I have worked for 5 years at a company and I am seeing signs that the business is failing. I have lots of ideas about how to make the company succeed. Rather than share my ideas with my boss, I am considering quitting my job and starting my own company. Should I ask co-workers if they want to work for me? Can I tell my boss’s customers about my new business?

Contributed by Debbie

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About John Hooker

T. Jerome Holleran Professor of Business Ethics and Social Responsibility Tepper School of Business Carnegie Mellon University

One response »

  1. John Hooker says:

    There is certainly no problem with quitting the firm and taking your ideas with you, subject to any legal obligations (see below). However, taking other employees and customers with you requires some thought. Your boss could argue that part of your employment contract is an implicit agreement that you will work on behalf of the firm and not against it. Luring employees and customers away from the firm is working against it, and so it is probably ungeneralizable and unethical because it violates this implied agreement. It may also be an explicit violation of your employment contract.

    The obvious way to fix this problem is to resign before you start talking to customers and coworkers. At this point, luring them to your new company is perfectly generalizable (if it is legal) because it is already standard practice in business.

    Here are some legal considerations. You may have signed a nondisclosure agreement that forbids you from using ideas and techniques you acquired at your present company. In addition, any patentable device you conceived while an employee is legally the property of the company, even if you said nothing about it and developed the idea in your garage at home.

    Finally, contracts often have non-compete clauses that forbid you from competing with the company after you resign. These clauses are traditionally unenforceable under Anglo-Saxon common law, but exceptions are made nowadays. If there is such a clause in your contract, you may want to consult a lawyer. Maybe some legal experts out there can shed more light on this.

    You may be concerned about sabotaging a company that is already on its last legs. I’m not going to endorse the popular view that business is and should be dog-eat-dog, presumably because fierce competition makes us all better off in the long run. Things are more complicated than this. However, beating the competition can be utilitarian even in an individual case, if it replaces an inefficient company with a more productive one. There are transition costs in the shutdowns and layoffs that result, but you are actually mitigating these by hiring employees who will be laid off.

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