Is it OK to Hire People from Your Friend’s Company? | Hacker News Reader

Is it OK to Hire People from Your Friend’s Company?

bhorowitz.com

48 pointsrazin36 comments

It is worth noting that, as pointed out in http://www.justice.gov/opa/pr/2010/September/10-at-1076.html, the US Department of Justice recently forced 6 prominent high tech companies to start actively recruiting from each other, because failing to do so was anti-competitive.

And that was in a case where they were hiring from each other, but only when approached as was the case in the example.

My attitude is that if your friend is a grown-up and understands how business works, your friendship can last. If your friend is not mature enough to handle the situation, that friendship was probably not worth maintaining. Certainly not at the cost of losing out on a stellar employee who wasn't going to stay with your friend anyways.

Even if you want to be totally Machiavellian about it, the value of a friendship is not necessarily proportional to their maturity.

I have a hard time categorizing that attitude as Machiavellian since it promotes treating all potential recruits the same in the hiring process.

I wasn't categorizing anything, I was just framing my response, which was to this line in particular:

>If your friend is not mature enough to handle the situation, that friendship was probably not worth maintaining.

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

So, what, it's OK to break the laws that protect employees if you're doing it to help a friend?

No, if you read the article, the author ultimately suggests that you proceed with the hire in an open and transparent way -- giving the potential hire a way to back down if they would be uncomfortable with you doing a reference check. The (imho) important part of the article is this:

> "... the best way to deal with these situations is openly and transparently. Once the you become aware of the conflict between hiring the superstar employee and double-crossing your valued friend, 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. Let him know that if he does not want that to happen, then you will stop the process now and keep the process to date confidential. By speaking with your friend before making the hire, you will be able to better judge the relationship impact of hiring her employee. In addition, you may avoid making a bad hire as often candidates who do well in interviews turn out to be bad employees."

To me, that sounds like threatening the candidate to get him to waive his legal rights. I don't like the idea of working for a CEO who would do that.

Ah, I hadn't looked at it that way -- interesting perspective. I looked at it as someone who was between two desires and seeking resolution by increasing communication (which is generally a strategy that I condone,) however this might adversely impact the candidate so the hiring ceo gives them the opportunity for an out first. I didn't take this as a threat at all, but rather a measured approach that allows all parties to be on even ground and have their input heard.

Right, but the employee is not on equal ground with the two CEOs.

I tend to value my friends and my own moral code much more than I value the moral code of lawmakers. I won't say it's OK to break the law, but when there is a conflict, I will always recommend that you follow your own higher law. Of course, this will also be dependent on the legal risk involved; I wouldn't do time to avoid an [minor] insult to a friend, but I would accept the fine or other slap on the wrist that I expect would be given in this particular case.

I think it's reasonable for one's "higher law" to include hiring fairness and to avoid even the appearance of collusion.

>I tend to value my friends and my own moral code much more than I value the moral code of lawmakers.

We're talking about a law made to protect employees. I don't want to work for a CEO who values his friends over his employees' legal rights.

There's also the point that a CEO who follows this advice risks exposing his company to a lawsuit, which is a violation of his duty to the company's shareholders.

It could be argued that the CEO was doing exactly his duty to the shareholders by protecting a very important relationship. Ben used the word friend but made it very clear that this also meant critical business partners.

Good point.

Some consider the 'law' created by their own freely-exchanged obligations with other people to be coequal to, or even above, the laws from governments. This mindset can sometimes lead to more efficient or moral outcomes, and can also be crucial in limiting the harm of, and eventually overturning, bad governmental laws. So don't expect laws to always, or even mostly, supersede other customs of friendship and interpersonal loyalty.

That's a reasonable moral position, but in this case the outcome is immoral: preventing an employee from changing jobs because the CEO values his friendship with some other CEO.

That depends on the specificity of the employee's skills, and the variety of other options. If the employee's top two options are the companies with close CEOs, maybe the inter-corporate coordination is part of the reason the employee has especially valuable skills. If the employee has other options, the tiny marginal loss from being disqualified from one open position may have been outweighed by the benefits they had previously received by being 'inside the zone or cooperation'. There are too many considerations to offer a pat judgement for all cases.

If giant employers have a no-poaching agreement covering thousands of employees, I can see that being mostly harmful – and also the easiest practice to detect and punish (as with the DOJ action regarding Apple, Google and others). If the no-poaching agreement is limited to a small number of strategically-central people, or a few very chummy smaller-enterprise management teams, its benefits could outweigh the costs.

At the end of the day, laws, like contracts, SLAs, copyrights, EULAs, trademarks, and patents can be viewed from a purely game-theoretic perspective - If I do X then Y will happen. Is it worth Y to me to do X? If so, then I do Y, regardless of whether it means breaking a (contract|EULA|Law|SLA|Patent|Copyright|Trademark).

Also factored into this is the possibility that you may not be caught. And, if you are caught, the maximum damages may not be imposed.

I'm certain that before communicating their enforcement of rules regarding the 70/30 split for all published content on the iPad, that Apple counsel took a long and hard look at the anti-trust laws and made a cost/benefit decision based both on the penalties that they would face, as well as the potential rewards.

Likewise, Ben is just being honest when he says that all sorts of companies have these "Non-Recruit" agreements in place - he's pretty transparent in this article, and just puts it on the table - no pussyfooting around the topic, something that I actually appreciate.

Maybe you don't live in California?

I wonder how a16z would feel about an upstart portfolio company turning down world class talent in the name of friendship? Obviously, don't hire someone if it will sour a relationship that is financially important for your company, but are you really a great entrepreneur/ceo if you're turning away awesome people for some fuzzy feelings you have with another ceo?

I think a16z really really approves of "good guys" - ben horowitz wrote a really inspirational blog post about the HP CEO being sacked and how leaders need a moral compass.

The ecosystem described here strikes me as frighteningly provincial. If you've backed yourself into a niche so small that there are only a few engineers worth hiring (implausible), then your whole company is at risk every time they cross the street.

Some might cite Steve Ballmer's chair-throwing incident, but that was an employee who was a)going to a competitor and not a friend, and b)not likely to change the overall dynamic between the companies.

"If you've backed yourself into a niche so small that there are only a few engineers worth hiring (implausible)"

This isn't that implausible, actually. Hiring is very^2 difficult.

The point is valid though... if it's that difficult for you to hire, you really do have high risk

I totally agree that hiring is difficult, but I don't think it's because there are so few good engineers. Rather, it is because figuring out whether someone will be a good employee within your particular culture in any expedient amount of time is difficult.

Good developers are generally employed and don't stay on the market long when they want/need another job. I've done lots of interviews at my last job, and ALL good candidates were employed at the time and were looking for either more money or better environment (there was one case when company went under and laid off all of their staff).

Is it OK to hire from your friend's company?

Sure, as long as it is totally transparent to everyone. You can't force people to work for you.

Is it OK to recruit from your friend's company?

Definitely not.

The whole post is based on the assumption that if you hire someone from your friend's company, you lose your friend. Maybe I'm just naive, but I think friendship that ends for such a reason is a lousy friendship.

I firmly believe that one should be able to separate business from friendship. For me, this part of the post highlights the flaw in author's reasoning:

Here’s an easy way to think about the dynamic. If your husband left you, would you want your best friend to date him?

The analogy falls flat, because business attachments are not necessarily the same as romantic attachments. Or friendships.

That said, I agree. It can cause trouble. But is your priority running your business, or is it keeping your friendship alive?

The default assumption is that business implies objectivity and logic... at least that was my perspective as an engineer.

However, in practice it seems more often than not... lasting business leaders are highly disposed towards emotion (both towards themselves and others). Combine that with the fact that it's a small world when it comes to relevant leaders... and trading rationality for trust may not burn in the short term, but seems like a bad trade in the long run.

I think this line is brilliant:

> In the end, the social pressure will trump all your brilliant countervailing logic.

This seems to happen often with thinkers, especially when they're trying to justify a decision.

I think it's really useful to consider social pressure as a separate effect - immune to logical discourse - when you deal with human issues.

At the start of his post, Ben Horowitz delineates between between "Important business partners" and "true friends".

The problem with the consensus argument here on HN that "if the other CEO no longer wants to be friends then it was a lousy friendship to begin with" is that we're talking about the former distinction. IE it never was a 'friendship' friendship to begin with.

In other words, it's not that the other CEO is no longer going to have you over for Thanksgiving Dinner but that you may now have strategically pissed of a valuable strategic partner.

Too many variables really to be able to cover a blanket one-size-all rule but I do think I would pass if the employee was in a vital role at a key vendor that would seriously damage my business if the vendor re-negotiated terms or withdrew service. Which they could in spite or even simply out of a perceived new conflict of interest with IP transfer in the hire.

Business is business... it would of course be worse if you were recruiting from your friend's company, but in the example given, the CEO in question had nothing to do with the initial interest and interviewing.

I think the question of how upset the friend is going to be depends on how big the friends company(s) is. A big company is less likely to take it personally than a 5 person team.

That said, if the only reason for not hiring the person is the potential to upset your friend, then you have a moral responsibility to hire that person, come what may.

I would hope that friends would understand that, especially if you can show that you did not head hunt that hire. But people are not always that straight forward.

Hiring from a friend's company is a lot like dating a friend's old girlfriend. It can be totally cool on the surface but totally not cool underneath.

I don't see any problem here. I think the article is making the assumption that people only move jobs when they are seriously upset about where they are. In my experience, that simply isn't true: people move on after a few years anyway, just to get a change of scene and/or to protect against "CV typecasting".

I would not be offended by a "friend" (whether a real personal friend or a valued business associate) hiring one of my staff because the staffer has chosen to move on, nor by the staffer choosing to apply for a job at my friend's company if it was a decent place to work. I suspect the only things that would offend me would be sneaky or otherwise unprofessional conduct, such as if the friend tried to use our relationship to prevent me from making some sort of genuine counter-offer to entice the staffer to stay. Chances are that I would not consider someone who would do that either a personal friend or a valued business associate anyway, though.

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