Having a Baby and Other Good Reasons to Resign
In the Slicing Pie model having a baby is considered “good reason” to quit and, therefore, the quitter gets to keep her slices in the Pie (subject to dilution when more slices are added by others). This may cause some controversy, so it’s important to understand what good reason means in the context of Slicing Pie and being fair.
Good reason (aka “for cause” or “good leaver”) implies that something outside of a person’s control created an untenable situation at work. The most common circumstance is when the company’s managers make promises that they fail to keep. For instance:
- You were hired as VP of Marketing, but they want you to flip burgers instead
- The company is based in Chicago, but wants to relocate to Seattle
- You were promised a cash salary in six months, but it didn’t happen
- You’re a commissioned salesperson, but the product does not work
The person affected by these situations did not cause them and, therefore, cannot be expected to continue working. It would not be fair to remove their slices from the Pie or otherwise impose penalties. By allowing individuals to keep their slices in the Pie, Slicing Pie logic provides protection from the behaviors of others. Startup founders are notorious for making big promises—a practice that can easily mislead participants. The resignation for good reason logic forces managers to think twice before committing to unknowable future events.
Conversely, resignation without good reason means a person quits for personal reasons outside the influence of the company and its managers. For example:
- She wants to take another job for more money
- He can’t afford to work without pay anymore
- She doesn’t believe in the company’s vision
- He doesn’t like his coworkers
If a person resigns for no good reason, he or she will lose slices from non-cash contributions and lose the multiplier for cash contributions. Furthermore, the company reserves the options of paying back cash prior to any distribution of profits or proceeds of a sale. This is a painful way to leave a company, and it should be! This forces employees and other participants to think twice before quitting.
Now, let’s get back to that cute little baby…
Having a baby seems to break the rules because not having a baby was never promised by company managers and, (politics aside) having a baby is technically a choice. However, in most cultures I have come across, having a baby is considered a very, very important decision and one that is essential for survival of the human race. It also creates loads of new customers so it’s generally a good investment of time and resources. In many societies, having a baby is a legally protected right and terminating someone for having a baby is illegal and immoral. At its core, Slicing Pie is a moral agreement to do right by those who help a company succeed and, hence, having a baby is considered resignation with good cause.
Ideally, a good team member would return to work once she (or he) has settled into a routine with the little bundle of joy. And, while larger companies may be required to offer paid or unpaid leave to new parents, startups are sometimes exempt. Having a policy in place can help avoid potential conflicts. Click here to download a sample Pie Policy manual.
Some Bad Things That Provide Good Reason
Babies aren’t the only circumstance that provides good reason for a person’s resignation. As inconvenient as it may be, dying is a good reason to resign and the person’s slices would stay in the Pie. When the Pie bakes, the person’s designated heirs would receive the equity. Again, while it may not be the company’s fault a person dies, it would be immoral to impose a penalty for dying. The same goes for permanent disability.
The Slicing Pie model always follows the logic of fairness within a moral context of most cultures. When bad things happen to good people, companies need to make the right actions to support them and their families.