Silicon Valley Self Regulation

Story Four

Firing Employees Just Prior to Vesting Cliff


An early employee who joined a young company that has since had a lot of success was let go after 11 months following a disagreement with the founders and thus wasn't entitled to any of his equity as he hasn't hit his vesting cliff yet despite the fact he'd played a key role in the company's growth

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Ivan joins Kullervo as a senior employee handling much of the company’s networking architecture. After eleven months at the company, Ivan reaches an impassable disagreement with Merille and Eloise. They agree that Ivan’s time with the company has come to an end, and Ivan agrees to leave. His employment contract included an equity structure with a one year cliff, meaning he isn’t entitled to the first allotted amount of his equity until after serving at least a one year tenure at Kullervo. Ivan has served eleven-twelfths of the time; the company is not contractually obligated to give Ivan any of the equity that allotted for him. Should Kullervo provide some amount of equity to Ivan upon his departure even though they are not legally obligated to do so?