Breach of Employment Promise - work as a CXO in a company

Dear HR Professional,

I am seeking your advice regarding a situation that I believe involves a breach of trust.

I work as a CXO in a company (let's call it CompA) and last week I was asked to leave. A notice was served to me by the company stating my last date of employment, my stock options, and the variable component of pay.

Last year, I had an offer from an MNC that paid me around 40% more than what I was getting at this company, CompA. The founder of the company literally begged me not to leave, stating that it would hurt the interests of the company, CompA. I really wanted to leave, but the founder then said that they would give me stock options and keep me employed with the company for at least the next four years until the options are fully vested in me. Two senior HR people, including the Chief HR Officer of the company, were also involved in this discussion.

Now, a few months later, he has asked me to leave, stating that the contract says that either party can give a 2-month notice. I told him about his promises and why he is causing me financial distress as I do not have any future job. This will impact my income. I also reminded him that I had a job offer and he only asked me to continue and even gave me stock options.

But now, all is gone, and I am left feeling cheated. This is a clear breach of trust. I wanted to ask the legal experts what they think about this. Isn't this a criminal breach of trust where I was promised something when the company really needed me, but then the promises were not honored? I have proof of all this in chat messages and also in the message that I sent the company that made the offer. There has never been an issue with my performance, and I was always appreciated over the years that I was with the company.

Dear member,

I empathize with your situation. It is unfortunate to note that this happened with a c-suite employee. This is nothing but a betrayal. However, we need to do a legal scrutiny of your post.

You have written, "I really wanted to leave, but the founder then said that they will give me stock options and will keep me employed with the company for at least the next 4 years until the options are fully vested in me."

Whatever the founder promised, did you make a contract for the promises? This is because a promise becomes a contract provided it is legally enforceable.

If not a legally enforceable promise, what kind of communication do you have? In the last paragraph, you have written that you have chat messages. However, whether the chat messages will be considered "contracts" under the provisions of the "Indian Contract Act, 1872" is a moot point.

Your case cannot be handled under the provisions of labor laws. If the case is taken up, then it has to be under the provisions of the contract act mentioned above. Therefore, you may approach a suitable lawyer who handles the contract cases. Possibly, the lawyer may give you better advice.

Thanks,

Dinesh Divekar

Thanks, Dinesh ji.

The chat messages state that "company will suffer a lot of loss if I leave, and there will be a major setback with your departure". A few days after this chat message, stock options were given to me. I have proof of that. I also have written proof to the new prospective employer that states that "my current employer has said that they will suffer and that their DRHP document is pending approval". DRHP approval is needed from SEBI for IPO listing.

So, I believe the undeniable proof is there that they promised and then went back on the promise, leaving me in a very difficult position.

Dear member,

The proof you have, can it be considered a commitment? When an employer issues an appointment letter mentioning the salary to be paid, it is nothing but a commitment to pay for the execution of certain work. What commitment do you have from your employer?

The chat messages are not formal communication. While giving the rulings under the provisions of the Indian Contract Act, 1872, sometimes even the oral promise was considered a contract, and the courts upheld the validity of it. However, there is no general rule, and the rulings differ from case to case. In your case, will your lawyer be able to make a forceful plea to prove that chat messages were nothing but a contract?

Thanks,

Dinesh Divekar

What I am suggesting as proof is not just the chat but the sequence of events. There was no mention of stock options in my employment contract. The options were given only after I resigned as a promise to keep me employed with the company. It was the earnest request from the company asking me to stay back that shows how they "enticed" me to stay when they needed me.

Why would they give stocks with a vesting schedule of 4 years? Once their need is over, they would let me go. The intentions were not honest to start with. Also, no cause or justification has been given by the company with respect to ending my employment. So the whole scenario is fishy.

Wouldn't you concur?

Thanks

Dear member,

I doubt your evidence has a sound footing. Please note that your employer is crafty, and treachery is in their blood. If you play the victim card, the employer could also turn the tables and allege in court that the employee had supplicated a lot to be released from employment. So, in fact, we were generous in forgoing our stocks and allowed him to go. Now he is litigating, and he did the treachery, not us!

Courtrooms are for making allegations and counter-allegations. Wading through the maze of allegations could exasperate you. So, if you are really contemplating litigation, then think a hundred times. Court cases drag on for years, or maybe even decades. If you win, you may not have the energy to enjoy the victory as it will be a pyrrhic victory. If you lose, then what will be your mental condition, that cannot be imagined.

Thanks,

Dinesh Divekar

Thanks for the response.

I am not sure what you mean by "supplicated to be released". I had submitted a resignation letter and then later withdrew it based on promises. So, I am a little confused here because I was the one who initiated the exit process last year. There is no proof that I begged to go. On the contrary, I have emails where I have told the company that I do not want to go.

If I litigate, my reason would be to let the prospective and current employees know the true colors of the company. Also, the company's name would be in newspapers for the wrong reasons. I can then let the lawsuit go cold. My intention is not to recover money.

Basically, I do not want anyone to be treated the way I was. The company also has to learn that.