Stock Forfeiture Case Now Before Supreme Court

In the March 2008 issue of CWHA,
we reported that a California appeals court upheld an employee
stock purchase plan that provided for the forfeiture of stock if the employee
terminated before two years from the date the stock was acquired. Even though
the stock was bought using employee compensation, the appeals court ruled that
the provision didn’t violate Labor Code rules barring forfeiture of unpaid
wages.1 Now,
the California Supreme Court has agreed to review the case, which means the
appeals court decision is no longer good law. We’ll keep you posted.