Durward James Gehring Quoted in the Wall Street Journal
“Zynga Leans on Some Workers to Surrender Pre-IPO Shares”

Employee Benefits and Executive Compensation partner Durward James Gehring was quoted in the Wall Street Journal November 10 regarding Zynga's decision to demand that some employees return shares of stock or be fired. Zynga, the maker of such Facebook games as "Farmville" and "Mafia Wars" is expected to go public this year, according to the Journal.

As the Journal reports, Zynga's CEO feels the company doled out too many shares early on. But the demand for the return of shares could expose the multi-billion dollar company to employment litigation.

The move carries legal risks, according to the Journal. While it is legal to ask an employee to renegotiate pay, making such a request under threat of dismissal could be grounds for a successful lawsuit because an employer might be seen as breaking a contract. As several lawyers commented, however, the theory has not been tested in court.

One risk, Jim noted, was, "If word comes around that the company grants equity and takes it back … people may not want to go to work for you."

Click here to read the full article: http://on.wsj.com/tgt4dK