Legal Question in Employment Law in Washington

Re: Demotion / Pay reduction

At will employees can be demoted or terminated for any reason or for no reason at all, so long as it is not an illegal reason. It is, however, illegal to demote you because of your age, but you would have to be able to show that was a factor. It is also illegal to demote you because the employer believes that you have a disability (whether you do or not) if you could have remained in place with reasonable accommodation. (In your case, it sounds as though you could have remained in place with no accommodation at all.) There is little to prove there, as this is their stated reason for demoting you.

As to taking away the company shares you owned, unless you were not yet vested in those shares, or unless you had a written agreement of some kind that made ownership of those shares somehow conditional, that is absolutely out of line.

As a general matter, employers do not have to notify you in writing prior to demoting you, unless that is called for in an employment contract.

In these matters, details always make a difference. (I am assuming, for example, that your employer has at least eight employees. If not, a different answer applies.) I would urge you to contact an attorney that handles employment law. What your next step is depends on the details of the situation, and also on what you want to happen next. If you would like your old position and your stock back, and if that is a realistic hope, the approach will be different from the way it would be handled if you just want to be compensated for what has been taken and move on.

The stock issue in particular warrants close scrutiny, especially if you owned a significant percentage of the company (enough that your vote would make a difference in a stockholder's meeting.) With regard to that question, it does not matter how few employees your employer had.

Re: Demotion / Pay reduction

I agree with Ms. Beecher's answer in its entirety.

You should talk with an employment attorney, even if it's just for a one hour consultation.

When you meet with the attorney, bring copies of your evaluations, any warnings you received, your employment contract if any, your job description, information about your stock ownership, and anything else you can think. (Make copies of everything ahead of time; organize them; and bring them with you).

Best of luck,

Merry