[prpon]

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 engineer because the 5% they agreed at the start is deemed too high for an engineer, usually the reason given is 'non-performance'. Even though the engineer is performing his engineering duties.

Does a company need to prove that the engineer failed to perform and document it? or is it usually the company's word against the engineer's? What stands up in the court of law as 'failure to perform duties'?

[grellas]

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).

[johnyzee]

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 [...]

[electromagnetic]

If you had clear reasoning that you was dismissed for a reason other than failure to perform duties, then you would have cause to sue.

FTA two people already retained council, settled and still got to keep a portion of their stock.

What Zynga is worried about is that if they're going to be publicly valued at $1 billion, the guy who owns 5% of stock because he was there from day one is going to land $50 million and walk.

I imagine that the biggest problem with IPO's for companies like Zynga (especially if they're acting douche to their employees) is that they risk losing a lot of employees. Either selling up stock to get the cash, or simply retiring to live off dividends and slow-stock sale tactics.