June 26, 2011

∴ Skype Employment Contract: Maybe It's Time For a Guild

The news (Bloomberg) this week that several Skype executives were fired just before they could reap a benefit from their private shares says more about the state of employment in today’s technology industry than it does about Skype’s relative “evilness.” Companies are clearly doing their best to get the most out of employees for the least outlay. But who speaks for the employees, the engineers and designers and specialists who form the backbone of the industry?

No-one.

In Skype’s case, buried in their employment contract is language that allows the company to unilaterally retrieve stock shares already paid for by an employee, at the price the employee paid, if the employee is terminated for cause. In effect, the company gets a do-over, retroactively canceling the employee’s stock purchase. Whether or not the now-ex Skype executives were guilty of poor performance is another issue. The proximity of the Microsoft deal makes that explanation suspect. The fact that executives aren’t worker-bee engineers is irrelevant. Skype's other employees are under the same contract. And this kind of contractual language, now out in the open, will surely become more common. As Michael Arrington (TechCrunch) notes,

I bet that dozens of lawyers, venture capitalists and CEOs, now that they’re aware of this, are thinking “Hmmm, not a bad idea. We should do that.” And as long as they are crystal clear in their communications with new employees that these stock options, which are already a long shot, are likely to be extra-worthless, they’re probably in the clear legally.

I’m sure he’s right. (Click through for Arrington’s view on what’s really going on with those terminations.)

The trouble for technology employees, be they software engineers, UI designers, support specialists, hardware engineers, data center employees, or anyone else is, they have no say in the matter. They can take the contract with the job, or find employment elsewhere. That sort of arrangement is wrong, and it should not be allowed to spread.

There are occasional rumblings of union activity among tech workers. This commentary is from Wired five years ago. It mentions WashTech, a technology union based in Washington state, formed by Microsoft contract employees. They’re affiliated with the 700,000-strong Communications Workers of America (CWA), but how many workers do they represent? Why don’t more tech workers pursue representation?

Do engineers, designers and other tech workers eschew labor activity as a matter of pride? Do they believe labor unions are only the province of manual workers? That was my attitude early in my career. I’m a technology professional, I reasoned. I don’t need a union. My employer reinforced that feeling when it needed to staff up a new part of our organization, making promises it would later ignore. The court provided no remedy. Had I and my colleagues the benefit of a union writing those promises into a binding Collective Bargaining Agreement, we’d have reaped the benefits that were promised, back when our employer needed us to go the extra mile.

The Skype employment contract that allowed the company to unilaterally retain equity value that had been promised to, and paid for by, their employees is the sort of thing that a labor union can work to eliminate. With technology workers making an ever-increasing contribution to the economy, it’s time those workers had effective representation at a bargaining table.

Call it a guild, if the word “union” doesn’t fit. The Technology Guild.

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