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Sam Altman on opeanai non disparagement exit clause
- aabhay 2y ago… but its not “vested equity” though? It’s “profit participation units”.
- orionsbelt 2y agoEquity can refer to stock, options, PPUs, etc. The point is the valley norm is that the vested portion is yours to keep. Some private equity backed companies will be more aggressive and claw back vested, but that’s outside the norm for VC backed companies.
- SantalBlush 2y agoI asked a friend who left OpenAI about their experience working there. They said, "I can't complain."
- gumby 2y agoI don't believe this. Having been CEO of several startups, I know the wording of the equity plan and grant documents are really important. There are plenty of things not worth your time paying attention to, but these documents are too important for that.
- lolinder 2y agoI don't think the controversy stems from any provisions in the equity plan and grant documents. The Vox article only talked about the off-boarding NDA, and that's all that Altman is talking about here: > there was a provision about potential equity cancellation in our previous exit docs; although we never clawed anything back, it should never have been something we had in any documents or communication. Mind you, Altman could still be lying and that would be very much in character, but this also sounds like a very plausible explanation for the hubbub.
- baobun 2y agoRSUs aren't technically equity. Did Altman ever address the tangential conversation about RSU cancellation?
- crazygringo 2y agoThis wasn't in any of those, though. This was in something you were asked to sign when exiting the company, and I can very much imagine that it was something HR or legal thought was a good idea to add in a kind of "better safe than sorry" way, and that the CEO wasn't aware of. I'm not saying it's necessarily true -- but I do think it falls in the realm of believability.
- gumby 2y agoAnything that involves repurchase should be reviewed by the CEO and lawyers, since ownership is a board level matter.
- crazygringo 2y agoIt wouldn't actually involve any repurchase from what I understand, because these aren't even actual shares (RSU's) to begin with. They're not actual ownership at all. They're some kind of special sharing-of-future-profits agreement.
- nosseo 2y agoThe setup for this - the clause saying that if you didn't sign an exit agreement within sixty days the company would reclaim your equity - was in the equity plan and grant documents: https://x.com/KelseyTuoc/status/1791584341669396560 https://x.com/KelseyTuoc/status/1791584341669396560
- papercrane 2y agoNot a lawyer, but "general release of claims" seems like a term of art which I would expect to be a something that would waive your right to sue, and not an agreement that includes a non-disparagement clause.
- patrickhogan1 2y agoTemplates. I mean come on. Most people use templates. They don't hand craft exit documents. When starting a company you are focused on building.
- kingkongjaffa 2y agoSweating CEO sends full damage control level tweet. From community darlings to a quickly cratering reputation.
- talldayo 2y agoThere's no mistaking it. > i did not know this was happening and i should have. > the team was already in the process of fixing the standard exit paperwork over the past month or so. The cherry on top? He's cry-typing it like a tumblr apology. Just pathetic.
- DiggyJohnson 2y agoHow would you recommend a CEO handle this situation, starting from roughly a week ago?
- dmitrygr 2y ago> How would you recommend a CEO handle this situation, starting from roughly a week ago? 1. Explain how it happened, since he 100% knew. What CEO does not know how his company's equity is distributed and under what terms? 2. Explain how it will be fixed, in detail. 3. Proactively reach out to all those affected, as per step 2. 4. Resign. 5. Reconsider his life and how he handles feedback, since he has had issue with criticism before: https://news.ycombinator.com/item?id=40396787 https://news.ycombinator.com/item?id=40396787
- crazygringo 2y ago1. This had nothing to do with how equity was distributed. This was a clause in an agreement that employees were asked to sign when leaving, not when they joined. As other comments have stated, it's entirely plausible he was unaware. Exit agreements aren't something you expect CEO's to be poring over in detail -- they have HR and lawyers for that. 2. 3. Presumably the company is working on that, and this tweet is the first step? This has become pretty public by now anyways. 4. Have you resigned from every job you've ever had if you made a mistake? If you wrote a design document with a single mistaken requirement? This one clause was one miniscule aspect of running the company out of hundreds of thousands. Demanding resignation is massively disproportionate here. 5. "Reconsider your life" is outside the scope of this.
- xyst 2y agoDude gets caught with his pants down and pulls a play out of Sony’s playbook to calm the masses. I wonder what will actually be discussed when impacted employees talk in private with Sam (or whatever subordinate he delegates this to). I wouldn’t be surprised if former employees are ambushed during the private meeting.
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- parsimo2010 2y agoI’ll believe this apology is serious after/if a former employee contacts them and reports that they actually got their NDA modified.
- jostmey 2y agoWhat was Open AI's legal team afraid of? I can only speculate, and maybe there wasn't a single reason for their LIFETIME clause, but I'm going to guess it has to do with the sources of data used to train chat GPT
- aabhay 2y agoThis was my immediate reaction as well. The data used to train these systems is inherently really sketchy. And it’s something that any engineer working on it would immediately notice. We certainly did, when building our own models.
- ADeerAppeared 2y agoThere's a few options, OpenAI's list of legal risks is extensive and horrifying. * For the data sources, we know there's a lot of CSAM in there, and that OpenAI knowingly shipped this data to 3rd party companies to tag it. Time ran an article about their Kenyan parters, who quit on them because "Look at this image. If the image is CSAM, push the button" is a horrifying job. * There's copyright. AI relies extensively on hiding the true scale of the copyright problem by filtering infringing content out of the AI responses. But the engineers of those systems know the dirty details. (It's dubious that such filtering would bring them back into compliance with fair use; LLMs are paraphrasing machines and copyright filters do not cope well with paraphrasing) * Discrimination is a shitshow. LLMs discriminate as their dataset isn't reflective of reality, but of what and how we choose to record reality. And as Google's "Diverse Nazis" image generation shows, messing with prompts doesn't work to fix this. It'll be discrimination lawsuits either way. All major AI firms know of this problem, and internally investigate it to avoid gaffes like Google's. In practice, the boring answer to the question is "all of the above and then some". A big problem for OpenAI is that these are massive problems, for which their engineers could be dragged into a courtroom to testify about.
- kosolam 2y agoThis disaster management now needs disaster management..
- msrenee 2y agoYou've got a typo in the Hacker News title. "opeanai" should be openai or preferably capitalized to match whatever brand standards they use.
- alpb 2y agoPrior thread: https://news.ycombinator.com/item?id=40393121 https://news.ycombinator.com/item?id=40393121 A few questions: * Is such a non-disparagement clause that claws back your earned compensation legally enforceable, or does it have any legal basis (at least in the state of California)? * Are non-disclosure agreements enforceable post-employment if you're claiming to be a whistleblower unofficially, i.e. you just go to twitter and rant about your ex-employer?
- akomtu 2y ago[flagged]
- lioeters 2y agoHe's just predicting the next token based on its likelihood of generating more profit.
- DueDilligence 2y ago[dead]
- Brendinooo 2y agoOnce my employer asked us to look over an updated employee handbook. There’s was a bunch of nonsense like “no taking pictures in the office” and “no drinking alcohol in the office”. (The office has kegs in it!) We called this out and HR was like “it was some template, let me see if I can get it changed” and we went from there. I dunno if nonsense like that happens at a bigger company like OpenAI but I wouldn’t rule it out, nor would I rule out a CEO not knowing about every detail that HR comes up with.
- madisp 2y agoAre stock options "vested equity"? Afaik they're a derivative, and it's surprising to see this exact phrase both in the OpenAI's response to the vox.com article and in sama's tweet. Also, isn't OpenAI using some sort of profit-sharing units instead of options?
- orionsbelt 2y agoYes to all of your questions, but not sure what your point is.
- croemer 2y agoThat consciously using the wrong term could allow weaseling out: we never clawed back vested equity. We only clawed back profit sharing units.
- modeless 2y agoAs he says, he should have known, but I think it's plausible that he didn't know every detail of their termination agreements. I would certainly be more comfortable if it was something invented by an overeager lawyer rather than policy directly from the top. Glad to see an offer to fix it for former employees. Although it's not clear what form that fix would take. If people signed a perpetual non-disparagement clause because they believed their vested equity was under threat, the correct fix would be to void the non-disparagement clause. And even asking for a perpetual non-disparagement agreement in the first place is gross to me, unless it comes with perpetual severance pay. I just re-checked my exit paperwork from Google and Meta and Microsoft and I didn't see anything like that. I don't think that Sam is apologizing for that specifically. He seems to be apologizing about the equity part only. I'd be happy to see clarification here. Unfortunately I think apologies are not usually the right PR move, because the mob generally doesn't accept them, but as the person who posted the top thread on the previous post, I'm glad that he did apologize despite that.
- plorkyeran 2y agoNo, it is not plausible that he didn't. This is the sort of thing that CEOs are very involved in the details of. If an overeager lawyer can add a lifetime non-disparagement clause to the equity plan without the CEO even noticing then you have some very big problems. This isn't some routine HR stuff.
- bamboozled 2y agoHe seems to defer to the “I didn’t know” excuse far too often for my liking.
- ethbr1 2y agoHard to blame someone for unknown unknowns.
- lolinder 2y ago> can add a lifetime non-disparagement clause to the equity plan I thought we were talking about exit docs, not clauses in the equity program. Do we have any reason to believe that the equity program itself contained language to this effect? The Vox article only talks about the NDA employees sign on the way out, it's only random internet comments that I've seen speculating about the contents of the equity program.
- MrCheeze 2y agoTwo reasons why I don't particularly believe him: 1) Altman's companies have had similar clauses before: https://news.ycombinator.com/item?id=40396787 https://news.ycombinator.com/item?id=40396787 2) The entire OpenAI board debacle started because Sam wanted Helen Toner removed from the board for publishing a paper he felt was disparaging to the company: https://thezvi.substack.com/p/openai-the-battle-of-the-board https://thezvi.substack.com/p/openai-the-battle-of-the-board
- orionsbelt 2y agoYou are confusing two issues. It is standard practice for companies to require a separation agreement with a release of claims and non disparagement clause in connection with receiving any severance, including keeping a laptop like in item 1 you linked to. Companies are not going to pay you or give you something of value and then have you turn around and sue them or disparage them and cause problems. Sam’s current tweet is solely about whether vested equity could be clawed back as a penalty for refusing to agree to a non disparagement in connection with a separation if you don’t agree to non disparagement and a release of claims. That is well outside the norms.
- toomuchtodo 2y agoRequiring non disparagement is now in violation of labor law per the NLRB as of February 2023. If someone is putting one in front of you, contact the NLRB and an employment attorney to pursue recourse. https://www.nlrb.gov/news-outreach/news-story/board-rules-that-employers-may-not-offer-severance-agreements-requiring https://www.nlrb.gov/news-outreach/news-story/board-rules-th... (“Board Rules that Employers May Not Offer Severance Agreements Requiring Employees to Broadly Waive Labor Law Rights”) https://www.axios.com/2023/03/27/labor-board-says-non-disparagement-clauses-are-unlawful https://www.axios.com/2023/03/27/labor-board-says-non-dispar... (“Labor Board says non-disparagement clauses are unlawful — here’s what that means”)
- orionsbelt 2y agoCompanies can, and do, still seek non-disparagement clauses, just with carve outs that make it clear any protected rights per the NLRA or pursuant to other applicable state laws are carved out.
- summerlight 2y agoThis seems weird. Of course, CEO is not supposed to know everything, but this particular clause was probably seen as a deal breaker for many candidates, including strategically important top talents who care more about freedom. Unless Sam was completely excluded in the recruiting process, I guess he should've heard complaints against this?
- lolinder 2y agoWe're talking about a clause in the exit documents, not the onboarding documents. This would never have come up while recruiting, only when people quit or are fired, at which point their complaints probably don't seem important enough to escalate to the CEO.
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- summerlight 2y agoIf this was not in the employment contract, then it's even more problematic. I'm pretty sure this is very likely violation of multiple laws. If some random lawyer added this lifetime clause for their own sake without escalating to the board, then they should be immediately fired. It's possible that Sam was not aware of its illegality and now wanted to minimize his liability though.
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- Imnimo 2y agoI don't know whether Sam Altman personally knew about the clause, but clearly OpenAI as an entity knew - it didn't appear out of thin air, and employees who were leaving were clearly away of it. There was even a bit of a minor hullabaloo on Twitter a week or two ago when another employee left and noted that they gave up their equity because they refused to sign the non-disparagement document.
- threeseed 2y agoIt's standard boilerplate. So it could well have just been part of the template that their legal team likely started with.
- lightbritefight 2y agoA lifetime non disparagement clause is not in any way "standard boilerplate." That is an extraordinary clause, which is evident by the wide, stunned reaction and the CEOs rapid backpedaling as it becomes public knowledge.
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- ano-ther 2y agoIt’s astonishing how emotional this topic gets on HN. First, when the original saga happened and now when people leave OpenAI, apparently with a non-disparagement / NDA clause in their severance agreement. Such an agreement seems very standard[1], and I don’t understand why this is so scandalous. [1] Edit to add: I have seen several such agreements on both sides, so this is from personal experience
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- 1vuio0pswjnm7 2y agoIf true, sounds naive. Ship of fools.
- skilled 2y agoThis probably shouldn’t have been flagged for the sake of keeping Sam accountable. I am sure some calls were received because why come out and apologize for it.
- donsupreme 2y agolol this is flagged by YC