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0 pointsralferoo1y ago0 comments

And I think I already covered that example.

If the clients are already customers of the new company, then he can make them offers which he knows they would find tempting. There'd be nothing to suggest he ever did anything untoward, and even if a case was made, it'd be thrown out of court pretty quickly.

If the clients weren't already customers of the new company, but as soon as he joined they were approached, then there's a good case to be made that his actions were taken using commercially sensitive information. There's a good chance the court case would find against him. If it could be shown that other people cold called those clients, maybe phoning their public reception phone number and asking who they should contact, that's good evidence that there was no misuse of commercially sensitive information. If the new company suddenly knew exactly who to contact in procurement for the clients, and had phone numbers and e-mails, it's basically a slam-dunk.

If the prices they offer to the clients are in-line with the prices they offer other clients, there's not much of a case to be made. If the client is receiving unusually high levels of discount that are slightly better than what the old employer gave, it's pretty clear.

Like I say, in the UK, in general it is assumed that when someone moves to a new company, there will be some level of customer loss if there is a particularly good relationship between the employee and the client. That kind of stuff can easily be dismissed in court as a genuine existing close relationship (or maybe even the client knew them on linked-in and saw they'd changed to a competitor and approach them for a better deal) and almost no company would even bother trying to pursue this kind of case. In the opposite case, where it's very clear an employee had "stolen" a customer list, they definitely would pursue it because there'd be a high probability of winning that case.

Sadly, it's impossible to give a clear cut answer without talking about ethics. If you conduct yourself honourably and do the decent thing, there's close to zero chance someone would sue you for moving to a competitor, and even if they tried, it's almost certain they would lose the case. If you do the opposite, it's very likely they will sue you and also very likely they will win the case.

There's no magic line to try to skirt close to. But it's also not, as you seem to think, some kind of perpetual hold over a previous employee for people in the UK.

I also think the situation in the US is pretty similar. It doesn't really matter if you'd obeyed a year long non-compete, if you then gave year-old information to a competitor firm while it was still commercially sensitive, you could still be sued and have a good chance of being found at fault.

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pandaman1y ago· 2 in thread

>If the clients are already customers of the new company, then he can make them offers which he knows they would find tempting. There'd be nothing to suggest he ever did anything untoward, and even if a case was made, it'd be thrown out of court pretty quickly.

I am not sure what are "clients" here (I asked about customers but you have some distinction between these two terms, important enough to turn same behavior from benign to criminal). Let's make it simple: I work for Widgets & Stuff Ltd. and our biggest customer is Google. Google buys widgets at $20 a pop, and we make 100% profit on these because Google is not renegotiating price for some reason. The Widgetco Inc. offered me a job. I come and see it's not selling widgets to Google. I call Google (not using some secret number, which you seem to be so concerned about, it's literally Google, the famous tech company) and tell them that I am offering widgets at $15 now.

Who is a client and who is a customer here? Am I going to prison for espionage in UK? What is Widgets & Stuff Ltd. to do if Google decides to buy widgets from Widgetco?

ralferooOP1y ago

There's a lot to unpack even in this expanded question, and it's still not possible to give you the clear-cut answer you want.

Firstly, the difference between client and customer to me is that a client is someone who you've built up a strong business relationship with over years, maybe across different products, maybe with support or other value added services, and probably you might have a couple of people whose main job is looking after this relationship. A customer is much less personal, maybe they just bought a few things that represent a small fraction of your company's revenue, it might even be a fairly insignificant part of the revenue you personally brought to the company. Obviously, if a company loses a small customer it's annoying, but not a big deal. If a company loses a big client, it will have serious repercussions - maybe there's no longer work for an entire team.

> and our biggest customer is Google

This is the most important part of the information. It still doesn't give a full picture of the situation, maybe you have 1000 customers and Google is your biggest by revenue but still only a tiny fraction of your overall sales. In that case nobody cares, apart from maybe for PR. On the other hand, this "widget" might be really specialised and Google was 75% of the company's revenue. You can be very sure that if Google suddenly stop buying more widgets, and when asked why they reply by saying that they're buying from you at your new company at a cheaper price, they will immediately get their legal team preparing for a possible lawsuit and start investigating what information you had access to.

> Google buys widgets at $20 a pop,

This almost swings it the other way for me, as these widgets are relatively cheap commodity items that sound like they could probably be sourced from many other companies. If they can, then losing this customer to another that makes these same widgets is probably something that was on cards anyway, whether you moved to a competitor or not. Probably no case.

The significant thing though is revenue, not price. I assume the volume sold must be incredibly high, because you said they're the biggest customer.

> and we make 100% profit on these

I assume you don't mean 100% profit, because then you'd be making them for free. But whatever, it's an unusually high markup, and they'll want to protect that business investment if possible.

But, on the flip side, if these widgets are being produced at basically zero cost, then you should always expect a competitor to undercut you.

> The Widgetco Inc. offered me a job.

Why did they offer you a job? Did they hire you because you worked for a competitor and they'd seen through linked-in that you regularly mentioned being responsible for some of the big clients they wanted to poach. Or did you just appear on their search for "salespeople for blah widget"? Did you apply for a job there, and if so did you give them the impression that you'd be able to bring some of your clients with you? Or was it just a simple case of being able to get a job with slightly better pay, benefits or promotion opportunities?

> I come and see it's not selling widgets to Google. I call Google (not using some secret number, which you seem to be so concerned about, it's literally Google, the famous tech company)

It's not about it being a secret number, per se, it's about whether you had some kind of privileged connection to a key decision maker in the purchasing department because of your previous company. If so, that is commercially sensitive information. If any random person could e-mail this company, and the email would be read, taken seriously and acted upon, then it's probably not.

The fact that it's "the famous tech company" makes it even more improbable that they just happened to start buying things from your new company rather than your old as soon as you moved, and so much more likely that you were misusing the old company's commercially sensitive information.

> tell them that I am offering widgets at $15 now

There are several very telling bits of information in this phrase. "I am ... now" implies that you're continuing the established business connection in a way that "Hi there. I represent Widgetco Inc and we're selling widgets at only $15 each. Could you put me in touch with the revelant person and we'll go from there."

Now, again at that price point $15 and $20, and the fact that your company seemingly sells widgets that are interchangeable, then they're just commodity items and it sounds like normal business wins and losses, and so would probably be written off as bad luck by Widgets & Stuff if you left and then some other person at Widgetco Inc got a deal with Google. If, however, you were the main point of contact between Widgets & Stuff and Google, and then after moving to Widgetco Inc you became the main point of contact again, then it's a clear misuse of that relationship.

If you'd said, "I know Google buys a lot of these widgets. I can't be involved due to my previous connection with their existing supplier, but it's worth getting somebody to approach them.", then it's almost certainly fine, especially for commodity items that seemingly any company can make. Doing it that way leaves a paper trail that can trivially dismiss any attempt to later sue you. On the other hand, if Google being a customer of Widgets & Stuff was a trade secret, then disclosing it at all is a bad idea.

> Am I going to prison for espionage in UK?

That's a simple one. No. You'd only go to prison for stealing state secrets. Stealing commercial secrets would just be a breach of a civil contract, and the purpose of going to court would be to establish financial losses that result from that.

> What is Widgets & Stuff Ltd. to do if Google decides to buy widgets from Widgetco?

They would weigh up all the different things I mentioned above, and more, to decide whether to pursue it.

Again, the point I'm making is that if you don't intentionally use commercially sensitive information in the new company, you won't have anything to worry about. If you do intentionally use commercially sensitive information that harms your ex-employer and helps your new employer, then you do have something to worry about. Anything in between those extremes has the potential for litigation.

And again, to bring it back to the original topic, I believe you'd have largely the same outcomes in both the UK and the US relating to stealing commercially sensitive information, regardless of whether there was a non-compete in force or not. The only difference is that in the UK, even if there's a non-compete clause in your contract, it's almost never enforced unless the old company has a strong expectation that there will be misuse of trade secrets and is able to convince the judge that those loses outweigh your right to seek any work at the new company. Perhaps the outcome might be that you sign an affadavit re-affirming that you understand your obligation to not disclose such trade secrets, as a condition for the judge ruling that you can work for the new company.

pandaman1y ago

So, in the US all such "unpacking" is done by lawyers at $500+ per hour. You just showed that in absence of non-compete hiring someone from a competitor could turn into a multi-million lawsuit. This is why such a legal climate is an effective indefinite non-compete without pay: why would anybody hire somebody from competition when just deciding who is a client and who is a customer requires discovery? Hopefully you can see yourself how non-competes make it possible for people to switch jobs and simplify life for everyone.

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