Why choosing a job is like picking a stock and what employees should look for in a company.
Below is an internal memo I sent to employees at Carta changing how we handle employee departures. The TLDR is:
- We no longer use the word “termination” or “firing.” We refer to leaving employees as “departures.” There are two kinds of departures: “Company initiated departures” and “employee initiated departures.”
- We call severance “departure pay,” and we pay everyone who leaves Carta the same amount whether their departure is company initiated or employee initiated.
- We no longer ask departing employees to sign legal paperwork at departure. They can leave and receive full departure pay without having to sign anything.
The full memo is below:
Date: November 13th 2019
To: All Carta Employees
Memo: Changes to policy around employee departures
Over the last few weeks I’ve been thinking a lot about culture at Carta. Through this process, I’m making a few internal changes that I think will help Carta be more fair to our employees when they leave the company.
As an industry, I think some of the norms that we’ve converged on are unfair. I don’t think that anyone is a bad person for having engaging in these standard practices. We did it too. But just because everyone does it doesn’t make it right. So we’re changing some things at Carta.
Carta is fundamentally a fairness company. I hope that our products bring fairness and transparency to our financial institutions. I also hope that Carta as an organization can help move the world toward more fair employment and equity practices.
Next Chapter Program
Last week you may have seen on Twitter that I spoke at a conference about culture and company building. One of the topics I spoke about was changing how we treat departing employees.
Much like offer letters (prior to Better Offer Letter) were written for the benefit of the company and not the employee, severance pay and agreements were written for the benefit of the company and not the person. It has bothered me for a long time that we pay severance to someone who has been at Carta for four months and leaving for performance reasons, but we don’t pay severance to someone who has done great things for Carta for many years and is leaving on their own volition to pursue the next stage of their life journey. It isn’t fair.
It has also bothered me that when we ask someone to leave we withhold their severance pay unless they agree to sign our legal paperwork. It is a form of corporate bullying that preys on the young and financially insecure.
Just because it is standard practice for companies to offer severance only to terminated employees and require they sign legal paperwork to receive it doesn’t mean it is ok. So we are stopping these practices.
Here are the details of what we are doing:
First, we will no longer use the words “termination” or “firings.” All departures from now on will be called “Employee Initiated Departures” or “Company Initiated Departures”. If we are discussing a process for letting an employee go we will refer to it as “initiating a departure” or “having a departure conversation.”
For employees that initiate their own departure, they should feel like the can talk to us about their plans months before their departure. We should not be surprised. I want a culture where employees can tell us their dreams, including after Carta, and we support them doing it.
In our departure interviews, we will not require employees to sign legal documents. It is wrong that companies walk an employee into a room with an HR representative and corporate lawyer, tell them they have lost their livelihood, and push them to sign legal paperwork that they haven’t read and don’t have their own legal representation for. It is shocking that this is the norm.
Carta departure interviews will assume trust and the best of intentions with the singular goal of helping the employee launch their next chapter.
Next Chapter Center
I hope that Carta will be remembered for two things. First, for creating a fairer world. Second, for producing the next generation of leaders who go on to do greater things than we did at Carta.
To that end, we are creating the Next Chapter Program at Carta. In this program we will help employees think about their careers and plan their next steps, whether at Carta or otherwise. Think of this as a career center like you would find at a university or business school. But better. The Carta employees and alumni network, if activated, can be incredibly powerful for finding and creating opportunities for all Cartans after they leave Carta. And as an organization we have lots of relationships with investors, incubators, bootcamps, other companies, etc… that we can leverage for Cartans. I can’t wait to build this. It is going to be dope.
Next Chapter Pay
Lastly, all departures, whether employee initiated or company initiated, will receive payment commensurate with tenure. This payment will be called Next Chapter Pay, not severance. Tenure of 0-1 years will receive one month’s worth of Next Chapter Pay, 1-2 years will receive two months’, and 2+ years will receive three months’. Next Chapter Pay will not distinguish between employee initiated and Carta initiated departures.
We are hoping we can get our Next Chapter Program up and running in Q1. Thank you to the People Team, Legal and Compliance, and the many others who are working to make this happen.
Feel free to ask me questions in the thread or at townhall.
DISCLOSURE: This communication is on behalf of eShares Inc., d/b/a Carta, Inc. (“Carta”). This communication is not to be construed as legal, financial or tax advice and is for informational purposes only. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Carta does not assume any liability for reliance on the information provided herein.
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