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Zynga to employees: Give back our stock or you'll be fired

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Re: Zynga to employees: Give back our stock or you'll be fired

#311

Earlier quoted context omitted.

IANAL. Considering the employees are going to be challenging California's "at will" employment laws and the fact that the charges against the employees is performance based, how likely is #2 to have a fighting chance?

"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.

Most of Europe is the same too. Employment laws are pretty onerous. This is great for employees and I think more or less works in mature industries and businesses (think of a 10 year employee, who gets a new boss that they dont get on with so the boss just fires them).

This stricter regulation does make starting businesses very difficult, and a definite advantage the US has over Europe.

I think the answer is combination of the two where there is some kind of threshold where new/small companies have more freedom to dismiss, but forces larger businesses to treat their employees fairly.

Re: Zynga to employees: Give back our stock or you'll be fired

#312
post #302
post #285

Earlier quoted context omitted.

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…

>not everybody in the game is for building something or for changing the world or for passion.

You fucking suck.

I am not clear if youare advocating these actions or not - but let me make it very clear to you; if you are a proponent of such behavior - lets make sure we never cross paths.

This is NOT OK.

People like this are CANCER.

Sure - many instances of CEOs end up in the position of a Pincus - but it DOES NOT make it ok.

Pincus is a detriment not a person to be idolized.

Re: Zynga to employees: Give back our stock or you'll be fired

#313
post #309

Earlier quoted context omitted.

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…

It is very hard for a company to prove willful failure to perform duties when an engineer is actually executing on assigned projects, or at least attempting in good faith to execute. Engineers who have contractual protection against termination without cause are usually well-protected against arbitrary terminations on "non-performance" grounds and the company has to do a lot more than loosely assert (in "he said / she said" fashion) that someone's performance comes up short. Moreover, in most cases, the contract clause will specify that, in order to effect a termination on this ground, the company must give notice to the employee specifying why the performance is inadequate and give the employee a window within which to cure any defects in performance. This makes it doubly difficult to terminate someone on non-performance grounds because the charges have to be detailed and there will always be an argument about whether any deficiencies were cured if the employee is actually trying to perform all assigned duties. The company can try to document such cases all it wants but will normally hold a losing hand in trying to prove "cause" on that ground in such cases.

The Zynga cases are different, however, because the employees being squeezed in those cases are almost certainly pure at-will employees who have no contractual protection against being terminated without cause. Without the contractual protection, such employees can be terminated for pretty much any reason in the normal case and, if "non-performance" is cited as the reason, the company does not need to prove anything to back this up. "Non-performance" in such cases is often nothing more than a label used to rationalize a decision made on who knows what ground (e.g., on the ground that the company just wants to get someone's potentially valuable stock back before it vests).

Re: Zynga to employees: Give back our stock or you'll be fired

#314
post #79

Earlier quoted context omitted.

They have a strong argument that the options deprived them of real salary that they would have earned elsewhere. It will be interesting though. The reality though is they just lost every bit of talent they ever gained. The good talent is already in talks with other organizations I can guarantee you, I personally would be looking for an exit and no one I mean no one worth their salt is going to sign up with them now.

" ... and no one I mean no one worth their salt is going to sign up with them now." I think this is probably a bit extreme (I realize you may be employing hyperbole for effect but still) Zynga is a considered a "hot" IPO candidate and as such you will find folks who recognize that not everyone is a super star. Some talent might be more attracted to Zynga because they 'deal with the dead wood' in a proactive way. And…

>And pre-IPO options are better than post-IPO options.

Not if they decide to take yours back so they can get more money. pre-IPO options with Zynga are worth nothing.

Re: Zynga to employees: Give back our stock or you'll be fired

#315

Earlier quoted context omitted.

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?

This analogy isn't correct with regard to future periods, vesting is concurrent with your participation (contribution and effort). The trigger for earning the bonus is not if the company is in business that year, but if you were a member of the company and contributed during that period to earn the bonus. The issue at hand is mid-stream renegotiation of the future un-earned bonuses.

Re: Zynga to employees: Give back our stock or you'll be fired

#316
post #261

Earlier quoted context omitted.

>I think this is the execs trying to grab as much stock as possible for themselves pre-IPO, so they can dump it and run. This is EXACTLY what is happening - anyone who thinks otherwise is deluded or plain stupid. When Lockheed bought Savi technology, the RFID company, there were massive stock bonuses given out to the the Savi execs just prior to the sale. Then they told all the employees who had been there less than…

"Pincus is a very very VERY shady character" Any examples of this? Not that I don't believe you, but just curious

http://techcrunch.com/2009/11/06/zynga-scamville-mark-pinkus...

Re: Zynga to employees: Give back our stock or you'll be fired

#317
post #309

Earlier quoted context omitted.

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…

It is very hard for a company to prove willful failure to perform duties when an engineer is actually executing on assigned projects, or at least attempting in good faith to execute. Engineers who have contractual protection against termination without cause are usually well-protected against arbitrary terminations on "non-performance" grounds and the company has to do a lot more than loosely assert (in "he said / sh…

What about the 'bad faith' argument presented in the sibling comment?

> [...] Kmart’s discharge was in 'bad faith' and that, even without a contract, such a termination gave rise to tort liability. The court agreed [...]

Re: Zynga to employees: Give back our stock or you'll be fired

#318
post #156

Earlier quoted context omitted.

I own my own freelancing company now doing JS web apps and mobile, I am based in the Orlando Florida area, but I am part of a Vally start-up as the CTO. Sorry I have to be vague on that topic right now. That being said, I was an executive at Marriott and was in line for the CTO position before I left, I did rewire the options contract with Marriott and went through several iterations with Legal. I also built 3 start-…

Got it. Yeah, someone with CTO title might bend the rules a little. Otherwise stock and option plans are generally approved by the board. Asking a company to redraw the contact essentially makes it a CEO's call to reconvene the board as it goes outside of standard grant plan - not something that they'd do for a staff employee.

I do this on normal contracts. Just mark out the parts you don't agree with, add things you want in there, initial all your changes, sign and date it. Sometimes it will go through without anyone noticing (so make sure you have a photocopy).

Re: Zynga to employees: Give back our stock or you'll be fired

#319
post #62
post #54

Earlier quoted context omitted.

as an executive, do you think that zynga's executive team gave any thought to the bad press this might generate and the talent that this might scare away? From my perspective, this sort of thing scares me away from companies, because they might do it again in the future.

Honestly? I think this is the execs trying to grab as much stock as possible for themselves pre-IPO, so they can dump it and run. There's no way that this actually turns out to be a net positive for the Company. It's going to make it significantly harder to hire actual talent, it's going to cause morale decay and revolt from within the company, and it erodes Zynga's brand. Literally the only benefit here is that the…

My thoughts too, they only want the stock for themselves.

Re: Zynga to employees: Give back our stock or you'll be fired

#320
post #119

Earlier quoted context omitted.

I rewrite the contract so that all options that have been granted but not vested, vest on termination. I was bite by this one and learned my lesson, I have also been bit by dilution, you pick these things up along the way. If they do not agree to vest on termination then we go back to salary negotiation or I walk. To me if they can terminate you and snatch back millions, it's just to big of a carrot to do so, as well…

"If they do not agree to vest on termination then we go back to salary negotiation or I walk." So true. Expensive lesson for these folks.

Sometimes I pine for the good ol' days where this kind of unethical behavior would be met with a good old fashioned ass kicking.
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