Ask HN: Our only salesperson was working for a competitor. Advice? | Hacker News Reader

Ask HN: Our only salesperson was working for a competitor. Advice?

13 pointsbetrayawayed5558 comments

We recently discovered that our sole sales employee - a remote, highly trusted team member - had been secretly working with a competitor for over 16 months, possibly longer, potentially spanning their entire tenure with us. This was all while under a full-time employment agreement with a non-compete clause (covering both during and post-employment).

We’re a small Canadian B2B SaaS company (< 20 people), incorporated in one province, with this employee based in another. They attended trade shows representing the competitor (while claiming they were there on our behalf or calling in sick). They serviced inbound leads for the competitor during our workday, likely used our ZoomInfo subscription for their benefit, and were in a position to divert leads without our knowledge. The list goes on.

We were genuinely on good terms - we liked them, trusted them, and thought we had a solid relationship. The only concerns were performance-related, which we had chalked up to market conditions.

As we were preparing to let them go, they caught wind and rage-quit, with claims of harassment and constructive dismissal.

Fellow founders: What would you do? Move on? Investigate further? Settle? Escalate? Have you dealt with a trusted employee quietly working for a competitor?

I'm not a lawyer but have talked to a few founders who faced similar situations, ie. employee breaks the law or there's a substantial breach of ethics.

1) Document your case and speak to your lawyer. Pray they didn't do anything that would affect your customers/clients that could cause legal issues for you. I assume you're reviewing all their communications.

2) In most cases for early-stage companies, it's probably not worth it financially to pursue the case. It'll end up eating a lot of time, energy, and money that could've gone elsewhere. In the very least, documenting your case and throwing out some low-cost tactics could be useful for defensive purposes.

3) The priority at this point, I assume, is to re-establish your sales op. I would reach out to your professional networks and let them know not to work with this individual. Recruit your investors' networks as well, if any. The goal is to find good ways to protect yourself and your friends/partners.

4) Use the crisis to rally the team! You've been debuffed all this time! Turn this into a gift.

5) This sort of stuff happens all the time in one form or another. And it'll happen again. Anecdotally, I've found that it's happening more now with remote work where it's just harder to vet people. And if you're working cross-cultures, it can be even more difficult. Don't beat yourself up too much and learn from it.

Good luck!

Thanks for the input.

Spoken to the lawyer and their advice roughly matches yours.

It's quite the experience though since we had considered the person quite close and trusted. It feels a little like getting cheated on by a spouse.

A 2nd job is one thing. But one for a competitor with the same customer base is a whole other level.

I understand the feeling. And sometimes you start to question your own judgement of people. I guess just keep in mind to not let the bad ruin the good.

In Canada, there's a higher level of baseline trust in society, so it's shocking to experience things like this. In other parts of the world, this is just normal everyday business.

Talk to your attorney.

Maybe focus on the competitor because they have insurance.

Going forward, maybe consider sales a job for the founders because outsourcing sales requires incentivizing solely by money and your former salesperson’s behavior is the kind of behavior common when money is the sole motivation.

Hopefully, you still have your shirt even if the sleeves are shorter.

Tactically we wonder if leaving them at the competitor at this stage is more useful. Let them work their 'magic' for them full time now.

It's possible the other company was unaware. Though, we wonder how. The company has an active social media presence and our sales person did as well where they indicated they worked for us.

Agree regarding sales + outsourcing.

Tactically we wonder if leaving them at the competitor at this stage is more useful.

That might be too clever by half.

It is a big assumption that the other company was less aware than you. Because it makes you feel less taken advantage of, it is particularly attractive.

There’s a reason you have an attorney. It is exactly for situations like this.

It might not be worth substantial legal action. But it also is not worth trying to do what happened to you to another business. Even a competitor.

If you play that game, it is easy to say you deserved what happened.

> maybe consider sales a job for the founders because outsourcing sales requires incentivizing solely by money and your former salesperson’s behavior is the kind of behavior common when money is the sole motivation

If founders took that approach, they'd never hire anyone to do anything. If anything, salespeople are probably less likely to surreptitiously work for competitors than most jobs, because there's generally as much financial upside to doing a job well as doing two jobs badly, they're much more likely to get found out, and companies fire much faster for underperformance (and are much more likely to involve lawyers if they discover someone is moonlighting for their competitor).

Founders should do sales if they're good at sales and like doing it

IANAL but you should talk to one.

A big question is: Did the competitor know and what part did they play? If they did know, I would definitely talk to a lawyer about that and pursue damages.

Reply on news.ycombinator.com