A question about subcontracting

Discussion in 'Mac Programming' started by cr2sh, Jan 19, 2011.

  1. cr2sh macrumors 68030

    cr2sh

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    #1
    In the last eight years I've had several good software ideas to help me do my job better. I've designed the programs and then hired a developer to code it. I did this outside of my day to day job, then when I brought the ideas to my boss, he saw the value in them and offered me a subcontract to continue the work. I continued to design the software, sub out the coding and then invoice the company my work for. I make a small profit and the company gets good software, cheap.

    Here's my question. I put in my two weeks notice, my last day is next Friday. The company I work for wants the names of my developers so that they can contract directly with them. I, for obvious reasons, don't want to give them the names of developers I've found over the years. As part of our subcontract I've provided the source code to all the programs I've had developed, but the names and contact info of the developers is valuable to me and isn't mentioned in our agreement.

    Any opinions on what the correct course of action is here?
     
  2. Mactrillionaire macrumors regular

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    #2
    Well, that's really rude of them. If you didn't agree to provide that information then you don't have to provide it. Personally, if I didn't need a reference in that situation, I would just not go back before even the two weeks notice was up. If you need a reference then you may have to find a more tactful exit. As far as legal obligations, there are none based upon your story.
     
  3. Hansr macrumors 6502a

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    #3
    From an ethical stand point you should but if your legally binding contract doesn't mention it, they have nothing to hold against you other than badmouthing you to future potential employers.

    I recommend having a lawyer read over your contract just in case there is a clause there enforcing you give over such information. There definitely is in mine.
     
  4. balamw Moderator

    balamw

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    #4
    Talk to an attorney? Bring a copy of any documentation that describes the scope of work to be done under the subcontract then decide.

    B
     
  5. Tomorrow macrumors 604

    Tomorrow

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    #5
    The client wants to "cut out the middleman," so to speak.

    I don't blame them, but I can't blame the OP for wanting to keep his contact base to himself.

    OP, if I were you, I would discuss it first with your subcontractors, see how they feel about working directly for the client if they choose - after all, you won't be working for the client anymore, why keep the subs from doing so if they want?
     
  6. MrFusion macrumors 6502a

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    #6
    Seems liked you missed an opportunity to sell this software to other similar companies. Depending on the market for your software, you could have turned it into a company and continue what you were doing full time. Maybe there is still a chance for that, even with your old boss? Incorporate and have your former boss as your first client.
     
  7. cr2sh thread starter macrumors 68030

    cr2sh

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    #7
    That's the reason I gave my two week notice. I'm working delicately to try to make the transition to a full time sub. :)
     
  8. NXTMIKE macrumors 6502

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    #8
    ^ That's why I wouldn't hand over the names of your developers if you still want to be making $
     
  9. balamw Moderator

    balamw

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    #9
    Yet another reason to make sure that you have an attorney in the loop.

    B
     
  10. wpotere Guest

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    #10
    They can't even do this. If they do he would have the ability to sue.
     
  11. chown33 macrumors 604

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    #11
    Be sure to bring any employee agreements, too. If the OP is simultaneously working as an employee and as a contractor, then one may have a clear statement that takes precedence over the other. If there's nothing clearly one way or the other, well, that is the stuff that lawsuits are made on.
     
  12. balamw Moderator

    balamw

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    #12
    As the company would if they think their agreement gave them the right to demand the name of the devs.

    IMHO, better to get the lawyers involved in negotiation rather than litigation.

    Definitely! They might even use this refusal as a means to terminate you for cause before your two weeks is up. Then they can tell anyone who wants to hire you that you were terminated for cause, not left voluntarily. Not good.

    B
     
  13. cr2sh thread starter macrumors 68030

    cr2sh

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    #13
    If I say no, they may get pissy and not subcontract me.

    If I say yes, I'm out of the loop.

    I think the best answer is to talk with an attorney and my subs, get their thoughts on it. It may be possible that because of our close, friendly working relationship.. they may not want to deal with a stranger. In that case I will provide the contact info but it will do them no good.

    Thanks guys.
     
  14. wpotere Guest

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    #14

    I meant the bad mouthing. They are not allowed (by law) to bad mouth a former employee or sub contractor. All that can be said is that would not higher the individual in question again. That is it.... Anything other than that could land them in court.

    As for giving up your subs, if it is not contracted, you are not required. The source code is theirs but the tallent is not, it is yours. I have dealt with the same thing in the marketing world, it is nothing new.

    Might be best to have a meeting with them again and simlpy explain your circumstance. However, don't be surprised if the next contract has a clause in there for you to give up your talent. If that is the case, you could negotiate a much higher fee.
     
  15. balamw Moderator

    balamw

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    #15
    My point was that the cost of a lawsuit could break the OPs fledgling company as well, so even if the employer stayed within the bounds of "would not hire again" or simply withheld their recommendation this could have a real chilling effect on the OPs business and have the same effect. No Go.

    B
     
  16. NXTMIKE macrumors 6502

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    #16
    Man....I hate these situations where legally you're fine and can live stress free, yet ethically and theoretically you're in trouble.

    Best of luck OP!
     
  17. Hansr macrumors 6502a

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    #17
    Sure libel is illegal but no one will be able to prove it without a recording or if they do it in writing. If they bad mouth him in a face to face discussion there is nothing that holds them accountable. Even if the other party testifies in court it's easily dissmissable with a half decent lawyer.

    This may just relate more to the small niche area of "programming" I work in where the companies are few and everyone knows someone on the other teams and will go to the pub with them eventually and bad mouth that dick that did so and so.
     
  18. pilotError macrumors 68020

    pilotError

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    #18
    Well if your going the consulting route, just tell them you'll continue to support the software.

    If they don't want to do that, then you go your separate ways.

    Hopefully you didn't quit with the intention of having them as your sole source of income.

    You aren't obligated to give them your sub-contractors names, considering they weren't on-site engagements. Even if they were on-site, you would have a non-compete clause in the sub's contract that says they can't work for your client for some specified amount of time (usually 1 year). In that instance, you can negotiate with the company to have them buy out the non-compete (for some amount of cash).

    If your going to do this as a full-time gig, you may want to find a contract lawyer. It's not something you want to bring on yourself. I've had some lawyers at the clients really try to bend me over with subtle contract language. Something most common folk would never pick up on.

    You also need to pick up liability insurance. Any normal company will check your insurance before signing anything with you.

    If your going to be a Software Development company, you'll still need a lawyer, and a good accountant. Get the business set up right from the begining, because it gets harder the longer you go. The IRS has its sights out for small business.
     
  19. balamw Moderator

    balamw

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    #19
    As chown33 said this was not the only agreement in place between the OP and their employer/client the employee agreement may supercede any other contract they have with the employer, and we don't know what legal agreements (if any) are in place between the OP and his dev resources.

    Non-compte clauses are great to have, but YMMV e.g. they are generally not enforceable in California. We don't know if there was one in place between the OP and his dv resources or if there was one between the OP and his employer that may be relevant here too.

    B
     
  20. wpotere Guest

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    #20

    Having worked management and closely with our HR I can tell you that most companies will avoid doing it as it does not go well in the companies favor. It is also not how you want your company portrayed.

    As I said, talk with them again and see where it leads.
     
  21. pilotError macrumors 68020

    pilotError

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    #21
    Yeah, it was really more advice for the future.

    I think the important take-away was "Hopefully you didn't quit with the intention of having them as your sole source of income", because that is the leverage in the negotiation.

    Nobody likes being unsupported, even if they have the source code. If they call your bluff, you have to be willing to move on.
     
  22. wpotere Guest

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    #22
    You clearly missed my point. The COMPANY cannot bad mouth him.... For instance, he gets a new job and they want his work history. They call and talk to his former HR. They can't bad mouth him at all and any HR rep worth their salt will not answer certain questions. All they can say is if they would or wouldn't hire him again. Who cares about pubs, as it is likely that his new boss and former boss won't even know each other. That being said, it is best to try and come to am amicable resolution.
     
  23. balamw Moderator

    balamw

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    #23
    If the former employer either answers "would not hire" or "no comment", my first reaction as a hiring manager would be to not hire that person or try to get more info about them through "unofficial" channels, i.e. the pub. So in the net effect, how different is that from out-and-out badmouthing? It still likely cost him the gig.

    There we agree, a contentious lawsuit benefits no-one but the attorneys.

    B
     
  24. pilotError macrumors 68020

    pilotError

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    #24
    I know here in NY you can't ask anything more than did he work there (dates) and general salary range (not even sure of that anymore). HR tells EVERYONE to forward any calls to HR.

    You personally can get sued by the individual as well as the corporation for defamation.

    Given that, I work in the Financial area of NY, and everybody knows everyone else (or knows someone who does). Word does get around about people. That typically comes from co-workers though, not managers.

    I don't think this is one of those situations. It's pretty rare that someone gets so pissed they try and blackball you. The worst I see happening is that they choose not to do business with you anymore.

    Seriously, you left to go start a business. I can't think of a better reason to give a manager. It doesn't reflect poorly on him, and he can probably continue the contractor relationship without question from the senior Wonks (not sure if you work for a big company or not).

    If it's a small business, let him go look around at contractor rates and let him decide whether he was getting his bang for the buck out of that relationship. It always comes down to money and need.
     
  25. wpotere Guest

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    #25
    Because it could be for any reason not just a bad reason. Could be as simple as the employee not fitting it around the office. It does not mean that the person is bad, just that they have no intrest in bringing the person back. That being said, most HR departments won't even go that far. All they will do is verify that the person worked for the company. I know that my company won't release any information good or bad on a person and any manager talking about an employee in a pub (found out by HR) is quickly dealt with. Why? It is the quickest way to get your company in the news in a very neagtive way.
     

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