Timothy Gardner Ph.D. Associate Professor of Management Owen Graduate School of Management Vanderbilt University Nashville...
What Brings You to This Session Today? <ul><li>To Better Understand, For Your Own Benefit, the Ethics of Talent Poaching <...
Outline <ul><li>Better Define Poaching – Strip it of Negative Conations </li></ul><ul><li>Better Understand Why People “Th...
First Exposure to Sore Losers <ul><li>Reviewer for an Academic Journal </li></ul><ul><li>“ My problem with this paper is t...
 
 
 
Discuss for 5 Minutes <ul><li>Lateral Hiring:  </li></ul><ul><li>. . . the intentional actions of one company to  identify...
<ul><li>Terry Eggers and Riley Chadwick have been customers of the A-B-C Company for the last four years.  Recently a loca...
Results <ul><li>Customer Poaching Scenario :  </li></ul><ul><li>7% Rated the Behavior Unethical </li></ul><ul><li>Employee...
Let’s Take Misconduct Off the Table <ul><li>Unfair Competition </li></ul><ul><li>Deception (Rusing, Deceiving the Candidat...
<ul><li>Misappropriation of Trade Secrets  </li></ul>Let’s Take Misconduct Off the Table
<ul><li>Inducement of Breach of Employment Contracts </li></ul><ul><li>Non-solicitation agreements  </li></ul><ul><li>Non-...
So What’s Left? <ul><li>“Those are MY EMPLOYEES you are hiring!! </li></ul><ul><li>(Property Rights) </li></ul><ul><li>“Vi...
Origins of Property Rights Over Employees, Their Labor, and Their Human Capital <ul><li>Roman Law </li></ul><ul><li>Mediev...
Roman Law <ul><li>Pater Familias </li></ul><ul><li>Absolute Authority </li></ul><ul><li>Wife </li></ul><ul><li>Children </...
Medieval English Law <ul><li>1348 – Bubonic Plague (Black Death) </li></ul><ul><li>Killed 50% of English Laborers </li></u...
U.S. Law (Colonial) <ul><li>Indentured Servitude </li></ul><ul><li>50% to 66% of all European Immigrants to Colonial Ameri...
U.S. Law (1700’s thru 1800’s) <ul><li>Common Law Enforcement of Prohibitions Against Enticement </li></ul><ul><li>Employer...
“Poaching Violates an Unwritten Code of Business” <ul><li>Without the Legal System to Deter Enticement, Employers Took Thi...
“Poaching Violates an Unwritten Code of Business” <ul><li>Waltham Watches (Civil War Era Manufacturer) </li></ul><ul><li>K...
SO WHAT?! This is What People “Think;” Not What is Right & Wrong <ul><li>Misconduct </li></ul><ul><li>Property Rights </li...
Fine Grained Analysis <ul><li>Current Employer </li></ul><ul><li>Current Employee </li></ul><ul><li>Prospective Employer <...
What Are the Ethical Implications of a Prospective Employer Identifying, Contacting, Soliciting, and Attempting to Hire a ...
Does a Currently Employed Person Violate Any Ethical Obligations When She Considers or Accepts Unsolicited Offers for Outs...
Current Employee-Current Employer <ul><li>Current Employee-Organization </li></ul><ul><li>Current Employee-Immediate Super...
Current Employee-Current Employer <ul><li>Current Employee-Organization </li></ul><ul><li>Market/Above Market Pay and Bene...
Current Employee-Current Employer <ul><li>Current Employee-Supervisor </li></ul><ul><li>Staying in a job because of loyalt...
Current Employer-Prospective Employer
Current Employer-Prospective Employer
Current Employer-Prospective Employer <ul><li>Does a prospective employer face any ethical obligations when deciding wheth...
Inter-Organizational Relationships <ul><li>Joint Venture </li></ul><ul><li>Consortia </li></ul><ul><li>Alliance/Network </...
Ethics of Lateral Hiring <ul><li>Why People  Think  it is Unethical </li></ul><ul><li>Misconduct </li></ul><ul><li>“Proper...
Ethics of Lateral Hiring <ul><li>Fine-Grained Analysis of Ethical Issues </li></ul><ul><li>Employee-Prospective Employer <...
Addressing Concerns of Your Hiring Managers <ul><li>Use a Term Without All the Baggage:  Lateral Hiring </li></ul><ul><li>...
Addressing Concerns of Your Hiring Managers <ul><li>Why is He/She Reluctant to Recruit People from Other Firms? </li></ul>...
Addressing Concerns of Your Hiring Managers <ul><li>Is There an Implicit or Explicit Agreement Between Your Company and th...
Conclusion <ul><li>Jewish Ethical Tradition </li></ul><ul><li>Babylonian Talmud  – Prohibitions against purchasing a piece...
Conclusion <ul><li>Is there a community that will be disrupted by lateral hiring? </li></ul><ul><li>Are the members of thi...
Any Questions??
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Why Are the Losers So Sore? The Ethics of Talent Poaching

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Dr. Timothy Gardner\'s presentation from the ERE Expo Fall 2008.

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  • Transcript of "Why Are the Losers So Sore? The Ethics of Talent Poaching"

    1. 1. Timothy Gardner Ph.D. Associate Professor of Management Owen Graduate School of Management Vanderbilt University Nashville, TN
    2. 2. What Brings You to This Session Today? <ul><li>To Better Understand, For Your Own Benefit, the Ethics of Talent Poaching </li></ul><ul><li>To Address Your Hiring Managers’ Concerns About Poaching </li></ul><ul><li>To Challenge Your Company’s “Hands Off” List of Forbidden Companies </li></ul><ul><li>To Avoid “Ticking Off” The Wrong People at the Wrong Companies </li></ul>
    3. 3. Outline <ul><li>Better Define Poaching – Strip it of Negative Conations </li></ul><ul><li>Better Understand Why People “Think” the Practice is Unethical </li></ul><ul><li>Fine Grained Ethical Analysis (Three Parties) </li></ul><ul><li>Addressing the Concerns of Hiring Managers and Top Management About Poaching </li></ul><ul><li>Conclude </li></ul>
    4. 4. First Exposure to Sore Losers <ul><li>Reviewer for an Academic Journal </li></ul><ul><li>“ My problem with this paper is that successful publication will provide material aid to managers engaging in the unethical behavior of talent raiding.” </li></ul>
    5. 8. Discuss for 5 Minutes <ul><li>Lateral Hiring: </li></ul><ul><li>. . . the intentional actions of one company to identify , contact , solicit , and hire a currently employed individual or group of individuals away from another company. </li></ul><ul><li>How or Why Could Someone Consider this Practice Unethical? </li></ul>
    6. 9. <ul><li>Terry Eggers and Riley Chadwick have been customers of the A-B-C Company for the last four years. Recently a local newspaper published an article about the success of the A-B-C Company and mentioned Terry and Riley as current, satisfied customers. </li></ul><ul><li>  The CEO of 1-2-3 Company, after reading the article, concluded these were the type of customers he wanted purchasing products from his company. Upon the request of the CEO, sales representatives for the 1-2-3 Company contacted Terry and Riley and encouraged them to become customers of 1-2-3 instead of A-B-C. Upon being offered lower prices and greater value, both customers discontinued purchasing from A-B-C and began buying from 1-2-3. </li></ul><ul><li>Terry Eggers and Riley Chadwick have been white-collar, professional employees of the A-B-C Company for the last four years. Recently a local newspaper published an article about the success of the A-B-C Company and mentioned the contributions of Terry and Riley. </li></ul><ul><li>  The CEO of 1-2-3 Company, after reading the article, concluded these were the type of people he wanted working at his company. Upon the request of the CEO, recruiters for the 1-2-3 Company contacted Terry and Riley and encouraged them to come to work for 1-2-3. Upon being offered greater pay and responsibility, both employees resigned from A-B-C and began working for 1-2-3. </li></ul>
    7. 10. Results <ul><li>Customer Poaching Scenario : </li></ul><ul><li>7% Rated the Behavior Unethical </li></ul><ul><li>Employee Poaching Scenario : </li></ul><ul><li>48% Rated the Behavior Unethical </li></ul><ul><li>“Misconduct” </li></ul><ul><li>“Property Rights” </li></ul><ul><li>“Broke THE Code” </li></ul>
    8. 11. Let’s Take Misconduct Off the Table <ul><li>Unfair Competition </li></ul><ul><li>Deception (Rusing, Deceiving the Candidate) </li></ul><ul><li>Theft (company directories) </li></ul><ul><li>Misrepresentation </li></ul><ul><li>Hiring Solely to Harm </li></ul>
    9. 12. <ul><li>Misappropriation of Trade Secrets </li></ul>Let’s Take Misconduct Off the Table
    10. 13. <ul><li>Inducement of Breach of Employment Contracts </li></ul><ul><li>Non-solicitation agreements </li></ul><ul><li>Non-disclosure agreements </li></ul><ul><li>Non-compete agreements </li></ul><ul><li>Invention assignments </li></ul>Let’s Take Misconduct Off the Table
    11. 14. So What’s Left? <ul><li>“Those are MY EMPLOYEES you are hiring!! </li></ul><ul><li>(Property Rights) </li></ul><ul><li>“Violation of Honor” </li></ul><ul><li>(Breaking the Code) </li></ul>
    12. 15. Origins of Property Rights Over Employees, Their Labor, and Their Human Capital <ul><li>Roman Law </li></ul><ul><li>Medieval English Law </li></ul><ul><li>U.S. Law (Colonial to early 1900’s) </li></ul>
    13. 16. Roman Law <ul><li>Pater Familias </li></ul><ul><li>Absolute Authority </li></ul><ul><li>Wife </li></ul><ul><li>Children </li></ul><ul><li>(non-slave) Household Servants </li></ul>
    14. 17. Medieval English Law <ul><li>1348 – Bubonic Plague (Black Death) </li></ul><ul><li>Killed 50% of English Laborers </li></ul><ul><li>1349 - Ordinance of Labourers </li></ul><ul><li>Employers could take legal action against other employers for enticement whether employees were bound by contract or not </li></ul>
    15. 18. U.S. Law (Colonial) <ul><li>Indentured Servitude </li></ul><ul><li>50% to 66% of all European Immigrants to Colonial America Were Indentured Servants </li></ul><ul><li>Article IV, Section 2 of the Constitution Covered How to Extradite Indentured Servants that Crossed State Lines </li></ul>
    16. 19. U.S. Law (1700’s thru 1800’s) <ul><li>Common Law Enforcement of Prohibitions Against Enticement </li></ul><ul><li>Employer-Employee Relationship Treated As Master and Servant (Contracted and At-Will Employees) </li></ul><ul><li>Used to Control Labor Mobility of Blacks After the End of Slavery </li></ul><ul><li>Thacker Coal v. Burke (1906) </li></ul>
    17. 20. “Poaching Violates an Unwritten Code of Business” <ul><li>Without the Legal System to Deter Enticement, Employers Took Things Into Their Own Hands </li></ul><ul><li>Easily Found A Dozen Examples of “Gentleman’s Agreements” in the Academic Literature and Popular Press </li></ul>
    18. 21. “Poaching Violates an Unwritten Code of Business” <ul><li>Waltham Watches (Civil War Era Manufacturer) </li></ul><ul><li>KPMG, Deloitte & Touche, Ernst & Young, and PriceWaterhouseCoopers (2005) </li></ul>
    19. 22. SO WHAT?! This is What People “Think;” Not What is Right & Wrong <ul><li>Misconduct </li></ul><ul><li>Property Rights </li></ul><ul><li>Breaking the Honor Code </li></ul>
    20. 23. Fine Grained Analysis <ul><li>Current Employer </li></ul><ul><li>Current Employee </li></ul><ul><li>Prospective Employer </li></ul>
    21. 24. What Are the Ethical Implications of a Prospective Employer Identifying, Contacting, Soliciting, and Attempting to Hire a Currently Employed Person? Current Employee-Prospective Employer
    22. 25. Does a Currently Employed Person Violate Any Ethical Obligations When She Considers or Accepts Unsolicited Offers for Outside Employment? Current Employee-Current Employer
    23. 26. Current Employee-Current Employer <ul><li>Current Employee-Organization </li></ul><ul><li>Current Employee-Immediate Supervisor </li></ul>
    24. 27. Current Employee-Current Employer <ul><li>Current Employee-Organization </li></ul><ul><li>Market/Above Market Pay and Benefits </li></ul><ul><li>Training Investments Not Immediately Recouped </li></ul><ul><li>Employment During the Learning Curve </li></ul><ul><li>Employment During Economic Fluctuations </li></ul><ul><li>Retaining Employees Even Though Lower Cost, More Skilled People Apply </li></ul>
    25. 28. Current Employee-Current Employer <ul><li>Current Employee-Supervisor </li></ul><ul><li>Staying in a job because of loyalty to a boss would be like staying in prison because you’ve not been able to repay all the kindness shown to you by one of the guards. </li></ul>
    26. 29. Current Employer-Prospective Employer
    27. 30. Current Employer-Prospective Employer
    28. 31. Current Employer-Prospective Employer <ul><li>Does a prospective employer face any ethical obligations when deciding whether to laterally hire an employee from another firm? </li></ul>
    29. 32. Inter-Organizational Relationships <ul><li>Joint Venture </li></ul><ul><li>Consortia </li></ul><ul><li>Alliance/Network </li></ul><ul><li>Trade Association </li></ul><ul><li>Labor or Product Market Competitor </li></ul><ul><li>Just Another Business </li></ul>
    30. 33. Ethics of Lateral Hiring <ul><li>Why People Think it is Unethical </li></ul><ul><li>Misconduct </li></ul><ul><li>“Property” Rights </li></ul><ul><li>Unwritten Codes of Conduct </li></ul>
    31. 34. Ethics of Lateral Hiring <ul><li>Fine-Grained Analysis of Ethical Issues </li></ul><ul><li>Employee-Prospective Employer </li></ul><ul><li>Employee-Current Employer/Supervisor </li></ul><ul><li>Current Employer-Prospective Employer </li></ul>
    32. 35. Addressing Concerns of Your Hiring Managers <ul><li>Use a Term Without All the Baggage: Lateral Hiring </li></ul><ul><li>Poaching means “To take or appropriate unfairly or illegally” </li></ul>
    33. 36. Addressing Concerns of Your Hiring Managers <ul><li>Why is He/She Reluctant to Recruit People from Other Firms? </li></ul><ul><li>“Are you worried I might use tactics that are not fully ethical?” </li></ul><ul><li>“Do you feel that companies have exclusive rights to employee relationships?” </li></ul><ul><li>“Are you worried that lateral hiring violates some unwritten code?” </li></ul>
    34. 37. Addressing Concerns of Your Hiring Managers <ul><li>Is There an Implicit or Explicit Agreement Between Your Company and the Target? </li></ul><ul><li>Supplier, Joint Venture Partner, Consortium Partner (contractual relations and joint ownership) </li></ul><ul><li>Network or Alliance (no ownership, less specified contract) </li></ul><ul><li>Trade Association </li></ul><ul><li>Interlocking Boards </li></ul><ul><li>Direct Competitor </li></ul>
    35. 38. Conclusion <ul><li>Jewish Ethical Tradition </li></ul><ul><li>Babylonian Talmud – Prohibitions against purchasing a piece of land when someone else is negotiating to purchase it. </li></ul><ul><li>Tosafot Commentary (12-13 th Century) – Extrapolated this ruling to the hiring of already employed workers. Religious tutors are the exception. Not readily available, so they are fair game </li></ul>
    36. 39. Conclusion <ul><li>Is there a community that will be disrupted by lateral hiring? </li></ul><ul><li>Are the members of this community “tight” enough that there might be implicit or explicit agreements against lateral hiring? </li></ul><ul><li>Do the benefits of good relations among community members outweigh the benefits of hiring a particular individual? </li></ul><ul><li>Are these skills available somewhere else at a similar cost? </li></ul>
    37. 40. Any Questions??

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