5 ms·

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 perfo

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?

kls 15y ago
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.
- ChuckMcM 15y ago
  " ... 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 pre-IPO options are better than post-IPO options. It will certainly be interesting to see if it affects their ability to recruit and retain talent. I can only hope that some of the HR people escape and can share the results with others. Too often there isn't any really definitive data post event if it was a net positive or loss for the company. This is why I think there is a lot of hand waving in the HR space, hard to get real numbers.
  - kls 15y ago
    I think this is probably a bit extreme (I realize you may be employing hyperbole for effect but still) Yes some but I don't think much, IT employment is very much based on trends, in the 70-80's the hot place to work was Bell Labs or DEC, in the 90-00's it was Google. If you ruin your name you loose the A-Listers interest and everyone in tech fashions themselves A-Listers. So when this happens you have to rely on finding talent that has not proven itself yet or settling for the "it's just a job crowd". The biggest draw to pre-IPO is stock and the possibility of fortunes. To me and probably quite a few others, this is a shot across the bow that they will limit the participation in the fortunes part, which kills the primary reason people join pre-IPO start-ups. I would not underestimate the gravity of this action especially in this hot of a market.
  - roc 15y ago
    > "Some talent might be more attracted to Zynga because they 'deal with the dead wood' in a proactive way." Would you really classify this as "dealing with the dead wood?" If they were "dealing with the dead wood", I'd expect they would just fire them for being dead wood in the first place and get their unvested options back as a side-effect. Trying to keep the dead wood employed, but scaring them into effectively renegotiating their contracts isn't the sort of "dealing with" that very many people are going to look upon favorably.
  - danssig 15y ago
    >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.
ajg1977 15y ago
Just because California is an "at will" state doesn't mean a company cannot be sued for wrongful termination or constructive dismissal.
- nobody3141592 15y ago
  But it's pretty difficult to prove unless you are a protected minority and the boss shows up in a white robe and says "we are firing all the N.....s" or you fire a secretary after he/she refused to sleep with you AND you got the refusal in writing! Usually the employee only wins because the company messed up the paperwork.
  - einhverfr 15y ago
    The point is, it's not about the firing. It's about an employment contract which involved compensation while an employee was working, where the employer backed out of that later and terminated the employee to keep from paying what are effectively back wages. I am against suing to get one's job back, esp. here. However, suing to keep the unvested stock they took when dismissing you is a bigger deal. Here's the thing: 1) Employee is promised stock for efforts 2) Company doesn't want to pay as promised 3) Employee is fired 4) Stock not paid as promised. I don't think the fact that this occurs in an at will state has any major impact on the analysis.
    - nobody3141592 15y ago
      Stock options vest in the future if you are still working there. The idea is that it keeps you committed - otherwise everybody cashes in on the day after an IPO and walks, and it rewards people who were the reason for the success. You can't leave and then expect to get unvested options = otherwise people would simply sign up for every startup, stay a month and move on - then come back years later when the company is a success and ask for their million dollars. It's abused when companies deliberately fire people before the options vest - this is relatively rare, since any sane company knows that getting rid of all your talent is a rather short term option. This is what Oracle did when they took over Sun - they fired almost all of the VPs before the deal so they would have no share. In their case it was more justified, these people hadn't contributed to Suns future (it didn't have one) and weren't the reason for the Oracle takeover - there was no reason why they should gain from Oracle being in charge when the music stopped.
alastairpat 15y ago
"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.
- frossie 15y ago
  In fact the majority of states in the US are at-will employment states. http://en.m.wikipedia.org/wiki/At-will_employment http://en.m.wikipedia.org/wiki/At-will_employment Pretty much the only significant reason you can't get terminated in the US is as a direct result of being in a protected class (so you can't fire someone for being black but you can fire a black person for any other reason including no reason at all)
- josephcooney 15y ago
  I'm not an Australian employment lawyer (or any kind of lawyer for that matter), but I believe companies under a certain size are exempt from unfair dismissal laws.
  - alastairpat 15y ago
    I may be wrong, but I think that was wound back as part of WorkChoices being repealed.
- acheron 15y ago
  Can you quit your job for no reason in Australia?
  - alastairpat 15y ago
    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.
- postfuturist 15y ago
  "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?

kls 15y ago

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.

ChuckMcM 15y ago
" ... 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 pre-IPO options are better than post-IPO options. It will certainly be interesting to see if it affects their ability to recruit and retain talent. I can only hope that some of the HR people escape and can share the results with others. Too often there isn't any really definitive data post event if it was a net positive or loss for the company. This is why I think there is a lot of hand waving in the HR space, hard to get real numbers.
- kls 15y ago
  I think this is probably a bit extreme (I realize you may be employing hyperbole for effect but still) Yes some but I don't think much, IT employment is very much based on trends, in the 70-80's the hot place to work was Bell Labs or DEC, in the 90-00's it was Google. If you ruin your name you loose the A-Listers interest and everyone in tech fashions themselves A-Listers. So when this happens you have to rely on finding talent that has not proven itself yet or settling for the "it's just a job crowd". The biggest draw to pre-IPO is stock and the possibility of fortunes. To me and probably quite a few others, this is a shot across the bow that they will limit the participation in the fortunes part, which kills the primary reason people join pre-IPO start-ups. I would not underestimate the gravity of this action especially in this hot of a market.
- roc 15y ago
  > "Some talent might be more attracted to Zynga because they 'deal with the dead wood' in a proactive way." Would you really classify this as "dealing with the dead wood?" If they were "dealing with the dead wood", I'd expect they would just fire them for being dead wood in the first place and get their unvested options back as a side-effect. Trying to keep the dead wood employed, but scaring them into effectively renegotiating their contracts isn't the sort of "dealing with" that very many people are going to look upon favorably.
- danssig 15y ago
  >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.

ajg1977 15y ago

Just because California is an "at will" state doesn't mean a company cannot be sued for wrongful termination or constructive dismissal.

nobody3141592 15y ago
But it's pretty difficult to prove unless you are a protected minority and the boss shows up in a white robe and says "we are firing all the N.....s" or you fire a secretary after he/she refused to sleep with you AND you got the refusal in writing! Usually the employee only wins because the company messed up the paperwork.
- einhverfr 15y ago
  The point is, it's not about the firing. It's about an employment contract which involved compensation while an employee was working, where the employer backed out of that later and terminated the employee to keep from paying what are effectively back wages. I am against suing to get one's job back, esp. here. However, suing to keep the unvested stock they took when dismissing you is a bigger deal. Here's the thing: 1) Employee is promised stock for efforts 2) Company doesn't want to pay as promised 3) Employee is fired 4) Stock not paid as promised. I don't think the fact that this occurs in an at will state has any major impact on the analysis.
  - nobody3141592 15y ago
    Stock options vest in the future if you are still working there. The idea is that it keeps you committed - otherwise everybody cashes in on the day after an IPO and walks, and it rewards people who were the reason for the success. You can't leave and then expect to get unvested options = otherwise people would simply sign up for every startup, stay a month and move on - then come back years later when the company is a success and ask for their million dollars. It's abused when companies deliberately fire people before the options vest - this is relatively rare, since any sane company knows that getting rid of all your talent is a rather short term option. This is what Oracle did when they took over Sun - they fired almost all of the VPs before the deal so they would have no share. In their case it was more justified, these people hadn't contributed to Suns future (it didn't have one) and weren't the reason for the Oracle takeover - there was no reason why they should gain from Oracle being in charge when the music stopped.

alastairpat 15y ago

"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.

frossie 15y ago
In fact the majority of states in the US are at-will employment states. http://en.m.wikipedia.org/wiki/At-will_employment http://en.m.wikipedia.org/wiki/At-will_employment Pretty much the only significant reason you can't get terminated in the US is as a direct result of being in a protected class (so you can't fire someone for being black but you can fire a black person for any other reason including no reason at all)
josephcooney 15y ago
I'm not an Australian employment lawyer (or any kind of lawyer for that matter), but I believe companies under a certain size are exempt from unfair dismissal laws.
- alastairpat 15y ago
  I may be wrong, but I think that was wound back as part of WorkChoices being repealed.
acheron 15y ago
Can you quit your job for no reason in Australia?
- alastairpat 15y ago
  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.
postfuturist 15y ago
"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?