Is it kosher to work for two companies at once?
October 28, 2010 12:28 PM Subscribe
I have a friend who is working full-time for company A. She has accepted a job offer for a full-time position from company B. She gave notice to company A, planning to quit tomorrow (Friday), and start at company B on Monday. However, she is owed some commissions and bonuses by company A, and her management at company A has convinced her to remain in employment with company A until her commission situation is squared away and she has been paid out. She still plans to begin employment with company B on Monday but not to tell company B about her (temporary) continuing employment with company A.
For reasons I am having trouble articulating, I think she may be setting herself up for a world of hurt if company B finds out what she's doing. Is my concern ill-placed? This is all taking place in the US, btw.
Is she or has she signed a non-compete of any sort? Most of the places I've worked, that would be the issue - and yeah, world o' hurt. Or at least, quick trip to unemployment.
posted by restless_nomad at 12:36 PM on October 28, 2010
posted by restless_nomad at 12:36 PM on October 28, 2010
This is a mess, and it's probably worth consulting an employment lawyer about it.
A lot of this is going to depend on what "remaining in employment with Company A" actually means. If it means that she's still technically on the books but not responsible for any duties and not drawing a salary, hey, what's the big deal? But if she's still actively working for them, that could well be a problem. Even in the absence of non-competes, conflicts of interest are still a bad thing.
I'm wondering why she has any incentive to stay on with Company A. They owe her the money, and it really isn't her problem that they can't do their books right.
posted by valkyryn at 12:41 PM on October 28, 2010 [3 favorites]
A lot of this is going to depend on what "remaining in employment with Company A" actually means. If it means that she's still technically on the books but not responsible for any duties and not drawing a salary, hey, what's the big deal? But if she's still actively working for them, that could well be a problem. Even in the absence of non-competes, conflicts of interest are still a bad thing.
I'm wondering why she has any incentive to stay on with Company A. They owe her the money, and it really isn't her problem that they can't do their books right.
posted by valkyryn at 12:41 PM on October 28, 2010 [3 favorites]
Why would your friend agree to this? It sounds like a form of extortion.
Company A is required BY LAW to pay your friend in a timely manner for services rendered. Her giving notice has nothing to do with it, except they DEFINITELY must pay her within whatever timeframe the law prescribes in her jurisdiction. Done, and done.
We don't know what kind of contracts she has signed with either entity, if any, so the legal aspect is difficult to judge.
World of hurt is unclear. Fishy tactics by company A and a display of poor judgement by your friend - YES.
posted by jbenben at 12:48 PM on October 28, 2010 [3 favorites]
Company A is required BY LAW to pay your friend in a timely manner for services rendered. Her giving notice has nothing to do with it, except they DEFINITELY must pay her within whatever timeframe the law prescribes in her jurisdiction. Done, and done.
We don't know what kind of contracts she has signed with either entity, if any, so the legal aspect is difficult to judge.
World of hurt is unclear. Fishy tactics by company A and a display of poor judgement by your friend - YES.
posted by jbenben at 12:48 PM on October 28, 2010 [3 favorites]
Best answer: If both companies are in the same industry, there is a huge conflict of interest. If she has not yet signed a non-compete agreement, then she will do so within her first few days of employment at Company B... while she is actively still engaged with Company A.
She should either postpone her start with Company B or tell Company A to kindly shove it.
posted by Siena at 1:11 PM on October 28, 2010
She should either postpone her start with Company B or tell Company A to kindly shove it.
posted by Siena at 1:11 PM on October 28, 2010
Best answer: If she is actively engaged in work for Company A this could be a problem as stated above. If she is simply "still on the books" but not actively engaged in work for them, I would suggest she tell Company B on the first hour of the first day of employment, "Hey, Company A still has me on their books. Is this a problem for you? What would you like me to do about it?" If Company B says quit here or there, she can decide what to do. If they say something like, "No problem, just don't disclose anything from here and don't do anything to compete." she will have at least shown Company B that she is open, above board and to be trusted.
posted by Old Geezer at 1:32 PM on October 28, 2010 [1 favorite]
posted by Old Geezer at 1:32 PM on October 28, 2010 [1 favorite]
Not knowing what state your friend is in (important, most employment laws are handled at the state level) consider this for-instance/anecdote: Oregon requires all owed wages within 24 hours of end of employment. If a company fails to pay within 24 hours, then the company gets to pay said person for not being there at their going rate.
Company A owes money, plain and simple. If they are unwilling/unable to pay out appropriately, then take action accordingly. If the amount owed is small, say a few hundred, then give time. If it's more, like several hundred or into the thousands definitely consider lawyering up.
posted by Mister Fabulous at 1:43 PM on October 28, 2010 [1 favorite]
Company A owes money, plain and simple. If they are unwilling/unable to pay out appropriately, then take action accordingly. If the amount owed is small, say a few hundred, then give time. If it's more, like several hundred or into the thousands definitely consider lawyering up.
posted by Mister Fabulous at 1:43 PM on October 28, 2010 [1 favorite]
Best answer: Some posters above are oversimplifying things. There certainly are forms of incentive compensation which can be lawfully forfeited if an employee resigns before they are payable under the relevant policy. There are other forms of compensation which while not forfeitable may as a practical matter strongly recommend staying around to participate in their determination (non-trivial calculations, subjective assessments).
posted by MattD at 2:01 PM on October 28, 2010 [1 favorite]
posted by MattD at 2:01 PM on October 28, 2010 [1 favorite]
Lots of people have two jobs at the same time. There's no "world of hurt". But you haven't explained how she can be in employment in two places at the same time. Is one of them a part-time job or an evening job or something? That's a key point which needs clearing up.
posted by AmbroseChapel at 2:14 PM on October 28, 2010
posted by AmbroseChapel at 2:14 PM on October 28, 2010
She should check her employment agreement with company A -- not only for non-compete clauses but also conflict of interest clauses. For instance, if company A buys products from company B and she is in a buyer position in company A, simultaneous employment with company B could be perceived as a conflict of interest, regardless of her position in company B. [I am not a lawyer, just a manager in a large company who has been thru a lot of training on this type of issue...]
posted by elmay at 2:32 PM on October 28, 2010
posted by elmay at 2:32 PM on October 28, 2010
Best answer: There is not enough here to provide a definite answer, but it sure would be easier if Company B knew and consented to her continuing employment.
If she is full time at Company B, they at a minimum have a right to expect that their employee will be fully engaged for them from the day she starts. If it is a salaried position, that means more than simply showing up at 9:00 and leaving at 5:00. If the continuing employment with Company A (on a time basis) precludes your friend from doing everything that is required for Company B, or if she will be taking calls or sending e-mails for Company A during her time with Company B, I would say that Company B is not getting the benefit of their bargain.
Separately, as many people have noted here, there are potential conflicts of interest for sure. If Company A and Company B compete, and if she still has access to Company A confidential material while she is working for Company B, both companies could object that an active employee of the competing company has access to their stuff. Assuming they compete and both have not given consent, that could be trouble (even if there is no noncompete agreement from either of them).
Finally, as MattD says, it may be perfectly legal for Company A to require your friend to forfeit incentive compensation if she leaves before it's paid out. My Company's bonuses, and the Company before that one, are "must be present to win." Lots of people taking other jobs stick around until bonuses are paid, then bail out. When I took my present job, I moved over a few months before the bonus payout, and cited the missed opportunity in my negotiations for a sign-on bonus with my new employer.
I do some work with our Company's HR department, and aside from the legality of the situation it's really about trust. If an HR rep came to me and said that our new [accountant, salesperson, whatever] still was technically employed by her old company and kept it a secret when she started work, I would be really skeptical of that. To me it is not unreasonable for an employer to expect their new employee to be up front with them about their situation.
posted by AgentRocket at 5:14 PM on October 28, 2010
If she is full time at Company B, they at a minimum have a right to expect that their employee will be fully engaged for them from the day she starts. If it is a salaried position, that means more than simply showing up at 9:00 and leaving at 5:00. If the continuing employment with Company A (on a time basis) precludes your friend from doing everything that is required for Company B, or if she will be taking calls or sending e-mails for Company A during her time with Company B, I would say that Company B is not getting the benefit of their bargain.
Separately, as many people have noted here, there are potential conflicts of interest for sure. If Company A and Company B compete, and if she still has access to Company A confidential material while she is working for Company B, both companies could object that an active employee of the competing company has access to their stuff. Assuming they compete and both have not given consent, that could be trouble (even if there is no noncompete agreement from either of them).
Finally, as MattD says, it may be perfectly legal for Company A to require your friend to forfeit incentive compensation if she leaves before it's paid out. My Company's bonuses, and the Company before that one, are "must be present to win." Lots of people taking other jobs stick around until bonuses are paid, then bail out. When I took my present job, I moved over a few months before the bonus payout, and cited the missed opportunity in my negotiations for a sign-on bonus with my new employer.
I do some work with our Company's HR department, and aside from the legality of the situation it's really about trust. If an HR rep came to me and said that our new [accountant, salesperson, whatever] still was technically employed by her old company and kept it a secret when she started work, I would be really skeptical of that. To me it is not unreasonable for an employer to expect their new employee to be up front with them about their situation.
posted by AgentRocket at 5:14 PM on October 28, 2010
Response by poster: Thank you all for the great, thoughtful answers. A few clarifications and responses from me are in order.
First off, as a couple of people have mentioned, I think the reasons Company B might care are over a non-compete agreement (the companies do indeed compete in the same space), conflict of interest, and the issue of the expectation of being available to work (although I think that's going to be more of an "optical" or perceptual problem than an actual problem of availability)
The question of whether or not she will continue to draw a salary from Company A is a good one, and one to which I do not know the answer. I don't believe she will have any continuing duties at Company A. Nevertheless, Company B would only have her word for this.
The money she's owed by Company A is indeed incentive compensation and, as noted above by MattD, she has to stay employed at Company A to collect it. The amount is substantial - over $25K. The reason it hasn't been paid yet is because Company A rescinded the incentive compensation agreement she (and many other people) signed over some technical issue and are going to be issuing a new, retroactive agreement real soon now. Thus, for now at least, it is her problem.
I explained in my posting that both positions are full-time positions - in fact, they are enterprise sales positions and, like most people in that type of position, she is not required in practice to log hours and clock in and out of an office to get paid. Thus, being employed by two companies simultaneously does not require anything strange like being in two places at once. It simply means, I guess, that she's bound by two agreements at the same time, and therein lies the complexity.
posted by kcds at 8:50 PM on October 28, 2010
First off, as a couple of people have mentioned, I think the reasons Company B might care are over a non-compete agreement (the companies do indeed compete in the same space), conflict of interest, and the issue of the expectation of being available to work (although I think that's going to be more of an "optical" or perceptual problem than an actual problem of availability)
The question of whether or not she will continue to draw a salary from Company A is a good one, and one to which I do not know the answer. I don't believe she will have any continuing duties at Company A. Nevertheless, Company B would only have her word for this.
The money she's owed by Company A is indeed incentive compensation and, as noted above by MattD, she has to stay employed at Company A to collect it. The amount is substantial - over $25K. The reason it hasn't been paid yet is because Company A rescinded the incentive compensation agreement she (and many other people) signed over some technical issue and are going to be issuing a new, retroactive agreement real soon now. Thus, for now at least, it is her problem.
I explained in my posting that both positions are full-time positions - in fact, they are enterprise sales positions and, like most people in that type of position, she is not required in practice to log hours and clock in and out of an office to get paid. Thus, being employed by two companies simultaneously does not require anything strange like being in two places at once. It simply means, I guess, that she's bound by two agreements at the same time, and therein lies the complexity.
posted by kcds at 8:50 PM on October 28, 2010
The reason it hasn't been paid yet is because Company A rescinded the incentive compensation agreement she (and many other people) signed over some technical issue and are going to be issuing a new, retroactive agreement real soon now.
This would be illegal under any employment laws I've ever seen. Mind you, American laws seem pretty crazy these days, so I suppose in some weird, Bizarro world , where employers get to arbitrarily renege on their employment agreements, this might pass muster. Time to Lawyer up.
posted by PareidoliaticBoy at 10:31 PM on October 28, 2010 [1 favorite]
This would be illegal under any employment laws I've ever seen. Mind you, American laws seem pretty crazy these days, so I suppose in some weird, Bizarro world , where employers get to arbitrarily renege on their employment agreements, this might pass muster. Time to Lawyer up.
posted by PareidoliaticBoy at 10:31 PM on October 28, 2010 [1 favorite]
This thread is closed to new comments.
posted by endless_forms at 12:35 PM on October 28, 2010