Uber Lawsuit Alleges Employees Were Misled On Equity Compensation (techcrunch.com)

An Uber employee has filed a lawsuit accusing the company of misleading employees about their equity compensation. Uber "devised a fraudulent scheme to recruit highly sought software engineers," according to the case. From a report on TechCrunch: The lawsuit claims that Uber promised a more tax favorable type of options at the time employees were hired and then later changed the plan. The case alleges that at least 100 others on the Uber staff may have been impacted and that these stock options can potentially be worth "hundreds of millions of dollars" to employees and also save Uber "millions of dollars of tax deductions." The plaintiff, Lenza McElrath, who was previously a lawyer and is now an engineer at Uber, says that he was under the impression that all his shares could be treated as ISOs, which do not require an upfront tax bill. He said he was later given a notice about a change to the exercisability schedule, that effectively turned most of his shares into NSOs, which are taxed at the time they are exercised. While many startups allow their shares to become exercisable over the course of a four-year vesting agreement, Uber has share agreements that become exercisable after just six months. In other words, Uber employees can buy the stock they are entitled to shortly after they gain employment.

Comments

shocking!

[Gravis Zero]

You're saying that a company that is infamous for skirting the law and screwing people over is skirting the law and screwing people over?! How unpredictable! ;)

Re:Nice one...

[ranton]

A company that behaves in an unethical manner in the marketplace also deceives employees.

Or in this case, a company that behaves in an unethical manner towards low paid employees also deceives their more skilled employees. These developers didn't seem to care they were helping their company create a new servant class, but they sure noticed once their company started acting in a similarly unethical manner towards them. It's kind of like a spouse who knows their partner makes money being deceptive and ignoring regulations at work and then is outraged when that spouse has another lover on the side.

Hindsight is 20/20

[Ungrounded Lightning]

You're saying that a company that is infamous for skirting the law and screwing people over is skirting the law and screwing people over?! How unpredictable! ;)

But were they infamous for that when they were hiring the early-hire developers in question? Or did they only develop the reputation AFTER the developers had built the platform and the executives used it in ways that screwed over the "line workers".

Hindsight is 20/20. How were the engineers hired to build the infrastructure to know, at the time, that they were going to be shafted in a way even the early-hire shafting executives of most Silicon Valley startups would never dare? This strikes at the fundamental draw for engineer hiring for startups. If it becomes common practice, the startup-driven innovation cycle could collapse. Uber needs a big, public, spanking over this, to nip it in the bud.