's not extortion. It's immoral and will certainly hurt them in the future, but it's not extortion. I am simply trying to explain why this is a moral issue and not a legal issue. This is the equivalent of saying: 'your gonna have to take a pay cut or were gonna have to let you go'. It is morally repugnant and goes against everything we believe in the startup com…
Imagine your company gave you a $40,000 bonus. You get 4 checks for $10k each, dated 11-Nov-2012, 2013, 2014, and 2015. If the company is still in business on those dates you can cash the checks. If you leave or quit, you hand back the uncashed checks. Now the company says "give us back 2014 and 2015 or you're fired". What would you say?
Also more importantly they gave a $40,000 bonus as payable in the future because they wanted you to do $40,000 work now but didn't have money to pay you.
"At-will"?! I had no idea that in California you could just terminate employment for no reason. Coming from Australia where you can't fire anybody without good reason (even demoting people can be considered unfair dismissal) this just sounds insane.
"At-will" means that either both the employer and employee can break it off at any time. It's the maximum freedom for everyone involved. No company is compelled to hire anyone, why should they be compelled to continue employing someone indefinitely?
It's a compelling argument, but if there wasn't "at-will" firing, this sort of underhanded "give us our shares back or we'll fire you" stuff that Zynga is purportedly doing couldn't happen without nasty court cases.
If we're talking about what should be illegal, I find it hard to argue that it shouldn't be. If you hire someone on the promise that they'll get a bonus at 5 years, and purposely fire them at 4 years, 11 months solely to avoid paying them the bonus, that should be illegal. In any reasonable interpretation of the contract, that isn't good-faith upholding of the contract--- you promised them something at certain milest…
I disagree, what you describe is shady, but also pretty unrealistic. Normally there's a vesting schedule with only a 1 year cliff, and then chunks vest yearly. That's essentially pro-rata.
what you describe is shady
Not only is it shady it is a legal term and that term is called bad faith, if you can prove the party acted in bad faith, which if what is being reported about, return it or get fired, then that one is pretty locked up, then they are in violation of the spirit of contract. Faith is one of the foundations of contract law. If you are found to have not honored the faith portion of the contract then more times than not, you will be on the loosing end of a contract dispute.
Zynga is aiming squarely at their feet and firing a cannon. Would you invest in a company where management is obviously looking for a short term cashout at the expense of the future success of the company? The future success is precisely what the investor is buying . It's like buying a car while the seller is actively pulling parts out of it . The results of this will be reduced share values combined with lawsuits ea…
I was also wondering about this. A few people here commented that this is obviously a move by the execs to claw back as much stock as possible for themselves before the IPO in order to ditch it and run. On one level, this sounds realistic. But you have to wonder: Isn't taking this kind of action so close to the IPO just going to put their stock price into free-fall? Did they simply not expect this kind of headlines,…
No investors are myopically focused on short term trends, if anything this will be looked at as an opportunity to replace those positions with off-shore bodies that can further reduce price, drive up the short term and dump it. I can almost guarantee that this idea came from their IPO investment house that is handling the IPO, I will have to dig up who is handling it, but this one seems to be right out of the play book of how to drive up the short term gains. Long enough for the institutional investors to flip their holdings while the numbers are still going up, but before the product rot sets in.
The poster child here is Groupon (GRPN) and while the poor choices of their executives did negatively affect the IPO they are still (11/9) trading above their IPO price of $20 ($24.50 when I glanced).
I don't think that Groupon execs are widely perceived as crooks, whereas Zynga's ones are more than hard to defend here. Moreover, Zynga execs' move was likely intended to increase the total worth of their shares; if they manage to claw 20% more shares, but destroy 30% of each share's value, they've hurt themselves even in the short term (figures made up for illustration, obviously).
I don't think that Groupon execs are widely perceived as crooks, whereas Zynga's ones are more than hard to defend here.
Actually, Groupon's execs are widely perceived as crooks.
Regret has never been a good enough reason in the eyes of a judge to annul a contract. If Zynga agreed to the terms as described they haven't got a leg to stand on. The time to negotiate a contract is before it is signed, not retroactively. If they use the threat of termination then they will lose even more, not only will they not get their stock back, they will also have to pay excessive severance pay due to wrongfu…
>>> This is neither and I really wonder who is advising them to take these steps. I'm not sure why people have missed this, but Silver Lake is an investor in Zynga, just like Skype...
Sometimes you just have to sue to enforce a contract and your rights. Many employees either don't realize this or they don't have the stomach for it. If you find yourself in this position, my advice is to play the game and see it through. 1. Don't resign, don't capitulate and hire a good lawyer immediately. If you don't have the cashflow, but are defending a huge pile of stock about to IPO you'll probably find a lawy…
What Zynga is doing is pretty repulsive, as I previously commented in a related thread ( http://news.ycombinator.com/item?id=3219437 ), but it is not accurate to say that "[t]hey have to fire you for cause for you to lose your options." The overwhelming majority of employees at startups sign documentation acknowledging that their employment is at will and can be terminated at any time by either party for any reason,…
Cause is usually defined as willful failure or refusal to perform duties that continues after notice and an opportunity to cure, misappropriation or misuse of company trade secrets, commission of a felony or other action involving moral turpitude, etc. and "good reason" is typically defined as material reduction in compensation or duties, relocation to a remote area, etc.
When a company decides to terminate an early engineer because the 5% they agreed at the start is deemed too high for an engineer, usually the reason given is 'non-performance'. Even though the engineer is performing his engineering duties.
Does a company need to prove that the engineer failed to perform and document it? or is it usually the company's word against the engineer's? What stands up in the court of law as 'failure to perform duties'?
I don't think that Groupon execs are widely perceived as crooks, whereas Zynga's ones are more than hard to defend here. Moreover, Zynga execs' move was likely intended to increase the total worth of their shares; if they manage to claw 20% more shares, but destroy 30% of each share's value, they've hurt themselves even in the short term (figures made up for illustration, obviously).
I don't think that Groupon execs are widely perceived as crooks, whereas Zynga's ones are more than hard to defend here. Actually, Groupon's execs are widely perceived as crooks.