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Stock Options and Employment Discrimination Law

A cutting-edge issue in employment discrimination law is the effect – on a plaintiff’s legal claims and remedies – of stock options that form part of an employee’s compensation package. Stock options (“call options”) allow an employee to buy the employer’s stock at a specified future date at a price (the “strike price”) fixed on the date that the stock is granted. Stock options are granted with the expectation that the stock will increase in price during the intervening period, thus allowing the grantee the right to buy the stock significantly below its market price. Traditionally the preserve of corporate executives, stock options are now becoming more widely available to employees throughout a corporation, and may be given as a long-term bonus or incentive, often not vesting for several years into the future.