Employers will frequently offer employees stock options or stock option plans (ESOPs) as an incentive to work for the employer. Normally, the way stock options work is that after an employee works at the company for a certain amount of time, the employer will sell shares of the company's stock to that employee for less than the market value of the stock. The employee can then sell the shares of stock on the market for more than the employee purchased them or retain the shares and their dividends, thereby making money off of the shares.
Sometimes, stock options can be a curse instead of an incentive. In many instances, employees have purchased stock options only to find that the actual value the company's stock has fallen below the price they purchased them for, and may even become worthless if the company goes under.
An employee that has lost significant amounts of money because their stock options became worthless may have a legal recourse against the employer, especially if the employer knowingly gave the employee false hopes of becoming rich. Ask yourself these questions when determining if your employer may have put you into an unjust situation:
If you think that you lost money because your company misled you about its stock options plan, you may wish to consult an experienced employment law attorney or employee stock option attorney. Wrongful cancellation of employee stock options, breach of an employee stock option agreement, or wrongful termination of employee stock options are often sufficient grounds for legal action. An employment law lawyer or employee stock option lawyer can advise you of your rights and help you determine if you are entitled to compensation for your lost investment through employee stock option litigation.
Last Modified: 03-04-2018 10:00 PM PSTLaw Library Disclaimer
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