Right, but the employee would be able to refuse the consideration, and thus the contract, and the state of affairs wouldn't change. They would be free to say whatever they wanted.
If they refuse the contract then they lose out on their options vesting. Basically, OpenAI's contracts work like this:
Employment Contract the First:
We are paying you (WAGE) for your labor. In addition you also will be paid (OPTIONS) that, after a vesting period, will pay you a lot of money. If you terminate this employment your options are null and void unless you sign Employment Contract the Second.
Employment Contract the Second:
You agree to shut the fuck up about everything you saw at OpenAI until the end of time and we agree to pay out your options.
Both of these have consideration and as far as I'm aware there's nothing in contract law that requires contracts to be completely self-contained and immutable. If two parties agree to change the deal, then the deal can change. The problem is that OpenAI's agreements are specifically designed to put one counterparty at a disadvantage so that they have to sign the second agreement later.
There is an escape valve in contract law for "nobody would sign this" kinds of clauses, but I'm not sure how you'd use it. The legal term of art that you would allege is that the second contract is "unconscionable". But the standard of what counts as unconscionable in contract law is extremely high, because otherwise people would wriggle out of contracts the moment that what seemed like favorable terms turned unfavorable. Contract law doesn't care if the deal is fair (that's the FTC's job), it cares about whether or not the deal was agreed to.
If say that you were working at Reddit for quite a number of years and all your original options had vested and you had exercised them, then since Reddit went public you would now easily be able to sell your stocks, or keep them if you want. So then you wouldn’t need to sign the second contract. Unless of course you had gotten new options that hadn’t vested yet.
Btw, do you have any idea whey they even bother with the second contract? Couldn't they just write the same stuff into the first contract in the first place?
is it even a valid contract clause to tie the value of something to a future completely unknown agreement? (or yes, it's valid, and it means that savvy folks should treat it as zero.)
(though most likely the NDA and everything is there from day 1 and there's no second contract, no?)
kmeisthax|1 year ago
Employment Contract the First:
We are paying you (WAGE) for your labor. In addition you also will be paid (OPTIONS) that, after a vesting period, will pay you a lot of money. If you terminate this employment your options are null and void unless you sign Employment Contract the Second.
Employment Contract the Second:
You agree to shut the fuck up about everything you saw at OpenAI until the end of time and we agree to pay out your options.
Both of these have consideration and as far as I'm aware there's nothing in contract law that requires contracts to be completely self-contained and immutable. If two parties agree to change the deal, then the deal can change. The problem is that OpenAI's agreements are specifically designed to put one counterparty at a disadvantage so that they have to sign the second agreement later.
There is an escape valve in contract law for "nobody would sign this" kinds of clauses, but I'm not sure how you'd use it. The legal term of art that you would allege is that the second contract is "unconscionable". But the standard of what counts as unconscionable in contract law is extremely high, because otherwise people would wriggle out of contracts the moment that what seemed like favorable terms turned unfavorable. Contract law doesn't care if the deal is fair (that's the FTC's job), it cares about whether or not the deal was agreed to.
hmottestad|1 year ago
unknown|1 year ago
[deleted]
godelski|1 year ago
Who would sign a contract to willfully give away their options?
unknown|1 year ago
[deleted]
eru|1 year ago
pas|1 year ago
(though most likely the NDA and everything is there from day 1 and there's no second contract, no?)
eru|1 year ago