Question

Making employment decisions in Difficult times Gita Bhandari joined your social networking start-up in 2013, immediately after graduating from Carnegie Mellon University. She turned down better-paying consulting and investment banking opportunities to get in on the ground floor of a young, fast-growing company. As compensation, Bhandari receives a nominal salary and stock options. Because the company’s product will require three years to bring to market, the options do not vest for three years. This means that Bhandari forfeits all of the stock options if she leaves the company before 2016. In 2015, the company began having serious problems. Even though the project is on schedule and is anticipated to be a huge success, costs are skyrocketing, and your investors demand a significant reduction in operating expenses. You are considering firing Bhandari. Although she has performed well, Bhandari was the person most recently hired. She is an at-will employee, but, considering that she has less than one year to go until she can exercise her stock options, you fear a lawsuit, especially given the company’s close-knit character. At this critical stage, the legal fees alone from a wrongful termination lawsuit could bankrupt the company. Should you fire Bhandari to reduce operating expenses? Can you threaten to fire her if she does not agree to sur- render some of her options? If Bhandari is terminated, on what basis could she sue the company? Would she prevail? How could you have structured the relationship to avoid this potential lawsuit?

Answer 1

answer-

No, Bhandari should not be fired to reduce operating expense because she is one of the employ who is withe company from its start. from operating expense context, she has turned down high pay job and take this job in which she gets paid nominal salary. also she has more experience with the company and if she gets fired it will be more loss to company in terms of firing an experienced employee and potential chance of legal suits which can make business bankrupt.

No, i can not threaten to fire if she does not agree to sur- render some of her options because threat a person is a tort which is intentional in nature so it would make the situation worse. she can use this as argument in court that i threaten her to terminate her employment which would make my side look weak. also it would bring another legal case under tort law.

if Bhandari is terminated then she can sue the company on the basis of gender discrimination, Racial discrimination and fraud. she can build a case that i have fired her because she is female and from Indian race. she can also charge me with fraud because i has agreed to offer her stock options and when the three years time is coming , i am backing my side not to give her stock options in the company. she would prevail because she is the employee who had no complaint related to her performance in the company,.i have no logical and legal reason to fire her. she is performing good for her job which gives her strong argument in the case.

To prevent from legal lawsuit, i would make positive relationship with Bhandari ,like friendly relationship and offer more attractive offer to her like increase her salary or give her job back in the company because legal suits will make company bankrupt. so it ie better to keep good relationship with Bhandari and find another ways to reduce operating expenses.also if i have to fire her legally only if then i should be looking for legal reasons not any type of illogical reason even there is employment at will.