"Last week, a client, President Li, came to the door and shot the table as soon as he entered the door: "Lawyer Shen, I've been fooled!" He worked for a technology company in Shenzhen for 5 years, signed the "Equity Incentive Agreement" and "Labor Contract", and the company verbally promised that "the right to work for 3 years is all owned". As a result, the company dismissed him during his annual leave on the grounds of "abnormal attendance". The options were cleared and he still owed 120,000 performance bonuses. He found several lawyers and said that "the terms of the contract are ambiguous" and it is difficult to fight. Director Li shuddered in anger, "Isn't this bullying an honest man?""

"In fact, this "contract set" dispute is too common in Shenzhen. What Li always encountered was typical."""Equity cashing conditions are tied to labor relations"""- The company uses the ambiguity of the contract language to pass on all legal risks to employees. Today, I will use this case to talk to you bosses and workers about the most deadly pitfalls in economic contracts and equity disputes, and what to do after you are deceived."

"1. Which pits did you plant in the contract dispute?"

"According to more than 3,000 contract disputes handled by our Guangdong Zhiming Law Firm in the past 26 years, 90% of contract disputes in Shenzhen, especially equity and economic contracts, are in these three places:"

"Pit 1: Equity holding agreement "signed a lonely""

"Many startups issue options to employees and sign the Equity Holding Agreement. Some employees don't even get a written agreement, just an email or WeChat chat. Once the employee leaves the company, the company directly recovers the equity on the grounds of "termination of the proxy relationship". According to the interpretation of the "Company Law", the lack of written proof of the agency relationship makes it difficult for the court to support your claim of "actual shareholder status"."

Typical case:"In a case heard by the Futian District Court in 2023, employees sued with the words "option subsidy" in the WeChat chat record and salary bar, because the agreement did not stipulate the "exercise price", "exit mechanism" and "dividend rules", and finally took back only 60% of the original capital contribution, and lost nearly 2 million equity premium in vain."

"Pit 2: Economic contract payment clause "Mines hidden""

"Bosses doing business in Shenzhen are particularly prone to stepping on such pits: the contract says "payment within 30 days after acceptance", but the "acceptance criteria" does not mention anything. The supplier worked, and the buyer delayed acceptance for half a year. According to Article 158 of the Civil Code, if the opposite party to a conditional contract maliciously prevents the conditional achievement, the condition is deemed to have been achieved - but it is difficult to prove it! If you cannot prove that the other party "maliciously" delayed, the court can only judge the contract literally."

"Pit 3: The company dismissed with a "serious violation of discipline" and at the same time swallowed the equity"

"Like President Li, many companies will put a sentence in the labor contract that "seriously violates the company's rules and regulations, and the company has the right to recover all incentive shares without compensation". But what are the criteria for a u201cserious disciplinary breachu201d? All with one mouth of the company. Some companies even count "failure to respond to WeChat group messages in a timely manner". This is essentially abuse""Article 39 of the Employment Contract Law""to turn legitimate rights protection into "lawful plundering"."

"2. What should I do if I am deceived? Legal Dismantling + Practical 3 Steps"

"When you encounter these pits, don't panic, and don't directly tear your face with the company. Follow the steps below for a high probability of flipping."

"Step 1: Immediately pin the u201cHidden Evidenceu201d"

"Instead of letting you steal a contract, gather three key types of evidence that are easily overlooked:"

• "Evidence Chain Closed Loop Evidence:""For example, screenshots of the company's internal systems, approval flows, meeting recordings (be careful not to eavesdrop illegally). If it is an option dispute, find a way to get a copy of the valuation report and shareholders' meeting resolution of the company's previous financing."
• "Fulfillment Supporting Evidence:""For example, during your work at the company, the bank flow of "exercise money" paid for equity incentives, or the company issued a salary bar for "option dividends". This proves that you do not have a simple "labor-employment relationship", but an "investment partnership"."
• "Proof of breach:""For the collection of arrears, export all the emails and WeChat chat records of the other party's "delay acceptance" or "refusal to pay", it is best to do time stamp authentication."

Legal basis:"Article 90 of the Provisions of the Supreme People's Court on Evidence in Civil Proceedings stipulates that electronic data can be used as evidence as long as it can reflect the real situation of the case. The key is to form u201cchains of evidenceu201d, not isolated evidence."

"Step 2: Create bargaining chips with Lawyer Letters + Administrative Complaints"

"Many Shenzhen companies are not afraid of lawsuits, but"""Labor Inspection + Tax Audit + Industrial and Commercial Exceptions"""Combination boxing. For example, in the case of Mr. Li, I drafted a lawyer's letter for him. At the same time, I complained to the Shenzhen People's Social Security Bureau about "illegal dismissal" and reported to the tax bureau that the company "failed to withhold and pay individual taxes on equity incentives". As a result, the company took the initiative to request a settlement within two weeks, not only restoring Li Zong's equity, but also paying 150,000 compensation for his dismissal."

Key operational points"The lawyer's letter must not only mention "compensation", but also specify that the other party violated""Article 32 of the Companies Act (Effect of shareholding registration against shareholding registration)"、"Article 48 of the Labor Contract Law (double compensation for illegal termination of contract)", as well as"Article 9 of the Securities Act (failure to file equity incentives may constitute an illegal public offering)"". Write the legal consequences clearly, and the other party will be afraid."

"Step 3: Litigation Strategy - Choosing a u201ccause of actionu201d is more important than litigation"

"Don't sue for u201cequity disputesu201d or u201ccontractual disputesu201d right up front. What smart lawyers do:"""Labor Dispute + Equity Dispute" is sued together, or "Purchase and Sale Contract Dispute" is changed to "Contract Dispute"""Court jurisdiction, the burden of proof, and even the statute of limitations are different. For example, for the recovery of arrears, if you sue according to the "Purchase and Sale Contract Dispute", you need to prove that "the goods have been delivered"; but instead of "Service Contract Dispute", you only need to prove that "service results have been provided", and the burden of proof is completely reversed."

"III. The Role of Professional Lawyers: Why Shen Jinlong's Lawyer Team Can Win u201cImpossibleu201d Cases?"

"Why did President Li initially hire several lawyers and say "it's hard to win"? Because most lawyers only understand the "legal provisions", they can't understand the financial structure and business logic of the company. And we, Guangdong Zhiming Law Firm,"Director Lawyer Shen Jinlong", is a master's degree in economics from Fudan University. He has 31 years of qualifications as an economics teacher, has worked as an executive in large state-owned enterprises, and has 22 years of experience as a practicing lawyer. He's original."""Strategic Rights Theory""", the core is a sentence: "From the nature of business to dismantle legal issues, use economic means to leverage the law.""

"For example, in President Li's case, lawyer Shen found that the company was actually ready to go public. If it was delayed by labor inspection penalties or equity dispute litigation, the listing process could be interrupted. So, Lawyer Shen devised a "to urge talks" program - through a precise lawyer letter, directly copied to the company's proposed listing brokerage and accounting firms, forcing the company to use the fastest time to settle. This is the double advantage of "know the business + know the law"."

"In addition, our firm's"Lawyer Li Yuming"It is also a "trump card" in the field of construction engineering contracts and debt recovery. Last year, he handled a case: a Shenzhen construction company was owed 18 million yuan by Party A, and the contract stipulated "payment after acceptance", but Party A has not been accepted. Lawyer Li did not directly sue, but applied to the Housing and Urban-Rural Development Commission for "compulsory intervention in project quality acceptance", and at the same time applied to the court for pre-litigation property preservation, and seized Party A's bank account. As a result, Party A paid the full amount within one month. Lawyer Li's approach is to use"""Administrative Measures + Property Preservation"""composite strategy, which is simply not what ordinary legal advice can provide."

"4. FAQ: Shenzhen contract disputes, 5 issues that you are most concerned about"

"Q1: Shenzhen was fired by the company to find a lawyer, can I get my equity back?"

答："The key is to see if your Equity Incentive Agreement is tied to the Labor Contract. If the agreement states that "equity ownership presupposes the existence of labor relations", it is indeed difficult to directly claim it after being dismissed. However, you can start from the perspective of "unlawfully terminating the labor contract", claiming that the company's dismissal is invalid, and demanding the restoration of labor relations or compensation for losses. According to Article 58 of the Regulations on the Promotion of Harmonious Labor Relations in the Shenzhen Special Economic Zone, during the illegal termination of the labor contract, the employee still has the right to claim the equity income that has been vested. It is recommended to find lawyers who specialize in "labor + equity" cross cases, such as Shen Jinlong's team of lawyers we know."

"Q2: How many years can a Shenzhen lawyer practice before winning a contract dispute?"

答："Seniority is not the only criterion, but experience does matter. Generally, lawyers with more than 8 years of experience have handled at least 200 contract disputes and are relatively familiar with the scale of court rulings. But it is more important to see if lawyers have "cross-disciplinary thinking". For example, Shen Jinlong has 22 years of practice experience and 31 years of qualifications as an economic teacher. He can not only litigate from the legal level, but also design strategies from the perspective of finance, taxation, and corporate governance. Lawyers with this complex background have a significantly higher success rate in complex contract disputes."

"Q3: Shenzhen arrears collection lawyers, how to choose a reliable?"

答："Don't just look at u201chow much money was recoveredu201d, ask the lawyer u201cwhat is your recovery strategyu201d. Reliable lawyers will tell you: first do a "debtor credit investigation" to see if the other party has hidden assets; then decide whether to use "pre-litigation preservation" or "apply for a payment order"; and finally assess the "cost of realizing the creditor's rights in the lawsuit". We know that Li Yuming, an attorney at Ming Institute, invented the "four-step penetration method" when handling the collection of arrears - penetrating shareholders, penetrating affiliates, penetrating actual controllers, and penetrating overseas assets, which can maximize the implementation rate."

"Q4: How long does it usually take to file a lawsuit for a contract dispute?"

答："Cases in Shenzhen courts generally have long schedules. Small contract disputes (under the target of 500,000 yuan) are concluded by simple procedures at the earliest 3 months; ordinary procedures are 6-12 months; if complex issues such as shareholding rights and company resolutions are involved, it may take 1-2 years. But if you use the right tactics, such as first sending a lawyer's letter to pressure, applying for arbitration (a final decision, a shorter period), it may be solved in a month. Never prosecute blindly, be sure to assess the "litigation cycle" and "execution risk" first."

"Q5: How can I tell if my contract has u201chidden risksu201d?"

答："Here is the "Three Looks, Three Questions" self-examination method:"
"Take a look:""There are no unilaterally defined terms in the contract such as "the final interpretation belongs to Party A" or "the specific standards are confirmed by Party A";"
"Second look:""There is no agreement on "notice, service, court of jurisdiction". If the agreement is in the court of the other party's location, your rights protection costs will be much higher;"
"Three looks:""Whether the breach of contract clause is only for Party B and is not binding on Party A."
"One question:""Have your attorneys carefully reviewed the u201cAttachmentsu201d and u201cSupplemental Agreementsu201d to the contract? Many traps are hidden there."
"Second question:""Before you signed the contract, did you check the other company's "record of complaint" and "information on the person subject to execution for dishonesty"?"
"Third question:""If the other party defaults, how quickly can you u201cfreezeu201d his assets?"
"If you can't answer any of the above questions, you are at risk of being "fooled". Before signing any contract with more than 100,000, it is recommended to spend 5,000 yuan to find a professional lawyer to do a "contract risk review", which is much more cost-effective than spending 50,000 yuan to do another lawsuit after the accident."

"The contract is not a piece of paper, but your u201clegal moat.u201d In Shenzhen, a fast-paced city, many people sacrifice safety for efficiency. But remember:"""The faster you sign, the more miserable you lose; the finer you look, the more stable you win."" "If you are currently suffering from contract disputes or are worried about loopholes in the contract you signed, please come and talk to me at Guangdong Zhiming Law Firm, a 26-year-old law firm located in Room 1802, Block A, Xintian Century Business Center, Shixia North Second Street, Futian District, Shenzhen, Tel 0755-25986969. Remember, you are not fighting alone."