logo
Project Fellow
 

 Fellow Weekly -  Issue 109

WHAT'S THE LAW

  

 

 
Encouraging intelligent and entertaining debate at your Shabbat table.
 
Fellow Weekly raises issues of business law and ethics through lively emails by featuring your real-life scenarios answered by our leading authorities and professionals.

      

 

 

 

 

 

 

 

  

      CLICK HERE FOR THIS ISSUE'S PDF 

 

   

-

 

 Spearheaded by Rabbi Myer J. Schwab, Dean of Bais Yaakov of Denver

 

THE RAV SHIMON SCHWAB ZT"L

CHOSHEN MISHPAT CHINUCH INITIATIVE FUND

 

CLICK here TO JOIN OUR SACRED MISSION 

 

Click here and help Project Fellow further ethics education across the globe.

Case # 212 Imprisoned Defender

 

Real Life Scenario: What would the halacha have been in this case pulled from an actual contemporary court case?

 

 
 

Edi K. is unfortunately sitting behind bars in a Florida penitentiary. The culprit of an escalating number of break-ins, Edi endeavored to put an end to his misery by booby trapping the bottom of his chimney stack. The next intruder who climbed down the stack never made it out.

 

What is the law?

 

 

 

Please email us with your comments and answers at weekly@projectfellow.org

Read next week's issue for the answer!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Case # 210/211: Sahara Air & Coca Cola: A Battle for Talent

  

Sahara

 

 

Jetways Airlines invested time and money into Teddy Martins, a promising and skilled airline captain, sending him through a rigorous sixth-month New Generation Aircraft Training Program. Upon his successful completion of the intensive and highly specialized course, Jetways promoted him to man the next generation B777-300LR Fly-By-Wire, a futuristic and technologically advanced craft.

 

Four months later Sahara Air, Jetways' rival airline, poached Teddy by enticing the now-expert pilot with a $30,000 raise in pay plus other perks. Teddy was soon under their wings!

 

Jetways responded by suing Teddy in Indian court for joining Sahara Airways.

 

 

Coke 

 

In May 1998, Pepsi filed a petition against the Coca Cola Company, alleging that Coke had entered into a conspiracy to disrupt its business operations. Pepsi accused Coke of luring away three of Pepsi's key sales personnel from Kanpur, going as far as to offer at least one of the employees the Indian equivalent of $20,714 a year in pay and perks, almost five times what Pepsi was paying him.

 

The other sales personnel, who were earning the equivalent of $994 a year, were offered a salary equivalent to $3852. Many truck drivers in the Goa bottling plant, who were getting $51 a month, moved to Coke, where they received $207 a month.

 

Pepsi claimed that these tactics were causing immense damage, as those employees who had switched over were carrying with them sensitive trade-related information.

 

Wondering why she was experiencing a lull in her employment by the Greens, [See Issue 92]

 

What's the Law? 

  

 

The Answer

We present you here with a concise ruling. For a more intricate elucidation, please see the detailed explanation below.

Beit Din would not penalize Sahara. Nonetheless, Teddy may not breach a contract in favor of alternative emplyment.

 

If workers are hard to come by, so long as Coke does not cause Pepsi to fold, Coke could not be penalized for poaching Pepsi's workers. In both cases, the local legality of non-compete clauses (which varies from locale to locale) must be respected (Please refer to Detailed Explanation).

 

 

 

Detailed Explanation
 
 

    

Sahara & Coke! invokes the following six laws

 

1. If A extended "significant effort" [See Issues 105, 107] towards obtaining readily available a) merchandise, b) services, c) specific employment d) or a particular employee; C may not subsequently endeavor to obtain it for him/herself.

 

 

 2. Ashkenazic custom permits C to endeavor to obtain merchandise, services, employment, or employees of limited availability, after A extended "significant effort" in obtaining it; so long as A has not performed a legal binding "acquisition" (kinyan)  [Choshen Mishpat 237:1, Pishchei Teshuva 2].

 

 

Nonetheless, Rav Moshe Feinstein rules that it is nonetheless virtuous for C to attempt to desist his/her pursuit, whereby allowing A to finalize his/her purported transaction [Igros Moshe: Choshen Mishpat I 60].

 

3. Even Ashkenazic custom prohibits C to endeavor to obtain objects, employment, or services when A has extended "extreme measures of effort" towards obtaining limited available objects [Maseches Gittin 59b].

 

 

Practically, it is difficult for Beit Din to directly enforce this law because the definition of "extreme measures of effort" is subject to three differing validated opinions.

 

 

3.1 The three different classifications of "extreme measures of effort" are. a) "A" has slightly endangered his/her life with the pursuit thereof [Sh"ut Maharshal 36]. b) "A" overcame obstacles and is sure to obtain the article etc. barring unforeseen interferences [Masas Binyamin 27]. c) "A" invested significant resources in his/her pursuit thereof. Included in this is honing a worker [Maharik].

 

As in general cases of financial unresolved doubts, Beit Din invokes the tenet of "respecting the status quo". Instead, the due execution of this law is left for "C" to personally preserve.

 

 

4. An employee may not breach the terms of a contract with an employer in favor of alternative employment [Ritva, Machane Efraim Schirus Poalim, Ketzos HaChoshen 333: 7, Pischei Teshuva 4, 5].

 

5. An employee may pursue commencing alternative employment following termination of his/her contract while employed by the competitor [Rabbi Akiva Eiger 237 like Mishna L'melech Hilchos Gezeila 1: 9].

 

6. A competing establishment or service provider may offer perks and better deals than the first enterprise in order to entice customers to switch to the competition [Choshen Mishpat 228:18]. Darchei Moshe forbids it if doing so will compel the original enterprise to fold [Darchei Moshe 156] .

 

 

Application

 

 

Sahara

 

 

If Teddy was under contract with Jetways, Sahara may not convince him to terminate it to work for the competition. While under contract with Jetways, Teddy may search for alternative employment to commence after the termination of his contract.

 

Jetways invested significantly in Teddy's training. Whether Jetways received their investment worth from four months of Teddy's services is a case by case call. If Jetways has yet to receive their investment worth, according to Maharik (see 3.1 c) this would be considered as though Jetways invested significant measures of effort towards obtaining services from Teddy. As such, even though Teddy was a "one of a kind employee," Sahara should wait to poach Teddy until Jetways received their investment worth. Nevertheless, if Sahara did poach Teddy and Teddy was not under contract, Jetways would not win their suit; as Beit Din will respect status quo rather than issue a verdict whereby defining the parameters of "extreme measures of effort". 

 

 

 

Coke

 

 

If employees are easy to come by, Coke should hire other prospective workers rather than lure away employees from Pepsi. If the likes of these employees were unique, Ashkenazic custom would permit Coke to offer Pepsi's employees incentives to switch; provided that they will 1) not breach written contracts and 2) threaten Pepsi's closure.

In terms of carrying classified information, the parameters of the legality of non-compete clauses in employment contracts vary greatly from State to State and from country to country. Local secular law would determine whether and for how long Pepsi's former employees are barred from working for a competitor.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note:
 
Although we aim to present the correct ruling, varying details are always important and decisively influence every individual case. Our readers are thus encouraged to present their personal cases to a competent authority and not solely rely on the information provided.
 

Together...for a better world
 You can help build a better world. Just invite your friends and family to subscribe to
 

Fellow Weekly.

 

To join this mailing list, please click here 
or send an email to weekly@projectfellow.org with the word subscribe in the subject line

  

 

    

CLICK HERE to DONATE to PROJECT FELLOW TODAY!

   

 

A project of
Yesharim Foundation for Ethical LawView our profile on LinkedIn
 
105/21 Sanhedria Murchevet, Jerusalem
ISRAEL 02-581-6337
USA 845-335-5516

Join Our Mailing List


Fellow - Yesharim | 105/21 Sanhedria Murchevet | Jerusalem | Israel