Lets get ethical, ethical.
March 20, 2012 3:38 PM   Subscribe

Is it ethically questionable to knowingly start working for your future competition?

(annon because my metafilter screen name is quite traceable to me, and I'm doing a bunch of job hunting right now).

I just moved to a new city, and have been having trouble finding work (moved because my wife got a very nice job, that almost supports us...). The plan since moving has always been that I work a "day job" in admin or throw-away job and start a small business on the side, allowing it to slowly replace my day-job income. I've got several years under my belt working for quality-oriented, well known businesses of this type, and really love it... It's been my plan all along to work for myself.

Regardless, finding even your run of the mill admin job is apparently a little difficult to come by in our new digs, but very recently, a couple local mom-and-pop level businesses have actually approached me and have suggested that there might be work for me there, specifically to help their wholesale programs grow a little bit, and help them iron out some of their back-end systems.

Now, normally, I'd just jump on this and just charge them a consulting rate...but I know for a fact, that neither shop could afford it. And for the timebeing while we continue to get settled, we could use a steady-ish paycheck, even if it wasn't all that much money.

But I hesitate; these kids are going to be my direct future competition, in the near future at that. Honestly, I don't really want to help out my competition with some of these efficiency programs I can put in place; I can already deliver a better product than they are, and I know quite a few ways to reduce overhead and deliver much better wholesale experience than either of these places do.

Is it ethical to start working for them knowing that when I quit, it will be to become their direct competition? Is it just dumb to start working for them and give them parts of the edge I have over them? Or is it cunningly smart to do so, learn their weaknesses and exploit them later? Even if it is ethically questionable, or wrong, should I still do it?

(note that neither of these places is going to have me sign a non-compete...thats kind of unheard of in this industry, until you get into the larger...much larger companies.)
posted by anonymous to Human Relations (9 answers total) 1 user marked this as a favorite
Surely there's more to competition than efficiency and improving procurement. It's all about product, isn't it?

On the other hand, it might be a good idea for you to state up front that you intend to start a similar business in the future, just so there are no nasty surprises.

Generally speaking, unless we're talking consumer electronics or whatever, the most successful businesses have an abundance mentality. There's room enough for everyone, and if you deliver a superior product and a superior experience, for a lower cost, you're going to be successful.
posted by KokuRyu at 3:51 PM on March 20, 2012 [1 favorite]

It is unethical to work for them and deliberately give them subpar work product.

It is ethical to work for them, give them good work product, and later strike out on your own.

It is unethical to take a job with the express purpose of getting "insider" knowledge about your competitors; it is ethical to work for them to earn money and then build a better mousetrap later for your own company.

It is ethical to sell them consulting services based on aspects of your expertise that don't implicate ideas or technologies that you plan to use as your competitive edge.
posted by Inspector.Gadget at 3:52 PM on March 20, 2012 [15 favorites]

How fiercely competitive is your industry?

You could try being honest with them: "I am dedicated to a long future in this industry, and believe we would both benefit if you hire me. I need to inform you, however, that in the long-run I would like to open my own business."
posted by croutonsupafreak at 3:57 PM on March 20, 2012 [1 favorite]

Depending on the employment contract you sign, it may actually be illegal to start up a competing company within X number of years after leaving their company. Ethical or not, working for a company with whom you intend to compete in the very near future may actually hinder your efforts at launching your own company.

I've been told that such clauses are generally impossible to enforce, but IANAL so take what I say with a grain of salt.
posted by asnider at 4:02 PM on March 20, 2012

so…you basically want to use these ppl for a paycheck while you hold back the work you were ostensibly hired to do—so as not to jeopardize your future prospects as their competition. this is, at the very least, shady. if you don't tell them up front that you have plans to become their competition, they'll find out eventually when your company launches and you had been working for them all the while preparing for that launch, you might not be the most popular person in that industry.
posted by violetk at 4:15 PM on March 20, 2012

You had asked about ethics; my answer addresses both ethics and law.

Ethics to think about: if while you're working for them, you're doing what they are asking you to do and doing a competent job of it, it is not unethical to work for them. It would be unethical to do less than competent work, use your insider information to further your own ambitions, or use their time and resources to work on stuff related to your future business.

Law to think about: You have a duty of loyalty to your employer while you're working for them, so you could run afoul of this even if you don't sign a non-compete. Using company time/resources to work on your own stuff is classic behavior that violates this duty of loyalty. It's a common law duty that doesn't arise out of any contract you sign. So if you want to stay on the right side of this, you have to ensure that it will be clear in the future that you weren't spending time at work, or using your work computer, or phone, or whatever, to work on your own stuff. This line can sometimes be blurry, but it's to your advantage to keep it clear.
posted by MoonOrb at 4:37 PM on March 20, 2012

Why not collaborate with these folks? It sounds like you have some great ideas and practical skills; they have a steady income stream and a toehold in the market. There are a whole lot of options here for becoming a partner, buying equity in the company, earning equity in the company, offering a merger, etc.
posted by equipoise at 5:32 PM on March 20, 2012 [1 favorite]

: "Is it ethical to start working for them knowing that when I quit, it will be to become their direct competition? Is it just dumb to start working for them and give them parts of the edge I have over them? Or is it cunningly smart to do so, learn their weaknesses and exploit them later?"

If it was ethically wrong to do this, it would be ethically wrong for anyone to continue working for an organisation and be planning to start their own business sometime in the future. As long as you discharge your duties competently (eg don't hold back from suggesting improvements just because it might increase the competition you face down the track), I don't see an issue.

I don't think it's particularly smart or cunning, it's just business and many (most?) people who start their own business did so after working in the same industry. What it does give you is a chance to 'test-drive' your theories so you are better placed when you strike out on your own to avoid a few mistakes.
posted by dg at 7:44 PM on March 20, 2012

This would be appear to present a clear conflict of interests for you. Given that you seem unsure of your ability to treat them fairly while pursuing your interests I would avoid working for them. (As other have said if you can treat them fairly, there is less likely to be a problem. However, even then it's not entirely clear that there is isn't a problem. You would have access to client lists, business practices, etc. that they wouldn't want competitors to have. In this case, if they wouldn't hire you while knowing the truth, then you shouldn't work for them.) At least you ought to inform them of your intentions in general terms.

Furthermore, one of the main problems with conflicts of interest is the effect on your reputation. Even if you do nothing wrong, other people in your industry (and vendors, suppliers, clients and the legal system) could very well react negatively to the perceived betrayal of your employers. Of course, they could opt to sue you *even if* you believe you've broken no laws. In this case, winning the lawsuit could still be very costly, in terms of money, reputation and stress. Costly enough to make it worth it to just skip the problem entirely.

The only exception that I see here could come from how common it is for employees to strike out on their own in your field. For example, in software and technology it's very common for employees to form their own start-ups that compete (directly or indirectly) with their former employers. So, this behavior, in those fields, is par for the course. If your field is not like that, I'd not risk it.
posted by oddman at 8:35 PM on March 20, 2012

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