This could yield a lawsuit at some point if those PPUs are worthless due to the board refusing to allow profits…

Right, PPUs are worthless until profitability but the board doesn’t want to be profitable?

I don’t believe offering PPUs as compensation when you intend never to be profitable is entirely legal

For a salaried position where the base salary is above the legal minimum salary for wage & hour exemption, I don't see what the legal problem would be.

Tortious interference? It’s pretty textbook right?

> Tortious interference?

How?

> It’s pretty textbook right?

No? Offering a compensation package can't be tortious interference, tortious interference requires an existing contract, and action by a third party that (along with a whole bunch of other conditions) causes a breach of that contract.

Well, you have to specify a jurisdiction. Let’s go with California since that’s where a lot of OpenAI’s employees are. Here’s what you need:

1. an economic relationship existed between the plaintiff and a third party which contained a reasonably probable future economic benefit or advantage to plaintiff;

2. the defendant knew of the existence of the relationship and was aware or should have been aware that if it did not act with due care its actions would interfere with this relationship and cause plaintiff to lose in whole or in part the probable future economic benefit or advantage of the relationship;

3. the defendant was negligent;

4. and such negligence caused damage to plaintiff in that the relationship was actually interfered with or disrupted and plaintiff lost in whole or in part the economic benefits or advantage reasonably expected from the relationship

It’s pretty open and shut, no?

Yes, its open and shut that offering a compensation package doesn't mean that, starting with #1.

And you can't make that case with the later decision by the nonprofit board (even if one assumes that an entity that has complete control of a party can even count as a "third party" for tortious interference rather than just being a source of breach of contract if it actually induces a breach), because the OpenAI Global LLC operating agreement expressly sets this out as normal, so there is no reasonable expected benefit of the relationship that is being interfered with.

If OpenAI Global LLC offered its employees the PIU/PPU as compensation but did not disclose (or, a fortiori, actively concealed), you could make a case for fairly simple fraud. But tortious interference is just not a tort that works here.

I don’t follow. You’re saying PPUs granted by the for-profit don’t carry a reasonably expected benefit? And that a parent can’t tortuously interfere with a subsidiary? Both are factually untrue. I don’t see the wiggle room here that you do.

> I don’t follow. You’re saying PPUs granted by the for-profit don’t carry a reasonably expected benefit?

Yes, a profit sharing claim in an LLC whose operating agreement explicitly says it will be operated for the charitable purpose of a controlling nonprofit and that profit will not be its guiding principle does not create a reasonable expectation that it will be managed for profit.

Either the employees have that information disclosed, and there is no expectation, or it is concealed by the subsidiary employing them, in which case there might be a reasonable expectation, but its due to fraud by the subsidiary, not interference by the parent.

It doesn’t sound like either of us have all the facts. We’ll leave it at that.

> This could yield a lawsuit at some point if those PPUs are worthless due to the board refusing to allow profits…

A lawsuit based on what? The OpenAI Global LLC operating agreement has a prominent notice...

https://images.openai.com/blob/142770fb-3df2-45d9-9ee3-7aa06...

from https://openai.com/our-structure

OpenAI recruits employees based on equity packages that will not amount to anything based on their operating agreement.

Live and learn I guess.