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Being recruited away

I currently work in a small software consulting company (call it ABC). I'm fairly unhappy with it (and have been for a while) for professional reasons (projects, dev process, company buying things that they need to buy, etc.), but I have been disinclined to move unless a really good offer comes up. A company (XYZ) we have body-shopped for is interested in hiring me. The package is very good (about twice my current salary, plus better fringe benefits overall). The environment is much better (dev process, etc.) and I have seen it myself since when I was body-shopped I was basically like one of their own employees.

The question isn't should I take it. The question is more this. XYZ hiring mgr claims that XYZ has a non-recruit clause with ABC (my company) which prevents them from recruiting me away (for 12 months) *unless* ABC agrees to break the non-recruit. In that case, XYZ would essentially pay them a recruiting fee. The catch is that I have to tell my company that I want to leave and that XYZ wishes to hire me first (so they can start the dicker). If ABC refuses to dicker, I'm in a job where they know I want to leave. Is this kind of thing standard? I.e. XYZ isn't blowing smoke or something? It seems reasonable and likely to be true, but I wanted some other opinions. XYZ mgr seems to think that they will just dicker and XYZ can hire me.

Note that even if my company counter-offers, I wouldn't accept (it is very unlikely they can match the dollar figure but more importantly they can't/won't fix the problems I see in the company).

I lurk a lot here and plenty of you seem to have your heads screwed on tight. If anyone has some pointers on this kind of situation -- web pages, resources. And I might consult a lawyer...

scared but interested
Tuesday, February 17, 2004

One note: my company does not have any non-compete clauses in our employment agreement. I.e. none of that "you can't work for any of our competitors for 6/12 months after you leave us" clauses. This contract clause is apparently between ABC and XYZ as part of the subcontracting / body-shopping.

scared but interested
Tuesday, February 17, 2004

Tell us about your relationship with your current boss. Is he sympathetic to the unfortunate fact that ABC underpays you and has poor support for tools, etc - does he have your interests in mind? Or is he a slave driver? Or ?

Dennis Atkins
Tuesday, February 17, 2004

My immediate boss is very sympathetic. He has basically said in the past that if I get a better offer somewhere, etc. I should take it -- i.e. you have to do what is best for oneself. He definitely understands a lot of the concerns (and agrees with them), but he seems eternally optimistic that the company can get better. There is a big push right now to improve things, but I've been with the company over two years and these problems have always existed.

Note that I wouldn't say ABC underpays me severely, but I can definitely get better and this offer is much better.

scared but interested
Tuesday, February 17, 2004

Ok, well it's not really a problem. Tell your boss you'd like to discuss something important with him at lunch and go to a restaurant you both like. Explain how much you've enjoyed working there and how much you've learned and so forth and that you've always appreciated his giving you as much support as was possible under the circumstances. Tell him that you've recieved a fantastic offer at twice your salary working on some cutitng edge tech and so forth and that you'd appreciate his helping you out with it because its at XYZ and its necessary that you be let go with his blessings and good wishes. He'll agree and run interferenece for you with upper management and all will be great.

Dennis Atkins
Tuesday, February 17, 2004

I think the fear is rattling my brain: forgot one detail.

While my immediate boss is quite sympathetic, the owners of the company are a bit controlling sometimes. To some degree I *fear* the president. Not sure if that's because he's the top boss or because he really is scary. :)

scared but interested
Tuesday, February 17, 2004

But have you (anyone else hear tonight?) heard about the part where XYZ may have to (essentially in my view) pay off ABC? Is this a normal thing in company contracts like this? I'm not too worried about my immediate boss being upset -- he'll be upset because he's losing a "valuable team member" but he'll be happy for me at a personal level. I'm more afraid of the upper echelon not wanting to let go...

scared but interested
Tuesday, February 17, 2004

If the owners of your current company were to, say, die of mysterious causes... all your problems would be solved.

Mr. Fancypants
Tuesday, February 17, 2004

Have the guy from XYZ ask ABC if ABC would be willing to let XYZ hire you away.  There is no reason for ABC to even know that XYZ talked to you.  Just tell XYZ not to mention the conversation between you and XYZ.  After ABC and XYZ talk, have XYZ report back to you on how the conversation went.  If XYZ says ABC wouldn't go for it, then you will still have your job, and you shouldn't have to worry about repurcussions, because ABC will never know that you were considering going to XYZ. 

Chris
Tuesday, February 17, 2004

That seems to be part of the problem -- it seems I really need to declare my intent first before XYZ can start negotiating....this is very confusing to me, if you can't tell, and I really just don't know. :(

scared but interested
Tuesday, February 17, 2004

Why do you need to declare your intent, first?  Why can't the conversation go like this:

XYZ:  "I'd like to hire away scared."
ABC:  "Well, we like him, so you'll have to wait 12 months like the contract says."

or

XYZ: "I'd like to hire away scared."
ABC: "OK.  But we'll need some compensation if you want to hire him within 12 months of him resigning."
XYZ: "OK, how much?"
ABC:  "xxxxx"
XYZ: "OK. sounds reasonable.  So, it's OK if I go ahead and talk to scared about this, then?"
ABC: "Sure."

It seems like an easy straight-forward conversation to me.

Chris
Tuesday, February 17, 2004

I don't think it requires me to resign or anything for this clause to have effect -- this is a contract between ABC and XYZ basically forbidding XYZ from recruiting (as I understand it). It would be easier if XYZ just broached the subject, but I'm not sure why they can't -- I might have to talk to them about it.

scared but interested
Tuesday, February 17, 2004

It's a standard thing in recruiter contracts and it's invoked often. If the end employer wants to hire you, they have to pay a fee to the recruiter.

It's got nothing to do with you ( which is wrong, but that's the way recruiters / body shops rig things.)

The end employer is wrong in telling you that you must take the initiative. It is the end employer who must tell the body shop that they wish to hire you and pay the conversion fee.

Inside Job
Tuesday, February 17, 2004

To answer this question:
"But have you (anyone else hear tonight?) heard about the part where XYZ may have to (essentially in my view) pay off ABC? Is this a normal thing in company contracts like this?"

Yes, this is normal - I have heard of this in 2 separate companies where I worked although I'm not in a management position and have not seen any of the actual contracts or legal agreements. In the most recent case, I was told directly by my manager of these agreements that prevented us from hiring the contractors that were working for us at the time without paying a fee. At a previous company, the group that I worked in did hire a contractor as a permanent employee - my understanding (second-hand) is that my employer was required to pay the contracting company the equivalent of 6 months' fees (not the full salary, but the agency's percentage commission) to the contracting company - this was all very open between the company and the contracting agency. The company considered that the cost wasn't much different from the fees paid to headhunters to find an employee, plus they were getting a known hire who had already worked for them for some time. This was several years ago, and I'm sure the details vary by company.

Philip Dickerson
Wednesday, February 18, 2004

(BTW, thanks for answers/comments so far from everyone!)

XYZ mgr did say that the fee they pay ends up being similar to regular recruiting fees (so it's reassuring that some else's experience jives).

I'm trying to research this (i.e. google) but most of the stuff that comes up is actually regular employee non-compete / non-recruit clauses...

scared but interested
Wednesday, February 18, 2004

These sort of non-competes/non-recruits are pretty common. They are almost always included in non-disclosure agreements. For small companies looking to get started, the non-recruit agreements help them keep key people from getting scalped, but if the company goes belly up, it also prevents the employees from joining up with the surviving partner.

Social factors are very important in this. A small company wanting a large recruiting fee can mess things up. At one of my past employers, one candidate's resume was submitted by 2 agencies (over a 1 year period). The one that submitted it they year prior (and for a different position as well) won a pyrhhic victory as that was the last person hired by that company from that agency/body-shop. And the reason that no more people were ever hired through that agency.

Some body shops have a limited period for the no-recruit clause, some as low as 3 months, some as high as 1 year. Most are measured as being from the first day that you were assigned to that place.

Have lunch with your supervisor at the body shop. Get his take on the matter.

Peter
Wednesday, February 18, 2004

"Is this a normal thing in company contracts like this?"

Scared, this is 100% totally normal in situations like you described where you are being body-shopped out. Nothing unusual about it, would be surprising if it wasn't there.

It's true that it's supposed to be they who approach your boss on your behalf, but what usually happens is your boss says "Scared is happy where he's at." and you never even hear about the offer.

It's good your boss is on your side because he'll be the one dealing with the controlling upper management.

You said your boss told you to grab any better opportunities. This is important. It means that  your boss knows that there is little future for you there, probably because he knows the company is not going to make it. you can't bring this up with him though because he can not explicitly state it, but he is giving you a hint.

Dennis Atkins
Wednesday, February 18, 2004

You're all pretty reassuring you know. :)

There is one other factor -- I actually sent XYZ my resume (having gotten hints from my opposites at XYZ like "when are you going to work for us?"). Basically I finally just got fed up and XYZ was better than just sending out resumes (knowing that they had seen my work and liked it).

I think I might ask XYZ mgr why they wouldn't bring it up with ABC. I.e. I've researched this and usually they would be the ones to go to ABC. But I'll see.

scared but interested
Wednesday, February 18, 2004


Surely given that nature of your problem and the nature of this discussion group the solution is obvious.....

You outsource your existing job to Mumbai, have the guys there re-code all your aps in .net, you pick up the new job, and everyones happy as larry*.

You have your cool new job, your company has a cool new employee, your old company is getting quicker and better quality software AND you get not only your raise but also the cash you skim from the Mumbai connection.

Maybe you gotta spin a story about 'ducking out of the office' a lot and having a sore throat (to cover 'your' new accent on the phone) but other than that, its magic.

braid_ged
Wednesday, February 18, 2004

* you know which Larry I mean

braid_ged
Wednesday, February 18, 2004

If you sent your resumé to XYZ then its you approaching them, even if you did so with some heavy hints.  That doesn't affect any contractual issue between XYZ and ABC and they really have nothing to do with you as you aren't a party to them.

(Whether that makes them a fair contract term or not is another matter).

So that's probably why they haven't approached ABC themselves.  What you need, I believe, is an offer in writing from XYZ then you can act on that, accept that offer, resign from ABC and let them take care of their own contractual issues.

Simon Lucy
Wednesday, February 18, 2004

Or do what braid ged suggests....almost.

Create new company, IJK, and get service/supply contract for 12 months between IJK and XYZ, to include transfer of staff after 1 year.
resign and start working as an employee of IJK.

You may need to adjust the "salary" details for the first year to take account of lack of benefits & business costs.

Justin
Wednesday, February 18, 2004

Just an idea, but why not ask XYZ to hire you as an independent contractor until the clause in your present contract has run out?

I don't know if this is viable in you local legal system, but maybe worth looking at?

Andrew Whitten
Wednesday, February 18, 2004

I was in a similar situation. A client hired me away from the consulting company I worked for.

Just have the bosses at the new company talk to the bosses at your current company.  If they have sense they won't mention that you had anything to do with it (you can ask them to keep quiet about it).

Your current company will likely accept, because they will suspect you are trying to leave, and if you're going to leave anyway they may as well get some dollars out of it.

T. Norman
Wednesday, February 18, 2004

I am going to leave regardless -- it's just a matter of timing now. I'm not sure the independent contractor thing would fly (if it was suggested not in jest) -- XYZ doesn't seem to hire independent contractors; I've only seen them go thru other companies.

I think the likely scenario now is they just talk it out and I get a good job, but it's good to get some other opinions.

scared but interested
Wednesday, February 18, 2004

I was in that situation once, and my bodyshop were causing a minor amount of trouble. What happened was that the hiring manager at the other company dropped a remark about the 7-8 other people the bodyshop had ooutsourced there (mostly expendable helpdesk personnel) and that it was almost time for contract renewal... Things were settled smoothly after that.

x
Wednesday, February 18, 2004

scared wrote, "The catch is that I have to tell my company that I want to leave and that XYZ wishes to hire me first (so they can start the dicker). If ABC refuses to dicker, I'm in a job where they know I want to leave. Is this kind of thing standard?"

Yes, this type of situation happens everyday and yes you will be taking a risk by talking with your boss. If ABC demands a recruiting fee that XYZ is unwilling to pay you will be stuck where you are and you will probably be viewed as a disloyal employee.

This whole deal depends on how bad XYZ wants to hire you and how ABC feels about it's relationship with XYZ. If XYZ isn't a very lucrative client for ABC (your employer) then you shouldn't expect ABC to simply let you go with no strings attached.

One Programmer's Opinion
Wednesday, February 18, 2004

There is some stuff that XYZ can hold over ABC regarding the contract I think -- they've been having a bit of a fight about resources (i.e. me), but I don't really know what the contract says so I'm not sure who is "wrong". In any case XYZ mgmt is fairly annoyed with my mgmt about it...

scared but interested
Wednesday, February 18, 2004

XYZ *is* willing to pay the fee (up to some reasonable amount I assume -- XYZ mgr said it would probably be something on the lines of their usual fee to a recruiter). So being willing to pay isn't a probem, but ABC can still just refuse outright. It would be an uncomfortable job situation but I have enough confidence (arrogance?) in my worth that ABC wouldn't outright try to find a way to fire me (at least not immediately). In any case, I would be looking elsewhere for a job anyway. :)

scared but interested
Wednesday, February 18, 2004

Contrary to what some people have said, your fate with the employer IS in the hands of the employer and body shop. It's got very little to do with you.

I know this is wrong. It's a pity contractors don't complain to their politicians more about this disgusting industry.

Inside Job
Wednesday, February 18, 2004


If you are still scared I think you should think of the worst possible outcome. If I was in your shoes the worst outcome would be that ABC refuses to let you go to XYZ and then they fire you.

BUT...

If XYZ is willing to hire you for twice your current rate it seems that other companies (who have no obligations to ABC) would also desire you. Just go work for another company if you can't get into XYZ right away. In 12 months if your new job isn't working out then call up your contacts at XYZ.

NathanJ
Wednesday, February 18, 2004

scared, you have nothing to worry about, but the way. They're making money out of you. That's all they care about.

They might be into generating employee fear as well - sounds like they are - but it means nothing.


Wednesday, February 18, 2004

NathanJ -

Thanks for writing that down the way you did ("think of the worst possible outcome"). Since I was already planning to look for another job if this possibility fell thru, that wording just crystallized it for me -- I might as well go for it, since I'm leaving anyway. What can they do? Fire me? ;)

scared but interested
Wednesday, February 18, 2004

If they fire you their contract with XYZ is probably void anyway ;-)

Seriously, I assume you live in the US? If you live in Europe it may be worth talking to a lawyer about "restraint of trade"...

SteveM
Thursday, February 19, 2004

US actually. This is unfortunately probably legal here regardless. Hopefully it will just go all right (ABC is willing to let me go nicely).

scared but interested
Thursday, February 19, 2004

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