What Are RSUs (Restricted Stock Units)?
Restricted Stock Units (RSUs) are company shares granted to employees as part of their compensation. These shares typically vest over time, meaning the employee must stay with the company for a certain period—or meet specific goals—before the shares become theirs.
RSUs are widely used by companies in France and globally to align employee performance with company growth. They’re attractive because they offer long-term value without an immediate cash outlay.
💡 Think of RSUs as a “stay bonus”: the longer you stay, the more you stand to gain
Can You Lose RSUs If You’re Terminated?
Good news: French labor law may entitle you to compensation.
In France, unvested RSUs can be considered a “loss of opportunity”, and employees may be compensated if the dismissal is found to be unfair.
Key Ruling:
In a 2018 French Supreme Court decision (Labor Chamber, Feb 7, 2018, No. 16-11.635), the court confirmed that unvested RSUs can result in damages for employees wrongfully terminated.
RSU Plan Conditions Can’t Override Employee Rights
Many RSU agreements include a “presence condition,” which states that employees must be actively employed on a certain date to receive their shares.
However, courts have ruled that this condition can’t be enforced if the termination was unjustified.
🧑⚖️ Example:
In a 2025 decision (Court of Appeal of Versailles, Labor Chamber 4-3, March 31, 2025, No. 22/01917), the RSU plan denied payment if the contract was terminated before vesting. But the court held that the employee deserved compensation for the lost opportunity because the dismissal lacked valid cause.
How Courts Evaluate “Loss of Opportunity” in RSU Disputes
To determine whether compensation is owed for unvested RSUs, courts assess:
Likelihood of Continued Employment:
- Strong employment record and tenure
- Industry turnover rates
- No signs of resignation
- Residence close to the workplace
- Competitive compensation
- Job market conditions (e.g., economic downturn)
🧠 Example: An employee fired in June 2025 may be judged to have had a 90% chance of RSU vesting in 2026 and 80% in 2027.
Calculating the Value of Lost RSUs
1. Adjusting for Stock Splits:
When a company undergoes a stock split, the share count changes but total value remains the same. Courts account for this to avoid misleading valuations.
🎯 Example: A 3-for-1 split changes a €1,500 share into three €500 shares.
- Though the price per share changes, the total value remains the same.
- Multiply the new share price by the split factor to maintain valuation consistency.
This principle was upheld in a 2024 Tesla RSU case (Versailles Court of Appeal, Dec 16, 2024, No. 22/02096), which confirmed that both the 2020 5-for-1 and 2022 3-for-1 stock splits must be reflected in compensation calculations.
2. Share Price at Vesting:
- Average Share Price: Used in settlements to reduce volatility
- Market Price at Date of Vesting: Often used during litigation
Each RSU vesting period must be valued individually, based on expected share price and probability of vesting.
What If You’re Unfairly Dismissed?
Don’t assume your unvested RSUs are lost. If your dismissal is deemed unfair under French labor law, you may be entitled to compensation based on:
- The likelihood you would have stayed until RSU vesting
- The value of the shares at vesting
- Any plan restrictions that were unjustly enforced
Legal Support Makes a Difference
📌 Tip: If you’re facing unfair dismissal and hold unvested RSUs, consult an employment lawyer experienced in RSU disputes.
They can:
- Help assess the value of lost RSUs
- Challenge RSU plan clauses in court
- Prepare for labor tribunal proceedings
Final Thoughts
RSUs can be a valuable part of your compensation—but they’re not guaranteed if you’re dismissed. Fortunately, French courts recognize that employees deserve fair treatment, especially when equity is on the line.