My latest cases against Walgreens and Uber show how big business has convinced most employees not to stand up for themselves — and the importance of choosing to do new things to get to new places in life

For the past two years my law firm has been representing California Walgreens Store Managers in court, accepting clients through a dedicated website. We now represent more than 125 of them in Aguilar v. Walgreens. Walgreens pays its store managers a salary, and they do some management work. But not that much, in most cases. …


Big businesses and business people threaten and file lawsuits all the time, recognizing the lawsuit for what it is — a mechanism for getting what you’re entitled to (or might be). California employees sue their employers all the time, often for wages, sometimes for discrimination, sexual harassment, etc. But usually they do it after they quit. It’s common to worry: Is it smart to you sue your employer while you still work there? You’ll be treated badly or fired, right?

Only if you’re lucky.

California law authorizes courts to award big damages for any employer retaliation following an employee asserting his or her legal rights. You can find a few quick examples of multi-million dollar verdicts at the end of this article. Even the appearance of retaliation generally can be expected to result in a nice settlement. Well advised employers know this and act accordingly. If your employer is foolish enough to retaliate against you for demanding what you’re entitled to, you could find your retirement fully funded in relatively short order. …


The Lure of Equity Compensation

For decades startups have offered equity to lure talentat below market salarieswith the promise of future wealth. During the dot.com boom that began in 1995 and peaked in March 2000, the Nasdaq Composite stock market index rose by 440% closing at an all-time high on March 10, 2000, creating employee-millionaires and even billionaires at many IPOs. Of course, for those who did not or could not diversify their holdings, much of that wealth disappeared as the Nasdaq Composite declined nearly 80% by October 2002.

Despite the ups and downs of the subsequent decade, which included the 2008 financial crisis, equity compensation continued to lure talent hoping the boom would return. On October 23, 2015, the Nasdaq Composite finally re-achieved its March 2000 peak — a bear market had returned. But what about the promise of wealth from equity compensation? Changes in accounting rules and in market condition raise significant doubts of an employee-millionaire resurgence, suggesting that, on average, employees should negotiate for cash compensation instead of equity when they can. …


Just one more way equity incentives often aren’t worth what employees were led to believe, but this time employees have a remedy.

In May 2019 Uber Technologies, Inc. finally went public in an $8 billion IPO. The $45 per share IPO price valued the company at $82.4 billion. Uber delivered its employees’ shares per their Restricted Stock Units (“RSUs”) at the IPO — at that $45 price — even though the RSU agreements provided for Uber to deliver the stock six months later. The stock had declined to about $27 per share six months later when the 180-day “lock-up” period expired and employees could finally sell. So, employees owe income taxes based on a $45 IPO price that they couldn’t realize, and that hasn’t been seen again since opening day. …

About

Ray E. Gallo

Ray Gallo is a California lawyer, entrepreneur, and investor, a retired skydiver, and a meditator.

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