[ASK HN] When is it OK as an employee to refuse an acqui-hire?
... and just leave.
9 comments
Surely that's the employee's prerogative? Nobody is forced to work anywhere. It's the job of the company to retain them by providing good working conditions and maintaining a mutually beneficial business relationship.
If they left, that relationship failed. Why would you question if that is OK or not?
If they left, that relationship failed. Why would you question if that is OK or not?
As I'm told by my company that me leaving would break the deal for everyone. That's not what I want, but it's also not a good deal for me (especially compared to other offers I get)
It is very likely that you were named in one of the acquisition documents as a key employee. This can mean that your leaving would, literally, stop the deal. I was in a similar position about 10 years ago. I was a key employee during the acquisition and subsequent merger of a business and I was named as such in the acquisition documents. However, while I was offered a relatively ok position with the new company, many other companies were offering me better opportunities.
One thing you must understand about the sale of a business is everything is very quiet because everyone is afraid of being screwed over. The company you work for wants the sale to go through and to have their exit be fruitful after many years of work. The company buying your company would like to get all of the assets, of which you are one, and make the new entity profitable for them in some way. You want to be treated well and see an exit that you believe you deserve, and so on. This is a tough balancing act and unfortunately, not a situation most people treat very honestly. I was there! I know how you feel.
What I did was stayed until the documents were signs. I was officially an employee of the new company for one day. The companies were officially (from a legal standpoint) merged. I then went to my new bosses and said "Now that the companies are merged, I need you to make this right for me by giving me X, Y, and Z." They said, "No way, you have a job, get back to work." I then packed up my stuff and left to one of my other job offers. I got what I wanted. The company I had worked for got the exit they wanted. The new company wasn't very happy but never the less got the merger they paid for.
At any rate, your milage may vary. Situations like this suck! But remember deep down this is business. Do what you need to do to make yourself and your family or whatnot comfortable and happy.
One thing you must understand about the sale of a business is everything is very quiet because everyone is afraid of being screwed over. The company you work for wants the sale to go through and to have their exit be fruitful after many years of work. The company buying your company would like to get all of the assets, of which you are one, and make the new entity profitable for them in some way. You want to be treated well and see an exit that you believe you deserve, and so on. This is a tough balancing act and unfortunately, not a situation most people treat very honestly. I was there! I know how you feel.
What I did was stayed until the documents were signs. I was officially an employee of the new company for one day. The companies were officially (from a legal standpoint) merged. I then went to my new bosses and said "Now that the companies are merged, I need you to make this right for me by giving me X, Y, and Z." They said, "No way, you have a job, get back to work." I then packed up my stuff and left to one of my other job offers. I got what I wanted. The company I had worked for got the exit they wanted. The new company wasn't very happy but never the less got the merger they paid for.
At any rate, your milage may vary. Situations like this suck! But remember deep down this is business. Do what you need to do to make yourself and your family or whatnot comfortable and happy.
Great, insightful reply from somebody who's been there.
As someone who has not been there and has zero experience in this, I'm left wondering whether you had more leverage to ask for "X,Y, and Z" before the deal closed. Not from the acquirer (avoid risking the deal), but from your employer. Surely if you explained the situation and how it is relatively unfair from your perspective, they might be able to negotiate on your behalf?
As someone who has not been there and has zero experience in this, I'm left wondering whether you had more leverage to ask for "X,Y, and Z" before the deal closed. Not from the acquirer (avoid risking the deal), but from your employer. Surely if you explained the situation and how it is relatively unfair from your perspective, they might be able to negotiate on your behalf?
Great question! And yes I actually did do that. However the owner of the company I was working for (the company that was being acquired), was not helpful at all. We were quite good personal friends from high school. What happened was unfortunate. We had really turned his company around together and made some great strides in a short period of time. We had talked about my exit from the company from the very moment I arrived. However, when the time came to be acquired he became rather greedy. He even said to me at one point, "Your portion shouldn't have to come out of my hide."
At any rate, the relationship deteriorated, which is not uncommon when a company is being bought or sold. We kept our smiles on until the acquisition was complete.
At any rate, the relationship deteriorated, which is not uncommon when a company is being bought or sold. We kept our smiles on until the acquisition was complete.
Really appreciate your candid reply. That's a shame. In the end I imagine people regret forsaking relationships for material gains, but greed is a powerful force.
Have you participated in startups since then? Did you take any extra precautions after this experience?
Have you participated in startups since then? Did you take any extra precautions after this experience?
He and I have, since that time, made up. Which is a nice thing! But yes, greed really ruins things. It is quite powerful.
I have been involved in start ups in two ways in the mean time. First, I have built up and sold my own small start up. This was much easier though as I was the sole owner and employee. Throughout my time building it up I did occasionally hire contractors and consultants on a 1099 basis. Overall, this made selling the company and assets a whole lot easier.
Second, I have worked for start ups, quite a few actually. But at this point I actively will not take an equity stake in any start up I work for. I always work hourly and get paid my standard rate for any work produced. In this time I have been involved with two start up sales. They were much easier on me, the owners, and the acquirers. Basically, I had been paid all along what I felt was fair so I didn't try to get anything out of the arrangement as it was being sold. I could be very focused on the owners best interests and not my own. In the end, both gave me substantial bonus amounts for my help and trouble and we all walked away happy. I also contracted with both of the acquirers after the fact in these cases. Again, everyone was quite happy.
I have been involved in start ups in two ways in the mean time. First, I have built up and sold my own small start up. This was much easier though as I was the sole owner and employee. Throughout my time building it up I did occasionally hire contractors and consultants on a 1099 basis. Overall, this made selling the company and assets a whole lot easier.
Second, I have worked for start ups, quite a few actually. But at this point I actively will not take an equity stake in any start up I work for. I always work hourly and get paid my standard rate for any work produced. In this time I have been involved with two start up sales. They were much easier on me, the owners, and the acquirers. Basically, I had been paid all along what I felt was fair so I didn't try to get anything out of the arrangement as it was being sold. I could be very focused on the owners best interests and not my own. In the end, both gave me substantial bonus amounts for my help and trouble and we all walked away happy. I also contracted with both of the acquirers after the fact in these cases. Again, everyone was quite happy.
If you're so important then they should be offering you $$$ that you would have to be crazy to refuse. If they're not, then something is up. And quite frankly it's bullshit to put that kind of pressure on someone who is not actually driving the deal. I dunno, my spidey-senses are tingling.
Yes, it's definitely not easy to live, all the more as you don't have all the insights and aren't sure to know/understand everything at stake.
If you're necessary to the deal going through, then you should have been consulted when that first came to light.
I suspect that if you are part of the deal, if you wanted to work for the acquiring company, you could have already gotten a job there long ago. Clearly they were not your first choice of places to work. The terms that are being offered don't change that, and perhaps no terms can.
That's o.k.
I suspect that if you are part of the deal, if you wanted to work for the acquiring company, you could have already gotten a job there long ago. Clearly they were not your first choice of places to work. The terms that are being offered don't change that, and perhaps no terms can.
That's o.k.
That's a lot of pressure to put on you! If you are really that special an employee, you should ask yourself if there is anything that would convince you to stay. It sounds like you have a great negotiating position. Often people---especially programmers---feel uncomfortable asking for what they want. If the current deal isn't benefiting you personally and you're that important, then tell them what it would take to keep you.
If there is really nothing at all that would make you stay, then I don't think you're obliged to stick around. But you might want to talk with a spouse/friend/family member before making that decision.
Good luck!
If there is really nothing at all that would make you stay, then I don't think you're obliged to stick around. But you might want to talk with a spouse/friend/family member before making that decision.
Good luck!
But it's not you breaking the deal! It is entirely them breaking the deal for everyone by fucking you over.
There is some package of wage and conditions that you would accept. If they're not offering that then it's entirely on them if you leave, not you.
There is some package of wage and conditions that you would accept. If they're not offering that then it's entirely on them if you leave, not you.
Corporate loyalty is dead. Your employer would not hesitate to let you go in an instant--destroying your livelihood in the process--if it meant better ROI for them. Why show anything resembling loyalty in return?
If the acquisition deal hinged upon you staying and if you want to go, then too bad. The deal is off. That's not your concern. If that means that your (former) employer crumbles, then so be it.
If the acquisition deal hinged upon you staying and if you want to go, then too bad. The deal is off. That's not your concern. If that means that your (former) employer crumbles, then so be it.
Ask them to make a better offer. If they can't/won't do that for you, why would you be expected to make a sacrifice for them?
Regardless, your old company can't compel you to go work for a new employer. Morally or legally.
Alternately, what's to stop you from accepting the deal and then leaving in 4-6 months anyway?
Regardless, your old company can't compel you to go work for a new employer. Morally or legally.
Alternately, what's to stop you from accepting the deal and then leaving in 4-6 months anyway?
If you have a specific job offer from someplace else that is more than you would get by staying, take it! Go!
When I recently switched from a startup for a 30% raise, the CEO was pretty hostile. It actually made me feel better about leaving.
If you want to be polite, give them a chance to counter-offer, but you already told them that you thought you were underpaid, so you don't owe them that.
Also, if you get an offer that says "You get $X when the merger closes.", what happens if the deal falls through? What happens if the close date gets pushed back for a year? Remember the time value of money; you would have been better off taking the other offer if that happens.
When I recently switched from a startup for a 30% raise, the CEO was pretty hostile. It actually made me feel better about leaving.
If you want to be polite, give them a chance to counter-offer, but you already told them that you thought you were underpaid, so you don't owe them that.
Also, if you get an offer that says "You get $X when the merger closes.", what happens if the deal falls through? What happens if the close date gets pushed back for a year? Remember the time value of money; you would have been better off taking the other offer if that happens.
Wow, that's a hell of a starting negotiation position. Ask them for a little over what you would actually like out of the deal. It sounds like they really can't turn you down.
There's a lot of guilting people into taking bad deals in startups. At least that's my experience.
I've seen it happen numerous times, and experienced it.
I've seen it happen numerous times, and experienced it.
Interesting. The question for sure is to know what is a bad deal. It may be very personal and just depend on the position offered (+ you never know what others/founders are actually getting).
>me leaving would break the deal for everyone
Will your compensation be > SUM( everyone's compensation)?
Will your compensation be > SUM( everyone's compensation)?
Always. It's always okay.
There might be ramifications, and it's up to you to run through the calculus of whether that means more to you than getting out, but if you want out and you're fine with the results, go for it.
There might be ramifications, and it's up to you to run through the calculus of whether that means more to you than getting out, but if you want out and you're fine with the results, go for it.
Thanks for your answer. It's definitely complex as a situation, and never easy to know to what extent what you're being told is true -- hence, if you're really breaking the deal or not.
If you're part of the deal, then it's as much your deal as anyone else's. What makes a deal a deal and not a done deal is that people can walk away.
I would recommend taking good deals (based on your definition of "good") and declining bad deals on the converse. The key point of a deal is that it's all arm's length in theory and in practice hand-shake deals are predicated on square dealing. Square dealing in turn is predicated on nobody claiming "you owe me" when the debt is not some piece of another square deal. The square deal of being an employee is that you show up and work in exchange for a check that doesn't bounce.
As others have suggested, maybe you do a favor that helps someone you know get rich. Maybe you don't for any one of a number of reasons, e.g. the person needing the favor isn't going out of their way to make you rich or happy or whatever. This kind of change is stressful. There's nothing wrong with taking care of yourself.
So, in my opinion, it's ok either way. There are consequences to either decision and making the deal go through may not be in your interest. Clearly making it go through is not slam-dunk obviously to your benefit.
Good luck.
I would recommend taking good deals (based on your definition of "good") and declining bad deals on the converse. The key point of a deal is that it's all arm's length in theory and in practice hand-shake deals are predicated on square dealing. Square dealing in turn is predicated on nobody claiming "you owe me" when the debt is not some piece of another square deal. The square deal of being an employee is that you show up and work in exchange for a check that doesn't bounce.
As others have suggested, maybe you do a favor that helps someone you know get rich. Maybe you don't for any one of a number of reasons, e.g. the person needing the favor isn't going out of their way to make you rich or happy or whatever. This kind of change is stressful. There's nothing wrong with taking care of yourself.
So, in my opinion, it's ok either way. There are consequences to either decision and making the deal go through may not be in your interest. Clearly making it go through is not slam-dunk obviously to your benefit.
Good luck.
I don't think you would have anything to be ashamed about for leaving the company, even if it blows up the deal. Of course, that doesn't mean that it won't make your bosses/coworkers angry or disappointed, and there is some value in having good relations with ex-coworkers.
If more compensation or a different role at the new company would change your mind, it's definitely worth having that conversation. In the event that you can't reach a deal that makes you enthusiastic about going along with the acqui-hire, making some small sacrifices to help the deal go through is probably worth it to preserve relationships (like trcollinson did by quitting the day after the close instead of the day before).
If you decide to shoot for the bare minimum, make sure you know what it will take to make everybody at the current company happy. You wouldn't want to stay an extra month in order to quit the day after the deal closes only to discover that the owners don't get their payday unless you stay on for two years after the close and they end up pissed at you anyway.
If more compensation or a different role at the new company would change your mind, it's definitely worth having that conversation. In the event that you can't reach a deal that makes you enthusiastic about going along with the acqui-hire, making some small sacrifices to help the deal go through is probably worth it to preserve relationships (like trcollinson did by quitting the day after the close instead of the day before).
If you decide to shoot for the bare minimum, make sure you know what it will take to make everybody at the current company happy. You wouldn't want to stay an extra month in order to quit the day after the deal closes only to discover that the owners don't get their payday unless you stay on for two years after the close and they end up pissed at you anyway.
I just want to point out an important distinctions between a pre and post acquisition deal. Previous to an acquisition being complete it is entirely possible and very common for the acquirer to stipulate that a certain employee or set of employees must stay with the company throughout the acquisition. Before money, stock, and assets have changed hands almost anything can go. Both sides can (and often do) back out of the agreement for any number of reasons. The reason many companies have a "Quiet Period" during an acquisition is so that employees don't panic and leave, ruining the deal. Frankly, this company probably shouldn't have shared the acquisition with the OP is at all possible.
However, it is very uncommon to stipulate payment (or vestment) on a particular employee or a group of employees staying AFTER the acquisition is complete, at least in the US. This is because of anti-coercion laws. There are a number of laws that protect a worker from being held captive (via liability) to a company. If I were a previous owner who's previous employee left a new company one day after the sale and the new owner said "Well, you don't get paid now," it would be an easy argument to say "They have the right to leave and it was you who lost them, the liability is on you."
If the laws did not protect from such then you would see an amazing level of scam which could go something like this. The acquiring company would stipulate that the price of the purchase of the acquired company was based on an employee being retained. The acquiring company would then tell that employee to quietly (under the table, without anyone knowing) leave a few days after acquisition. The acquiring company would then say, "See! That employee didn't stay so you don't get paid (as much|anything) anymore!"
That being said, this is why so many lawyers are involved with contracting the sale of businesses. I have seen buyers attempting to stipulate payment on some really crazy things. I have seen sellers pull the plug for some other really silly stipulations. It's usually quite the circus to watch.
However, it is very uncommon to stipulate payment (or vestment) on a particular employee or a group of employees staying AFTER the acquisition is complete, at least in the US. This is because of anti-coercion laws. There are a number of laws that protect a worker from being held captive (via liability) to a company. If I were a previous owner who's previous employee left a new company one day after the sale and the new owner said "Well, you don't get paid now," it would be an easy argument to say "They have the right to leave and it was you who lost them, the liability is on you."
If the laws did not protect from such then you would see an amazing level of scam which could go something like this. The acquiring company would stipulate that the price of the purchase of the acquired company was based on an employee being retained. The acquiring company would then tell that employee to quietly (under the table, without anyone knowing) leave a few days after acquisition. The acquiring company would then say, "See! That employee didn't stay so you don't get paid (as much|anything) anymore!"
That being said, this is why so many lawyers are involved with contracting the sale of businesses. I have seen buyers attempting to stipulate payment on some really crazy things. I have seen sellers pull the plug for some other really silly stipulations. It's usually quite the circus to watch.
You have great negotiating leverage.
There is some $$ where you would be an idiot to leave. Ask for that $$. If you don't get it, leave.
If they delay and stall, interpret the answer as "NO".
Start interviewing.
There is some $$ where you would be an idiot to leave. Ask for that $$. If you don't get it, leave.
If they delay and stall, interpret the answer as "NO".
Start interviewing.
Ask a simple question: "almost always". Keep your word. That's the only thing you need to remember.
I would be transparent. Ask for and negotiate for what you want _up front_, not after the fact. Back it up with evidence based on your other offers, and make it clear that your willing to walk, rather than compromise for something less.
Why treat yourself like a slave for partners who don't care about your interests?
Remember, your company's lawyers are not your lawyers. They are not looking out for your interests, rather the company's interests.
It sounds like you should have a lot of leverage here to get what you want though. You need to negotiate with your employer, or get an agent to do it on your behalf.
They way you describe it sounds like your being sold down the river.
Why treat yourself like a slave for partners who don't care about your interests?
Remember, your company's lawyers are not your lawyers. They are not looking out for your interests, rather the company's interests.
It sounds like you should have a lot of leverage here to get what you want though. You need to negotiate with your employer, or get an agent to do it on your behalf.
They way you describe it sounds like your being sold down the river.
Always OK, you need to look out for yourself. But if there's a number that would make it worth staying you should tell them. (And aim high, if you're that vital you might get it.)
Title should be prefixed with [ASK HN] :)
Also, Always. Especially if the want to change their contract.
Also, Always. Especially if the want to change their contract.
Sorry, changed that ;)
Even though it may break the deal for everyone else? In the meantime, you can't know if it will.
Even though it may break the deal for everyone else? In the meantime, you can't know if it will.
You aren't everyone else. You are you. Do what is best for you.
I would also explore if there is a way to make the deal a better option for you. Negotiate. If you've explored that, and it's still not, then walk away.
I would also explore if there is a way to make the deal a better option for you. Negotiate. If you've explored that, and it's still not, then walk away.
Yes. This sounds like a tactic to try to guilt you into taking a deal that is not in your best interest.