“On FMLA. Don’t want to return, but want unvested stock. What can I do?”

Question: I am currently out on Family Medical Leave Act (“FMLA”) to help my mother who is sick. I do not want to return to work after my leave time is over. However, I have a significant amount of stock that vests on December 31st and I don’t want to sacrifice this significant payout.
At the same time, I don’t want to burn any bridges.

If I give two weeks notice on December 22nd, which means my last day is January 5th, and my employer instead stops my employment immediately, is my last day of employment December 22nd or January 5th?

Thank you!

Don’t Want to Lose Out
Nashua, New Hampshire

Answer: Dear Don’t Want to Lose Out: You are wise to try to keep what was awarded to you for past service, and to do your best to plan your departure so as not to leave empty-handed. Your thoughts are on-target. Here’s my answer, along with a few other things to think about:

1. Before you do anything, you MUST carefully review your employer’s stock, stock option or equity plan to determine when you are scheduled to vest, and how you might possibly forfeit your unvested shares. Employee benefit plans are just chock full of rules and regulations that must be adhered to very carefully in order to safeguard your stock, stock options, or other forms of “equity.” For this reason I strongly urge you to promptly get a copy of your employer’s stock or equity plan from Human Resources, and read it over carefully.

Very often these Plans say things such as “If you submit a notice of resignation prior to your vesting date, then you forfeit all future vesting.” Sometimes they include provisions to this effect: “If you do not provide at least 30 days prior written notice of resignation, then you forfeit unvested equity.” Not commonly, but sometimes failure to provide a certain amount of pre-resignation notice even triggers forfeiture of already-vested awards. The point is this: You must examine your stock plans carefully, or proceed at your own peril.

2. It is increasingly common for employers who receive notice of resignation to turn the tables around and make that very day the employee’s last day of employment. Unless you have a written employment contract with a set term of years of employment, then as an “at will” employee, your employer could do just that. If this does happen to you, as it seems you suspect it might, then you would lose all of the stock that is scheduled to vest, surely not a good outcome. For this reason, I strongly suggest you wait until after December 31st to submit your notice of resignation.

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3. You are wise to try to avoid loss of stock vesting, and not to “burn bridges,” but to achieve those two goals, you might have to experience the discomfort entailed in returning after FMLA leave, even if just for a brief period. Both of your goals – vesting in your unvested stock, and avoiding “burning bridges” – are truly wise paths to pursue. However, doing so without giving your employer what most employers feel they need and deserve: reasonable notice of resignation to that they have “transition time,” may not be possible.

You have not shared why it is you do not want to return to your job after your FMLA leave expires. It might be quite important to you. But, you do need to weigh the “discomfort” of returning to your job against the potential “disappointment” of not achieving you goals, that is, the vesting of your stock and not “burning bridges.”

4. But you would be wise, too, to anticipate and appreciate the feelings your employer may have if you do not leave in the “right way.” First, rightly or wrongly, your leaving right after vesting in your next chunk of unvested stock might make certain people feel that you “pulled a fast one” or otherwise did not act in good faith. I would disagree with that view, but as the saying goes “Feelings are feelings.”

Second, rightly or wrongly, your leaving without first returning from FMLA leave – and thus denying your employer the chance to gain from you, or for another employee to “download” from you, all of your knowledge, information, know-how, passwords, pointers, even introductions to clients, vendors and other valuable relations – would likely engender ill will in your employer and, as you say it, “burn some bridges.”

Because I am both an employee advocate and an employer, I think I can see “both sides” of many employment circumstances. I would truly understand your employer being disappointed, if not upset, if you provided no advance notice of resignation, and thus no transition assistance before your departure. I believe both employers and employees should give each other a reasonable degree of “transition assistance” when the employment relation ends, as a matter of courtesy, respect and gratitude, all of which “go both ways.”

Hope this helps you make the best transition possible, both with your stock vesting and with your positive future relations with your former employer intact. You never know if and when you will want to or will have to “cross that bridge again.”

My Best,
Al Sklover 

P.S.: By the way, tired of all this reading? Rather just sit back, relax, watch and listen? Consider Sklover Videos On Demand. See our Complete List. Just [click here.]

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