Lessons from Sam Altman’s OpenAI Firing and Rehiring for Employees

From boardroom drama to employee dilemma

The recent termination and subsequent rehiring of Sam Altman as CEO of OpenAI presents a unique case study in exploring the complexities of firing decisions.

This scenario, marked by dramatic turns and intense internal dynamics, sheds light on their impact on employee morale, business operations, and legal considerations, especially under Canadian employment law.

Timeline of Sam Altman’s termination and rehiring

The chaos at OpenAI unfolded over five days:

• Nov. 17: OpenAI’s board of directors fires Altman, surprising many. The board alleges that he wasn’t always clear and honest in his conduct. The same day, Greg Brockman, the company’s president and co-founder, resigns — underscoring the decision’s impact on employee morale and organizational culture.
• Nov. 18: In an internal memo, COO Brad Lightcap clarifies that Altman’s firing wasn’t related to wrongdoing, financial issues, business, safety, or privacy. Instead, he said it stemmed from communication breakdowns between Altman and the board.
• Nov. 19: As Altman considers starting a new AI startup, Microsoft hires him and Brockman to lead a new research division.
• Nov. 20: Following the appointment of former Twitch CEO Emmett Shear as OpenAI’s head, 700 employees issue an open letter — threatening to resign if Altman isn’t reinstated.
• Nov 21: OpenAI and Altman agree on his return as CEO, alongside the establishment of a new board. This highlights the complexities and potentially reversible nature of terminations, especially in high-stakes corporate settings.

Sam Altman’s severance package

It’s unclear if Sam Altman received a severance package when he was initially fired from OpenAI.

Neither the company nor Altman have commented on this matter — leaving the details of any potential severance pay unknown.

This ambiguity is typical in high-profile corporate separations where details are often kept private or are subject to non-disclosure agreements.

Terminations in the United States

In the U.S., employment is typically “at-will” — meaning that employers can fire employees without needing to provide a specific reason, as long as it isn’t based on discrimination or retaliation.

At-will employment also means that the company isn’t required to provide a severance package to the employee.

However, some companies in the U.S. do choose to provide compensation when firing staff.

In those cases, severance pay is influenced by factors like company policy, the employee’s role and tenure, and specific circumstances surrounding the termination.

Severance pay in Canada

Canada’s employment laws are much more generous to non-unionized workers than the U.S.

Non-unionized employees in the country can get up to 24 months of severance pay when they are fired or laid off from their job without cause.

This includes individuals working full-time, part-time, and hourly in Ontario, Alberta, or B.C.

Even if you are fired for cause, it’s very likely that you are still entitled to full severance pay because employees often don’t meet the conditions necessary for this type of dismissal.

WATCH: Employment lawyer Lior Samfiru explains what rights employees have if they are being fired or let go on an episode of the Employment Law Show.

Regardless of a company’s grasp on employment law, they are legally required to provide proper compensation following a termination.

This concept applies during challenging economic conditions, downsizing, the closure of a business, or major public health events such as the COVID-19 pandemic.

Severance pay for executives

Severance packages for C-suite employees, such as Altman, can be complex due to the numerous factors that must be considered for compensation.

For Canadian executives, these severance pay factors can include:

• Salary
• Bonuses or incentive payments
• Stock options
• Profit-sharing
• Employee discounts
• Benefits
• Pension contributions
• Outplacement counselling
• Legal fees

Similar to other non-unionized employees, the scope of a C-suite employee’s severance package can be limited by the terms agreed upon in their employment agreement or offer.

Therefore, it’s advisable for all employees to have their contracts reviewed by an employment lawyer at Samfiru Tumarkin LLP before signing.

This step ensures they fully understand the implications for their future entitlements in the event they are terminated or lose their job.

Can you be rehired after being fired?

The short answer is yes. In Canada, non-unionized workers can be rehired by their employer shortly after being terminated from their job.

The decision to re-establish the employment relationship must be agreed upon by the company and employee.

In some cases, your employer might ask you to sign an employment contract detailing the renewed relationship, including aspects like your:

• Position at the company
• Salary
• Job duties
• Benefits
• Vacation time

This contract might also include a termination clause aimed at limiting the severance pay that you’re entitled to upon job loss.

One method of reducing severance pay can involve disregarding your previous years of service with the company.

Before you accept a new employment contract, have it reviewed thoroughly by an experienced employment lawyer at Samfiru Tumarkin LLP.

We will review the document to ensure that your rights are protected and your past seniority is recognized by the employer.

Repaying severance after being rehired

Before rehiring a non-unionized worker who was recently terminated, employers in Canada have the right to ask the individual to return the severance pay that they received.

This scenario requires careful evaluation of the new employment terms and the impact on the employee’s financial and professional situation.

Impact on employee morale

The termination of a high-profile leader like Altman can have a profound impact on employee morale.

Nearly all of OpenAI’s employees threatened to resign unless the board reinstated Altman — demonstrating the deep emotional and professional investment employees can have in their leadership.

This situation illustrates the importance of considering employee sentiment and the potential fallout that can occur from abrupt executive changes.

Decisions to terminate, especially at the executive level, shouldn’t be taken lightly. They must be based on a clear understanding of the potential impact on the business, including employee morale and public perception.

Lost your job? Talk to an employment lawyer

If you have been fired or let go for any reason, contact the experienced employment law team at Samfiru Tumarkin LLP. Our lawyers in Ontario, Alberta, and B.C. have successfully represented tens of thousands of non-unionized individuals.

In addition to severance package negotiations, we can assist you on a broad range of employment matters, including:

If you are a non-unionized employee who needs help with a workplace issue, contact us or call 1-855-821-5900 to get the advice you need and the compensation you deserve.