In addition to a regular paycheck, an employer might use several incentives to attract and keep talented individuals in its workforce. A popular method of compensating employees for their hard work is to give stock options in the employer’s business. Because it is not a traditional form of pay, employee stock disputes may arise after job terminations. Resolving stock disputes with an employer can be incredibly challenging and is best left to a legal professional.
If you are contemplating quitting or you have just separated from your job, and you want to know your right to employer stock options, gather your employment and stock option agreements and speak to a skilled employment attorney immediately. At the Smithey Law Group, our attorneys are leaders in the employment law community and are ready to help ensure that you receive all compensation and benefits you are due in an employment dispute.
What Are an Employee’s Post-Termination Rights?
If an employee separates from their work, the Maryland Wage Payment and Collection Law requires the employer to pay the employee all wages due by what would have been the employee’s next regular pay date. Wages are not only your hourly pay or monthly salary. Maryland law defines “wages” as all compensation due to an employee for employment, including:
- Fringe benefits,
- Overtime pay, and
- Any other remuneration promised for service.
Depending on the circumstances, stock options constitute wages, and when they do, a terminated employee must be allowed to exercise all options they have earned.
When Are Stock Options Wages?
Stock options are wages if they are promised to an employee as compensation for their work and if they have vested. And when do stock options vest? As noted in the Court of Appeals of Maryland case Catalyst Health Solutions, Inc. v. Magill, stock options vest whenever an employee fulfills the terms of the stock option agreement they have with their employer.
For stock options to vest, an employee might have to do the following:
- Work for the employer for a specific amount of time,
- Complete a particular project for the employer,
- Earn a certain amount of money for the employer, or
- Satisfy any other terms of their agreement with their employer.
Your right to stock options can come from a written or oral agreement. If you are confronting employee stock issues after a termination, contact an experienced employment attorney who can help ensure you receive all wages and options that are due.
How to Enforce Your Right to Stock Options
The first step to enforcing your right to vested stock options and other earned wages is to consult with an attorney. While you can assert your rights on your own, an attorney can increase your chances of success and maximize your recovery. Also, your employer will likely have its own attorney to defend it against your claims, so it is paramount that you have good counsel in your corner.
With an attorney’s help, you can enforce your rights and recoup your compensation using the following actions:
- Sending written notification to your employer about its obligation to provide the vested stock options (this can expedite further legal action that you might need, and it should be sent certified with a return receipt requested);
- Filing a wage complaint with the Maryland Department of Labor;
- Filing a civil lawsuit; and
- Filing criminal charges when an employer deliberately fails to pay earned compensation after a termination.
It’s best to resolve employee stock issues after termination amicably, but sometimes more serious legal action needs to be taken. Whether you are seeking an amicable resolution or resolution through litigation, having a legal advocate by your side is crucial.
Watch Out for Arbitration Agreements
In a stock option agreement or other employment agreement, your employer might have included a binding arbitration clause. Arbitration is a way for parties to resolve a disagreement outside of court. In their agreements, many businesses and employers make binding arbitration the exclusive form of dispute resolution available because it is more private and more favorable to their interests. Some employers take unfair advantage of arbitration clauses and practices, so it is crucial that you have an attorney review your employment-related agreements and represent you in any arbitration proceedings.
Deadline for Filing a Complaint
To enforce your entitlement to stock options, you must file your complaint or lawsuit before the applicable statute of limitations runs. The amount of time you have to file your legal action will depend on what type of action you initiate, but you should file your action as soon as possible, regardless of the type of action it is.
The statutes of limitations for wage complaints are as follows:
- For a lawsuit for unpaid wages – three years;
- For a wage complaint with the Maryland Department of Labor – two years; and
- For a lawsuit for breach of contract – three years.
If you have a complaint, consult with a skilled attorney immediately so they can determine the best course of action for your dispute and timely file your claim.
Contact Smithey Law Group for Help
If you have not received the benefits you were promised in exchange for your work, a skilled advocate can hold your employer accountable and recover your pay. At Smithey Law Group, our skilled and experienced attorneys focus exclusively on solving labor and employment disputes for individuals in Maryland. We are award-winning leaders in the employment law community who write books that teach other professionals about labor and employment laws. We have been featured by international media outlets, and we are sought after to speak at employment law events across the country.
You deserve to enjoy the fruits of your labor, and you deserve a good advocate. We are here for you if you need help. You can reach out to us online or call us at 410-881-8572 to schedule a consultation.