I am simply trying to explain why this is a moral issue and not a legal issue.
This is the equivalent of saying: 'your gonna have to take a pay cut or were gonna have to let you go'. It is morally repugnant and goes against everything we believe in the startup community, but it is not illegal, nor should it be.
Now the company says "give us back 2014 and 2015 or you're fired". What would you say?
The larger issue though here is that of a contract. The company has in essence said "we want you to stick around and so we are giving you an incentive of stock options which vest on such and such a schedule."
Later they are saying "give up what we gave you or leave so we can take them back." It's this choice here which says clearly "we are going back on our contracts with you."
A close example might be this "We are giving you a raise and will pay you retro pay next month when this goes through but you have to work fewer hours at your hourly wage" and then the next month saying "sorry, no retro pay for you."
I think this would be a fun case. And now that class action cases have taken a few serious setbacks in the courts, it seems to me that Zynga really should be getting sued by lots and lots of employees in individual lawsuits..... One piranha may be good for dinner, but don't wade into a swarm of them.
It's not at all clear-cut. See sections 5-6 of this article: http://www.bernabeipllc.com/pdfs/stockoptions.pdf
It is the equivalent of saying 'you need to take a cut in pay or you will be laid off'.
In most other kinds of contingent pay that's tortious: if you promise a building contractor contingency bonuses upon meeting certain deadlines, and then you purposely interfere to make them miss the deadlines so you can get the work cheaper (and admit doing so!), you're probably acting illegally. Heck, even basketball players have sued over instances where a team kept them out of a few games solely to cause them to miss performance targets.
Not only is it shady it is a legal term and that term is called bad faith, if you can prove the party acted in bad faith, which if what is being reported about, return it or get fired, then that one is pretty locked up, then they are in violation of the spirit of contract. Faith is one of the foundations of contract law. If you are found to have not honored the faith portion of the contract then more times than not, you will be on the loosing end of a contract dispute.
I think the fact that it continuously vests after a cliff, that it's clear in basically every options grant that you don't receive unvested options upon termination, and because employment contracts repeatedly emphasize that employment is completely at-will makes it pretty clear that you shouldn't count your unvested option chickens before they hatch, and hard to prove that you could reasonably expect to vest all options. The employees that have been there for multiple years will have already vested a big percentage of their stock regardless of what happens.
I think Zynga is repulsive, and will hopefully get punished hard on many fronts for this, but I'm not convinced that what they're doing is strictly illegal. I'm convinced they'll get sued, though.
The exception is M&A earn out or vesting for key hires, which is often yearly, and sometimes even crazier; 1/2/3/4 where it's 10% the first year, 20% the second, 30% the third, and 40% the fourth.
That latter vesting is pretty crazy - with each year, each point is usually getting nonlinearly more valuable as well.