
Is it OK to Hire People from Your Friend’s Company? (2011) - ski
http://www.bhorowitz.com/is_it_ok_to_hire_people_from_your_friend_s_company
======
mcv
What a bizarre kind of possessiveness. Companies don't own their employees.
Slavery is supposed to have ended quite some time ago (yes, I know it still
exists).

If you want to hire someone, hire them. If an employee leaves, let them leave.
No hard feelings. If you really don't want them to leave, offer them more.
Preferably do that before they think about leaving. This sort of unfair
limitations on employee's employability is or should be illegal.

~~~
eshvk
I feel like that is not the point though. The analogy he made was fairly
reasonable: people have fairly demanding (sometimes irrational) restrictions
on who they decide to keep in their lives as friends. This is about that. Not
about slavery. Not about mismanagement of a company.

~~~
mcv
Well, I don't need "friends" who make demanding and irrational restrictions on
our friendship.

------
droithomme
This article was written just a few months after the Justice Department in
late 2010 announced its agreement with Adobe, Apple, Google, Intel, Intuit and
Pixar regarding their anticompetitive practices. It is clearly a reaction to
that agreement and its purpose is to lay out an argument that can be used to
maintain plausible deniability regarding anticompetitive agreements by arguing
that these activities are just friends being polite and displaying good
manners, rather than a conspiracy to defraud top talent of market wages.

~~~
mindslight
It's not this post that's terribly wrong, but the widespread fallacy of
equivalence between tiny companies and large corporations. It's not
inconsistent to think it reasonable for small startups to avoid hiring each
other's employees, yet that scaling this up to a significant part of the labor
market is problematic.

~~~
greenyoda
Owning a small company doesn't magically exempt you from obeying the law.

~~~
mindslight
Sure, but when discussing morality, the current legality is irrelevant.

------
hartator
Such a terrible article.

Just ask your friend. In 99% of cases, it's okay to ask. I mean if the guy or
the girl want to leave, your friend is gonna to tell everything you need to
know, what matters. And maybe, you aren't gonna to hire him because he is
actually terrible or maybe your friend will just say he is fantastic and give
you a green light.

> It is important to note that just about all of these kinds of policies
> violate the Right to Work laws in California.

There is no right to work in California. [1] It's the actual opposite. Coming
from a VC, that's shameful.

1\. [http://en.wikipedia.org/wiki/Right-to-
work_law](http://en.wikipedia.org/wiki/Right-to-work_law)

~~~
aptwebapps
The 'right-to-work' doublespeak wins again. Horowitz is right (I think) that
this behavior may violate California labor laws but he used the wrong term.
The article you linked to explains what I mean but the gist is that right-to-
work laws are laws that restrict union organizing in various ways.

Edit: It's not actually very relevant to this discussion but to the extent
that it is, the fact that California does NOT have such a law means that
workers have more rights than states that do.

------
imgabe
> It is important to note that just about all of these kinds of policies
> violate the Right to Work laws in California. Specifically, if you block a
> hire based on this kind of policy and the employee loses their job and
> cannot find work, your company is liable for his wages. As a result, the
> business relationship with the other company must be extremely important for
> you to employ any kind of “hands off” policy.

I think this is an interesting aspect about business reasoning that a lot of
people don't understand. Even though another comment here points out this
isn't correct. If something is illegal and carries a risk of large fines or a
large civil judgement, that doesn't mean you shouldn't do it necessarily. It
just means that you have to weigh that potential cost against the benefits of
doing it. If the benefits are greater, you go ahead and pay the fine or the
litigation as a cost of doing business.

You don't change the way companies operate by going on about whether something
is right or wrong. You have to introduce a cost larger than any potential
benefit. If not hiring person X costs you a couple hundred thousand dollars in
a civil judgement, but helps you keep a business partnership that's worth
hundreds of millions in revenue, you'd have to be crazy to go ahead and hire
someone from a business partner in those circumstances.

------
mayop100
The similarities between this post and the actions that Google and Apple took
and are now being investigated for are striking. At a small scale, it's just
"good business" not to poach. At a large scale it's "evil" and illegal. Seems
rather arbitrary to me.

~~~
mcv
I don't think it's good business at all. It's stupid and evil. It's very small
scale, so it doesn't have a lot of consequences outside the one employee that
gets screwed, but scale is really the only difference here. And even one
employee getting screwed unfairly is one too many.

~~~
justizin
Right. We need to stop treating human interaction and people's livelihood,
their very ability to earn a living and have a home and feed themselves and
perhaps their family, as something that can be statistically gamed.

Grow the fuck up or do not run a company. Childish viewpoints are for the
playground. If your friend can't deal with the fact that you offer a more
attractive work environment, he or she deserves for their company to tank and
the smart employees will follow the first one who leaves.

------
pessimizer
Is it OK to sell for cheaper than a friend? Is it OK to use a vendor who won't
give your friend the price that he wants? Ultimately, is it OK to compete with
a friend?

Maybe they should just rename anti-trust law into anti-friend law, the bitter
killjoys.

------
yaur
"you should get the issue onto the table by informing the employee that you
have an important business relationship with his existing company and you will
have to complete a reference check with the CEO prior to extending the offer"

Is that even legal? IANAL but it seems highly unlikely that only hiring
someone if they agree to a reference check with someone they didn't list as a
reference is kosher in most states. Typically the way this would work is that
you could make a conditional offer, and anything beyond date of hire and date
of departure (that caused them to not get the job) would be grounds to sue
their previous employer... in which case you really aren't doing your friend
any favors.

IMO in the scenario described you should just hire them and apologize to your
friend.

Edit: and even if it is legal in your state its unethical as hell. If your
friend says not to hire they are most likely going to be looking to replace
them ASAP with someone who isn't looking to leave.

~~~
argonaut
IANAL, but the correct question to ask (the opposite of your question), is: Is
that illegal? And I'm pretty darn sure it is not illegal. Why would the even
be illegal? You can reference check as much as you want.

Be careful not to conflate social custom (it is customary that a company not
reference check you with the company you work at) with law.

EDIT (reply to below): which has nothing to do with law. Parent claimed it was
illegal, however. Not to mention the fact that it is perfectly ethical to make
an offer conditional on letting you talk to their employer. What would be
unethical is if you talked to their employer without asking them.

~~~
wavefunction
I would prefer to ask (a question you don't ask), is: Is that ethical? And I'm
pretty darn sure it is not ethical.

~~~
sokoloff
I will tell you that I use all reasonably (and legally) available information
in evaluating a prospective senior hire. That includes looking through my
network for anyone who may have overlapped and getting their take on the
candidate.

I will sometimes make an exception to that policy (hurting myself and my
company) to not ask a current employer in cases where I probably wouldn't
weigh that input very highly anyway.

I sure wouldn't expect that if you're applying to a company for an important
position that they will entirely confine themselves to _your list_ of
references. Why on Earth would they? I'm going to check my network, your
public Google/github/twitter/FB presence, etc.

To me, it's not about doing a reference check with my friend the CEO of the
other company to whitewash unethical colluding behavior nor to threaten a
candidate, but rather because doing reference checks with people who know the
candidate well is _good business_.

I should perhaps provide the following color to the above: I will also
aggressively recruit from a friend's company, and I've been on the other side,
with startups/spin-outs aggressively recruiting top talent from within my
organization. I never took it personally, and am happy to see the success that
allows them to hire great employees, and happy to see employees go on to a job
they prefer. My job is to make my own company a great place to work and retain
top employees that way, not try to cultivate some quid-pro-quo social
obligation to prevent the prison warden next door from hiring my prisoners.

------
cheepin
Why shouldn't companies retain employees by paying them what they are worth
and giving them a good work environment rather than colluding to keep them
from leaving?

~~~
ericd
It's not about colluding, it's just that the new CEO is bound to not hire you
out of loyalty to his/her friend. Social laws and laws on the books don't
always line up well.

~~~
gtirloni
col·lude (kə-lo̅o̅d′) intr.v. col·lud·ed, col·lud·ing, col·ludes To act
together secretly to achieve a fraudulent, illegal, or deceitful purpose;
conspire. \--

Seems like colluding to me. Just like in the Google/Apple/Adobe case. It
doesn't matter if it's done out of friendship or fear of upsetting almighty
Steve Jobs.

~~~
greenyoda
If his CEO friend didn't know he was doing this, they would not be _acting
together_ \- the friend would not be performing any action at all. But if they
communicated with each other and agreed to act this way (like Apple and Google
did), then it would be collusion.

But even if it wasn't outright collusion, it could still be ethically
questionable to limit another person's opportunities just because you're
afraid of losing someone's friendship.

------
justinhj
Most American's sign an at-will employment contract, meaning the employer can
terminate you without reason whenever they want. Given that, why would you
give the company any more loyalty than they are giving you? The only reason I
can think of is money. i.e a financial incentive is in place for not leaving.
In accountancy for example I know a guy who was given 1 year salary for
leaving his company. His domain knowledge being so valuable to a competitor it
was better to pay him for a year to sit at home than have him work for them.

------
jnagro
"You can hire people away from your friends’ companies without damaging your
relationship with that friend. You can fight to retain people while they’re
being aggressively approached by other companies. Sometimes you will win, and
sometimes you will lose. But through it all, you should keep a very important
lesson in mind: You must refuse to engage in any agreements with other
companies that insist you not hire from each other. Because that’s bad
business. Plain and simple."

[http://www.eliastorres.com/blog/how-to-fight-illegal-
recruit...](http://www.eliastorres.com/blog/how-to-fight-illegal-recruiting-
practices)

------
Zigurd
This article is terribly wrong except that it explains how otherwise
intelligent people, advised by top-tier lawyers and employment compliance
experts can go so wrong about a significant matter of law, ethics, and
billions of dollars of the wage-earning economy in Silicon Valley.

------
fenguin
I've met (and quickly distanced myself from) many people here in the Valley
who prioritize short-term/short-sighted goals over long-term relationships.
Even if you're not yet part of a tight-knit community here, word travels fast,
especially on Secret. Screwing someone over can have long-term repercussions,
and the last thing you'd want is for something as trivial as a single employee
ruining a strong relationship for life.

Plus, friendships can often lead to far greater payoffs in the long-term --
I've given and received many introductions to stellar employees among my
circle of friends; having a reputation as a robber is the fastest way to stop
this flow of introductions.

OT: Ben has a lot of really great material on his blog, and I'd highly
recommend anyone who hasn't yet to read through everything! He also has a
great book that compiles all his wisdom into one place [1]; if you're too busy
to read it I've shared my notes on Evernote [2].

[1] [http://www.amazon.com/The-Hard-Thing-About-
Things/dp/0062273...](http://www.amazon.com/The-Hard-Thing-About-
Things/dp/0062273205)

[2] [https://www.evernote.com/shard/s345/sh/7b35d8ab-
daba-4181-8b...](https://www.evernote.com/shard/s345/sh/7b35d8ab-
daba-4181-8b8a-2c69e16eda6f/0f10e830b0a7ce57eb384a29fa2b8f64)

~~~
skj
So, the advice given here is certainly practical and useful, but it's also
wrong. Not wrong as in incorrect, but wrong as it's effectively steeling an
opportunity from an individual (and you!) in order to appease a relationship
with someone who views their employees as property.

The "thing" there is not the employee, but the opportunity.

~~~
justizin
In addition to the fact that this is inhumane, even from a business
perspective, it's important to look at the Apple Google relationship,
appeasing Steve Jobs was not a winning strategy for Google and it becomes
increasingly clear that they AND individuals who wanted to work for them lost
out on great opportunities to do things that were clearly in their mutual
interest because it might upset a fucking sociopath.

------
bigd
This is so sad, on so many different levels that is hard to pretend is not
true.

While my hearth fights the need of shouting "stop behaving like a whiny bitch
about the company relationships", then you realize that companies in US are
equal to peoples.

And that, as John Stewart was pointing out recently, maybe sometimes they also
pretends to have religious rights.

So I am not surprised that something like hires get taken as betrayals.

However, if logic had to enter this equation somehow, we should realize the
purpose of a business is business. So, if an employee is an asset you should
treat him as such, and let him go.

And if you or your friend CEO get emotionally attached to an employee, you
have larger issues. One, maybe, is a narcissistic disorder.

------
nsedlet
When the friend is not also a business partner, this practice seems bad for
the company - the CEO is hobbling the company's ability to hire to preserve a
personal friendship. The CEO is not the only stakeholder - at the very least
he/she should carefully weigh the effect on the friendship against the cost to
the company of not making the hire.

On the other hand, Ben does point out that in practice you really shouldn't do
this with very many companies, if any. And I'm not sure you could say that
it's CEOs' (or any employees') duty to prevent personal considerations from
affecting their work.

------
JumpCrisscross
> _many companies employ written or unwritten policies that name companies
> where it is not OK to hire without CEO (or senior executive) approval._

This seems counterproductive. Executives should recuse themselves when
emotionally compromised. A _bona fide_ independent decision should calm a
rational friend.

Business relationships are more complicated. An employee of your largest
customer, for example. Good protocol works most of the time. Commercial reason
and the law fill the gaps.

------
EGreg
Looks like the understanding that most people in this industry had (not
poaching employees of "friends") is being considered illegal on HN.

I understand that this particular case of Google-Apple happens to be
considered illegal. However, I am not convinced that a law banning this
practice will not make things worse for most people.

A cartel involves an arrangement where members REFUSE TO OFFER a better deal
than the others - a pricefixing arrangement. On the other hand, this is very
clearly about not going blatantly on each other's turf to solicit / poach.
Consider this ... how did Apple find out about this? Was the employee called
during work hours?

How come recruiters - internal HR or external agencies - can be instructed to
not advertise job openings in venues like porn sites, but - it seems from all
this outrage - cannot be instructed to not advertise on their competitors'
websites? Why can't companies decide that the cost of reprisals for poaching
key members is too high, independently and internally, before agreeing not to
do it? To sum up - I do not see this as a cartel AS LONG AS neither company
turns away candidates who applied on their own, based on a mutual agreement.
To be fair, Google did have such a policy and to the extent that this policy
existed, that WAS a cartel. But NOT if the agreement is limited to not
advertising offers to each other's key employees. Those employees can easily
find out job openings and average salaries just like everyone else can.

If you are going to make the argument that recruiters calling certain key
employees of the other company to lure them away will give the majority of
employees a better sense of how much they are worth and everyone's salary if
going to go up, you'll have to work pretty hard to show the connection.
Poaching key members of a team (e.g. to sabotage a competitor's project) seems
to mostly benefit those key members. It increases the cost for everyone else
including the companies involved. And that cost is very likely to be passed on
to the other employees. You would also have to show that the companies will
always choose not to pass on the cost of poaching to their employees --
because otherwise, you will have to admit that LESS poaching might actually
lead to LARGER salaries. And in fact, the data seems to show this. (Once
again, by poaching I mean reaching out and specifically cold calling key
people in rival companies to advertise positions that they could have found on
their own.)

~~~
prutschman
> On the other hand, this is very clearly about not going blatantly on each
> other's turf to solicit / poach

To the contrary, the article is clearly about the case where someone from
another company's "turf" approaches you unsolicited:

> You check with your people to make sure that they did not approach Fred
> first and they assure you that Fred was already looking and will go to
> another company if not yours. Now what?

I think this is clearly about CEOs treating employees as the company's
property in a psychological sense, rather than thinking about them as beings
with agency.

------
wtvanhest
Its interesting to see comments that require the founder to gain some level of
permission from the friend before hiring their employee. Then in a
simultaneous thread Steve Jobs, Google and Intel are all complete scumbags for
talking to each other about hiring.

------
cousin_it
> _It is important to note that just about all of these kinds of policies
> violate the Right to Work laws in California._

Is that the only law they violate?

------
michaelochurch
This provides a lot of insight into how executives think. Employees aren't
people, just pawns to be traded and weighed against the value of their own
friendships and animosities. It's pretty disgusting, but not surprising.

What I like about the new Silicon Valley elite is that those asshats are too
socially gauche to realize that their attitudes are considered completely
unacceptable by, well, everyone else. It's really fun to watch them humiliate
themselves in Valleywag.

------
mathattack
This seems to be a little bit of golden rule, right? How would you feel if
someone hired away one of your best employers? What if it was a close friend
that was doing the hiring? Or an important business partner? Would it suffice
to say, "They were looking anyway?" Would it make a difference if it was a
customer? Does it matter to the morality if the other party will feel
aggrieved?

My 2 cents is this isn't that black and white, but it's very delicate. The
only way it works is if the employee in question approaches their current boss
first, saying, "Here is why I think it's time to move one. I would like to
approach company Y. Can I have your blessing?" This gives their boss a chance
to either fix the situation, or encourage the move. You can give a wink and
nod that the interview would go well (you would never do this without
confidence based on work experience that you'd hire them) but you can't
formally start the process before this happens.

~~~
tbrownaw
_This seems to be a little bit of golden rule, right? How would you feel if
someone hired away one of your best employers?_

How would you feel if someone refused to hire you as a favor to your old
boss's boss?

~~~
mathattack
If I knew in advance that they were friends, I would go to my current boss
first. The future boss should suggest the same.

