Publication -  פרסומים

Special Status of Hi-Tech Employees

October 19, 2015

In Eliram Haklay v Armoney Holdings LTD the District Labor Court of Tel Aviv pointed out the different approach to ruling in a case of an employment agreement between high-tech employees and their employer.

The lawsuit involved two brothers (the plaintiffs) who were employed as senior members of the defendant’s development team (one of the plaintiffs served as the CTO and the other was VP Products).

In dismissing most of the lawsuit, the court emphasized the non-traditional bargaining power of hi-tech employees such as the plaintiffs. The court noted that unlike the traditional employment relationship where the employer is deemed to be significantly stronger than the individual employee, in the high-tech sector it seems that the relationship between the parties is not the same.  The balance of powers might even up and bring the parties to the same level.

Accordingly the court found that the plaintiffs were fully aware of the terms of the employment agreement, which resulted from equal bargaining positions, and therefor the court fully approved the terms of the agreement, and the salary reduction to which the plaintiffs agreed when the company faced a financial crisis. The court further held that minimum one-year vesting period prior to the vesting of any stock options, is a valid clause.

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