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> The LinkedIn message went on to say Take-Two was setting up a new studio to keep working on the same game Star Theory had been developing, a sequel to the cul

> The LinkedIn message went on to say Take-Two was setting up a new studio to keep working on the same game Star Theory had been developing, a sequel to the cult classic Kerbal Space Program. Take-Two was looking to hire all of Star Theory’s development staff to make that happen. I'm amazed that the contract Star Theory had with Take-Two didn't have a clause prohibiting Take-Two from poaching employees like this. Edit: A more general question: If I hire a consultancy company to build something for me, would I normally be able to directly hire the employees who did the work? That sounds like the worst possible outcome for a consultancy, so surely contracts prohibit it!? Edit 2: Lots of people responding that anti-competes are always bad, and I don't disagree, but this feels slightly different. How about: Is it ethical for a company to deliberately cause you to be made redundant so they can hire you? (Emailing all employees of a company make it fairly clear it was planned)

WrtCdEvrydy 6y ago
They walked away from the deal... no contract.
- marcinzm 6y ago
  They had a previous contract for the work up to that point.
- ceejayoz 6y ago
  They walked away from the acquisition deal, but this: > the same game Star Theory had been developing certainly means they had an earlier contract.
- ashtonkem 6y ago
  No, they walked away from a buyout deal, they had a contract with take two to develop KSP2.
  - Heliosmaster 6y ago
    From the article, it seems like the contract was ending, and there were talks of a 6mo extension when everything came apart.
    - ashtonkem 6y ago
      Non-solicit agreements often extend well beyond the terms of work, a year or two seem to be common.
PragmaticPulp 6y ago
> If I hire a consultancy company to build something for me, would I normally be able to directly hire the employees who did the work? In my experience, this is one of the main points that legal counsel argues with every contract. If your company is being contracted to do work, your legal counsel will want to add a non-solicitation clause to the contract to prevent the other company from recruiting your employees. If your company is contracting with a smaller company to do work for you, your legal counsel will want to strike any non-solicit clauses so they have the option to hire people out of that company later. If the other company is desperate enough for the contract, they might allow this. Otherwise they'll refuse the work.
RcouF1uZ4gsC 6y ago
> I'm amazed that the contract Star Theory had with Take-Two didn't have a clause prohibiting Take-Two from poaching employees like this. Please don’t use the word “poached” to describe getting employees to voluntarily join your company by offering better compensation. Unlike animal poaching, employee poaching is actually good for the employees being poached. In the name of preventing “poaching” many Silicon Valley companies in the past engaged in an illegal scheme to fix employee wages.
- ceejayoz 6y ago
  I'm not sure you can necessarily call it voluntary if the offer comes paired with "oh and we're bankrupting your current employer".
- marcinzm 6y ago
  >Unlike animal poaching, employee poaching is actually good for the employees being poached. That depends on their negotiation positions. "We're effectively killing your employer, you can join us for 10% less salary or take your luck on the job market." This situation was more akin to a mass prisoner's dilemma than standard poaching.
- Dayshine 6y ago
  > to describe getting employees to voluntarily join your company by offering better compensation Huh? They withdrew the contract from their current employer, making them redundant, then offered them a job. I'm not sure abusing your position of power as sole "client" to bankrupt my employer to hire me counts as "offering better compensation". If not poaching, perhaps coercing, compelling, forcing?
- MattyMc 6y ago
  I don't think people are interpreting the term "poached" as literally as you are. Losing an employee to a competitor is bad for a company, especially bad for a small company, hence the negative connotation.
  - GuiA 6y ago
Cthulhu_ 6y ago
They would, but the consultancy company would want you to buy them out (it has happened with some of my colleagues), and that's not going to be cheap. There's also been at least one instance where people left the company and were rehired by their client during the do-not-compete timeout of a year; in practice, a do-not-compete clause cannot be enforced in a court, and given that the client is several orders of magnitude larger in terms of finances than the consultancy company, a legal battle wouldn't pan out the way they want it to. So the guy took the job and the risk, and he still works there. Probably earns a lot more as well.
- ghaff 6y ago
  >in practice, a do-not-compete clause cannot be enforced in a court Depends. I've known consulting companies that have absolutely enforced them--though the circumstances have usually been around someone setting up their own shop rather than going to a client. The broader issue with non-competes is more chilling effect than than actual enforcement. When I was with a small consulting firm we wouldn't touch anyone who had an even vaguely related non-compete. Just wasn't worth the risk or even the effort/cost of getting a lawyer involved.
Havoc 6y ago
Anti-poaching clauses are basically unenforceable. At most you can add a clause that they may not approach your employees. If the employee is willing to tell a white lie on who approach/hinted at whom that's easily circumvented. Cleanest version I've seen thus far is a financial penalty built in that is probably not enforceable but is carefully calibrated so that it's "fk it just pay it instead of making a legal fuss about it & ruining a good commercial relationship on top of it". Leaves everyone somewhat unhappy but nobody left empty-handed. Both sides saw it as cost of doing business in a way.
- dragonwriter 6y ago
  > Anti-poaching clauses are basically unenforceable. Not as part of a contract for work, otherwise, the entire contract labor market that involves specific payment for customers hiring workers off of the contact would die as customers would just ignore the “unenforceable” restrictions and hire desired employees without the contracted payment to the intermediary firm. Standalone anti-poaching agreements between competing firms are generally unenforceable (and also potentially outright illegal and actionable.)
  - tedivm 6y ago
    > the entire contract labor market that involves specific payment for customers hiring workers off of the contact would die as customers would just ignore the “unenforceable” restrictions and hire desired employees without the contracted payment to the intermediary firm. I've seen this happen over and over again, and I've even been in this situation myself. One of my first subcontracting jobs ended with me being contracted directly by the company I was was subcontracted to, and there was literally nothing that anyone could do (or really even care to do). This doesn't mean the contract labor force is going to die off- generally speaking people who hire contractors want contractors, not employees, for a variety of reasons (financial commitment, not having to manage the HR aspects of the employee, knowing that you can let the contractors go without having to notify the state of a lay off).
privateprofile 6y ago
>> I'm amazed that the contract Star Theory had with Take-Two didn't have a clause prohibiting Take-Two from poaching employees like this. I'm amazed that people sign contracts accepting this kind of restrictions to their lives. That's (fortunately) illegal in the EU country I live in, as it creates artificial barriers in the job "market", i.e. it is illegal to limit people's access to work. Still, cartel practices like not hiring from "friendly companies" abound. >> If I hire a consultancy company to build something for me, would I normally be able to directly hire the employees who did the work? I see contracts imposing restrictions like this all the time where I live, and people sadly just nod and accept, but these clauses never hold up in court as no company has a right to decide where people can or can't work. Having worked as a consultant, I'm repulsed by the idea that I'd need my company's permission to leave and go work for a client. Especially because the provision stinks of "cheaper than actually investing in people retention". If the issue is intellectual property transfer, that's what an NDA is for.
- Dayshine 6y ago
  > Having worked as a consultant, I'm repulsed by the idea that I'd need my company's permission to leave and go work for a client For a large consultancy with many clients, I agree. But when a significant portion of your employer's income is a single client: Are you comfortable with that single client of your employer having a strong incentive to make your job redundant so they can try to hire you under worse terms (as you suddenly lost your job)? You don't need your company's permission, you're unemployed. I guess what I'm thinking is something more along the lines of not hiring employees immediately after making them redundant through your own actions?
  - privateprofile 6y ago
    >> Are you comfortable with that single client of your employer having a strong incentive to make your job redundant so they can try to hire you under worse terms (as you suddenly lost your job)? I understand what you mean, and that situation doesn't seem desirable either, but I think that that is very uncommon when compared to companies trying to retain/squeeze employees using contracts with employment restrictions.
jon-wood 6y ago
Most consultancies defend themselves from this sort of behaviour in two directions. Firstly there'll be clauses in the consulting contract stating that the client can't hire anyone who's worked on their project for [n] months after completion (sometimes with the caveat that they can, but there'll be a recruitment fee due to the consultancy). Secondly employees of the consultancy will have non-compete clauses in their employment contracts stating much the same thing. The interesting bit here is if Star Theory are going out of business then any contracts will presumably become void because one of the signatories has ceased to exist.
- e_y_ 6y ago
  Companies closing their doors doesn't necessarily mean ceasing to exist. Sometimes it ends up in a holding company with one person (a lawyer) to close up any loose ends and liquidate assets. Although in Star Theory's case, their development contract was coming to an end, so it's possible it had already expired at that point. And the contract may have also had certain required metrics like development progress and financial health that would lead to it being terminated in cases where the company was effectively defunct.
yellowapple 6y ago
> A more general question: If I hire a consultancy company to build something for me, would I normally be able to directly hire the employees who did the work? This is common in the enterprise software world, from what I've seen.
vl 6y ago
Another interesting thing is how they managed to acquire assets - somebody had to transfer source code, art, specs, etc. Also, by this locally-optimized move they sacrificed ability to work with other independents in the future, ie top independents will less likely to work with them.

WrtCdEvrydy 6y ago

They walked away from the deal... no contract.

marcinzm 6y ago
They had a previous contract for the work up to that point.
ceejayoz 6y ago
They walked away from the acquisition deal, but this: > the same game Star Theory had been developing certainly means they had an earlier contract.
ashtonkem 6y ago
No, they walked away from a buyout deal, they had a contract with take two to develop KSP2.
- Heliosmaster 6y ago
  From the article, it seems like the contract was ending, and there were talks of a 6mo extension when everything came apart.
  - ashtonkem 6y ago
    Non-solicit agreements often extend well beyond the terms of work, a year or two seem to be common.

PragmaticPulp 6y ago

> If I hire a consultancy company to build something for me, would I normally be able to directly hire the employees who did the work? In my experience, this is one of the main points that legal counsel argues with every contract. If your company is being contracted to do work, your legal counsel will want to add a non-solicitation clause to the contract to prevent the other company from recruiting your employees. If your company is contracting with a smaller company to do work for you, your legal counsel will want to strike any non-solicit clauses so they have the option to hire people out of that company later. If the other company is desperate enough for the contract, they might allow this. Otherwise they'll refuse the work.

RcouF1uZ4gsC 6y ago

> I'm amazed that the contract Star Theory had with Take-Two didn't have a clause prohibiting Take-Two from poaching employees like this. Please don’t use the word “poached” to describe getting employees to voluntarily join your company by offering better compensation. Unlike animal poaching, employee poaching is actually good for the employees being poached. In the name of preventing “poaching” many Silicon Valley companies in the past engaged in an illegal scheme to fix employee wages.

ceejayoz 6y ago
I'm not sure you can necessarily call it voluntary if the offer comes paired with "oh and we're bankrupting your current employer".
marcinzm 6y ago
>Unlike animal poaching, employee poaching is actually good for the employees being poached. That depends on their negotiation positions. "We're effectively killing your employer, you can join us for 10% less salary or take your luck on the job market." This situation was more akin to a mass prisoner's dilemma than standard poaching.
Dayshine 6y ago
> to describe getting employees to voluntarily join your company by offering better compensation Huh? They withdrew the contract from their current employer, making them redundant, then offered them a job. I'm not sure abusing your position of power as sole "client" to bankrupt my employer to hire me counts as "offering better compensation". If not poaching, perhaps coercing, compelling, forcing?
MattyMc 6y ago
I don't think people are interpreting the term "poached" as literally as you are. Losing an employee to a competitor is bad for a company, especially bad for a small company, hence the negative connotation.
- GuiA 6y ago

Cthulhu_ 6y ago

They would, but the consultancy company would want you to buy them out (it has happened with some of my colleagues), and that's not going to be cheap. There's also been at least one instance where people left the company and were rehired by their client during the do-not-compete timeout of a year; in practice, a do-not-compete clause cannot be enforced in a court, and given that the client is several orders of magnitude larger in terms of finances than the consultancy company, a legal battle wouldn't pan out the way they want it to. So the guy took the job and the risk, and he still works there. Probably earns a lot more as well.

ghaff 6y ago
>in practice, a do-not-compete clause cannot be enforced in a court Depends. I've known consulting companies that have absolutely enforced them--though the circumstances have usually been around someone setting up their own shop rather than going to a client. The broader issue with non-competes is more chilling effect than than actual enforcement. When I was with a small consulting firm we wouldn't touch anyone who had an even vaguely related non-compete. Just wasn't worth the risk or even the effort/cost of getting a lawyer involved.

Havoc 6y ago

Anti-poaching clauses are basically unenforceable. At most you can add a clause that they may not approach your employees. If the employee is willing to tell a white lie on who approach/hinted at whom that's easily circumvented. Cleanest version I've seen thus far is a financial penalty built in that is probably not enforceable but is carefully calibrated so that it's "fk it just pay it instead of making a legal fuss about it & ruining a good commercial relationship on top of it". Leaves everyone somewhat unhappy but nobody left empty-handed. Both sides saw it as cost of doing business in a way.

dragonwriter 6y ago
> Anti-poaching clauses are basically unenforceable. Not as part of a contract for work, otherwise, the entire contract labor market that involves specific payment for customers hiring workers off of the contact would die as customers would just ignore the “unenforceable” restrictions and hire desired employees without the contracted payment to the intermediary firm. Standalone anti-poaching agreements between competing firms are generally unenforceable (and also potentially outright illegal and actionable.)
- tedivm 6y ago
  > the entire contract labor market that involves specific payment for customers hiring workers off of the contact would die as customers would just ignore the “unenforceable” restrictions and hire desired employees without the contracted payment to the intermediary firm. I've seen this happen over and over again, and I've even been in this situation myself. One of my first subcontracting jobs ended with me being contracted directly by the company I was was subcontracted to, and there was literally nothing that anyone could do (or really even care to do). This doesn't mean the contract labor force is going to die off- generally speaking people who hire contractors want contractors, not employees, for a variety of reasons (financial commitment, not having to manage the HR aspects of the employee, knowing that you can let the contractors go without having to notify the state of a lay off).

privateprofile 6y ago

>> I'm amazed that the contract Star Theory had with Take-Two didn't have a clause prohibiting Take-Two from poaching employees like this. I'm amazed that people sign contracts accepting this kind of restrictions to their lives. That's (fortunately) illegal in the EU country I live in, as it creates artificial barriers in the job "market", i.e. it is illegal to limit people's access to work. Still, cartel practices like not hiring from "friendly companies" abound. >> If I hire a consultancy company to build something for me, would I normally be able to directly hire the employees who did the work? I see contracts imposing restrictions like this all the time where I live, and people sadly just nod and accept, but these clauses never hold up in court as no company has a right to decide where people can or can't work. Having worked as a consultant, I'm repulsed by the idea that I'd need my company's permission to leave and go work for a client. Especially because the provision stinks of "cheaper than actually investing in people retention". If the issue is intellectual property transfer, that's what an NDA is for.

Dayshine 6y ago
> Having worked as a consultant, I'm repulsed by the idea that I'd need my company's permission to leave and go work for a client For a large consultancy with many clients, I agree. But when a significant portion of your employer's income is a single client: Are you comfortable with that single client of your employer having a strong incentive to make your job redundant so they can try to hire you under worse terms (as you suddenly lost your job)? You don't need your company's permission, you're unemployed. I guess what I'm thinking is something more along the lines of not hiring employees immediately after making them redundant through your own actions?
- privateprofile 6y ago
  >> Are you comfortable with that single client of your employer having a strong incentive to make your job redundant so they can try to hire you under worse terms (as you suddenly lost your job)? I understand what you mean, and that situation doesn't seem desirable either, but I think that that is very uncommon when compared to companies trying to retain/squeeze employees using contracts with employment restrictions.

jon-wood 6y ago

Most consultancies defend themselves from this sort of behaviour in two directions. Firstly there'll be clauses in the consulting contract stating that the client can't hire anyone who's worked on their project for [n] months after completion (sometimes with the caveat that they can, but there'll be a recruitment fee due to the consultancy). Secondly employees of the consultancy will have non-compete clauses in their employment contracts stating much the same thing. The interesting bit here is if Star Theory are going out of business then any contracts will presumably become void because one of the signatories has ceased to exist.

e_y_ 6y ago
Companies closing their doors doesn't necessarily mean ceasing to exist. Sometimes it ends up in a holding company with one person (a lawyer) to close up any loose ends and liquidate assets. Although in Star Theory's case, their development contract was coming to an end, so it's possible it had already expired at that point. And the contract may have also had certain required metrics like development progress and financial health that would lead to it being terminated in cases where the company was effectively defunct.

yellowapple 6y ago

> A more general question: If I hire a consultancy company to build something for me, would I normally be able to directly hire the employees who did the work? This is common in the enterprise software world, from what I've seen.

vl 6y ago

Another interesting thing is how they managed to acquire assets - somebody had to transfer source code, art, specs, etc. Also, by this locally-optimized move they sacrificed ability to work with other independents in the future, ie top independents will less likely to work with them.