OpenAI Tells Staff It Won't Claw Back Their Vested Equity

Republished By Plato

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OpenAI has told former and current staff that it won’t enforce nondisparagement agreements that could have cost employees dearly.

According to a report in Vox at the end of last week, the company used a very restrictive off-boarding agreement that, in effect, forbade former employees from criticizing OpenAI for the rest of their lives or face losing all the vested equity they earned during their time at the company.

According to Vox, “Even acknowledging that the NDA exists is a violation of it.”

While similar offboarding agreements are not unheard of in certain parts of the world, putting already-vested equity at risk is unusual. Employees could stand to lose millions of dollars.

The company has recently suffered a flurry of departures. One of the former staffers, Daniel Kokotajlo, mentioned a document that he had to sign when joining the company and noted he has remained under confidentiality obligations. He did not, however, take on any more obligations on his way out.

OpenAI CEO Sam Altman then took to X at the weekend to apologize for the furor and stated: “we have never clawed back anyone’s vested equity, nor will we do that if people do not sign a separation agreement (or don’t agree to a non-disparagement agreement). vested equity is vested equity, full stop.”

That’s not to say there weren’t clauses that could have given the company scope to wreak havoc on the finances of the existing employees. Altman admitted: “there was a provision about potential equity cancellation in our previous exit docs; although we never clawed anything back, it should never have been something we had in any documents or communication. this is on me and one of the few times i’ve been genuinely embarrassed running openai; i did not know this was happening and i should have.”

Although, according to leaked documents seen by Vox, Altman might have had a little more knowledge of what OpenAI had given itself permission to do. Or maybe he just asked ChatGPT to summarize the documentation.

The Register has asked OpenAI for comment and will update this piece should the company respond.

The furor failed to die down as this working week began.

But today, six days later, newswire Bloomberg reported that a message sent to former and current employees by OpenAI management confirms it has removed the penalty.

According to Bloomberg, the message read: “Regardless of whether you executed the agreement, we write to notify you that OpenAI has not canceled, and will not cancel, any vested units.”

So, while badmouthing a former employer might harm a worker’s future prospects, OpenAI has at least said that it won’t hit them in the vested equity should they say something horrid about the company and its technology.

Considering the recent spate of high-profile departures, this should make for an interesting summer. ®