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I'm working in the IT industry with a fairly niche technology (to the point that there are only three local major employers using this technology and "everyone knows everyone"). I'm content with my current workplace (one of the above mentioned employers), so I'm not actively looking for other opportunities. There's also a gentlemen's agreement between me and my employer that if I want to leave, I tell him, so he can make arrangements (a year ago I was unhappy, ready to leave, told him, then things improved). Anyway, from time to time I'm approached on LinkedIn, this time by one of the other above mentioned major employers.

I admit I wasn't clear enough with the recruiter that I'm not looking for a job change, so she organized an interview. I made it clear during my interview that I wasn't actively looking for a new job, I'm just exploring this opportunity, but anyway, at the end of the interview they asked me what my salary expectation is - I answered with a 10% higher value than my current salary (and expected that's way too much for them). However, they answered with a salary offer that's 10% more than even my expectation. Now this offer is quite tempting (the family budget is quite tight while my wife is between jobs) - but the hiring manager said there's a gentlemen's agreement between my current employer and him that they don't "poach" each other's employees, don't try to recruit directly. He's willing to take me nevertheless, but I had to pretend I'm switching jobs on my own.

At this point I'm not quite sure what to do. I presume the recruiter did not know about that gentlemen's agreement, so she acted in good faith, but it will look like one of the gentlemen's agreement can't hold if I'm leaving. I'm leaning towards declining this offer even though the money would be really good. I'd like to avoid any bad blood between everyone involved - as there are only these few employers in this niche, it could hinder my future employment. I know this is up to me to decide, but I'd like to ask: have you ever been in similar situation? How did you decide? Is there an angle that I haven't considered yet?

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    Did you already have the occasion to see this "gentlemen's agreement" working in the other direction? i.e. your employer letting an employee know before any notice is officially given that they will be laid off, so that aforementioned employee can "make arrangements"? My experience on that is that in such an agreement employees are usually much more gentleman than employers... – Laurent S. Feb 24 at 20:33
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    the gentlemans agreeement to not poach is between your old employer and your new employer. You are not involved and are free to do whatever you want. – Christian Feb 25 at 9:48
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    Google, Apple, Facebook and some others had to be several hundred million dollars in fines for that kind of "gentlemen's agreement". It's illegal in the USA. It's illegal in many places. – gnasher729 Feb 25 at 10:17
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    The fact that the hiring manager wants you to lie to pretend that he is keeping his agreement is another sign of how farcical it is to call this "gentlemen's agreements". – jkej Feb 25 at 11:04
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    A 21% pay jump is HUGE, especially for a family that is struggling financially. It would take a lot of negatives to make me pass that up. An unethical and possibly illegal agreement between my current and future employers would certainly not stop me. – Kevin Feb 25 at 16:05
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You should feel free to take the job. Your biggest responsibility is to your family and it sounds like the increased salary would help.

Maintaining a good relationship with your current employer sounds wise. (It's a decent thing to aim for by default. In a small local market, you may benefit in future by maintaining a good reputation.) Offering a longer than normal notice period to help give time to recruit a replacement for you might help you with this.

You should also be honest that you were approached by a recruiter. Then leave him to decide whether this has broken or merely bent his gentlemen's agreement. Either way, you have done nothing wrong - you were not party to this agreement.

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    Yes, it's not your agreement – Kilisi Feb 24 at 17:50
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    When you speak to your current employer, they may offer to match (or even beat) the increase. Think carefully before considering such counter-offers. – user5151179 Feb 25 at 2:09
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    I think the recruiter was someone inside the 2nd company (i.e. HR or something like that) rather than a "third party". – seventyeightist Feb 25 at 9:17
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    I don’t see why the recruiter or anything about your job hunting process is any of your current employers’ business. – mxyzplk Feb 25 at 14:52
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    So go against the agreement but also admit it? Seems like the worst of both worlds. – mxyzplk Feb 25 at 15:55
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You don't say where you are so it's hard to take local norms into account, but this "gentleman's agreement" to not poach employees is anti-competitive. It is a way of suppressing wages across the industry - your case being a prime example (you are considering not taking a 20% wage increase). Such agreements are illegal in my country (the UK) and other countries.

I don't see any ethical dilemma. If the new job is attractive, then take the job.

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    The anti-poaching agreement (between competitors) is not the gentlemen agreement (between OP and their employer). When it comes to not actively try to recruit employees from other companies, I've certainly seen it (here in Belgium at least) several times, usually not between competitors but through companies with a client-supplier relationship (typical case : a consulting company and its clients usually have such agreements) – Laurent S. Feb 24 at 20:26
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    @mattfreake the effect is that already hired employees cannot leverage their experience as much. When negotiating raises they can threaten to leave, but their current employer will know that they will have to go to an industry they have no experience with, so they will be not very well paid to begin this. This allows the employer to restrict raises. – SJuan76 Feb 24 at 23:14
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    @SJuan76 That sounds like a non-compete clause but is not what was described in the question. The anti-poaching agreement still allows employees to switch to competitors in the same industry, so they have leverage. It could still suppress wages though, because if employees can't be actively approached by competitors, they may not know whether they are in demand or what their market value is. – kapex Feb 25 at 11:40
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    @kapex Anti-poaching agreements are just as illegal in many places; in the US, for example, there was a major lawsuit in Silicon Valley due to a similar agreement between Apple/Intel/Google/etc. (see this for more) which is exactly what it sounds like OP is describing. – Joe Feb 26 at 10:00
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    I have clauses in my employment contract to not switch jobs in client-supplier relationship, my it's not relevant to this case. The two companies have some common dealings like organising meetups (because they are the major local players in this niche technology). – István Kovács Feb 26 at 11:17
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There's also a gentlemen's agreement between me and my employer that if I want to leave, I tell him, so he can make arrangements

That one too is not a gentlemen's agreement.

It's a rhetorical promise asked under pressure. It's a nice offer, and I don't blame your boss for making it, but it's also a manipulation technique to a degree. Did you really have the option to say 'no' to that? No, of course not.

No one in their right mind would respond: "Thank you, but if my pay is not what the market offers, I'm not making you any promises. It would just be safer to give me a raise commensurate with my value to your company every single year from the very beginning, instead of waiting until I'm dissatisfied and already looking to go elsewhere." The power dynamics simply do not allow for that kind of answer.

but the hiring manager said there's a gentlemen's agreement between my current employer and him that they don't "poach" each other's employees, don't try to recruit directly.

Regarding this second (most likely illegal) agreement between the other company and your employer, make sure this internal recruiter has the firm backing of their own CEO or their VP. You may even want to insist on a binding legal contract before you're willing to give your notice.

You don't want your offer to be reneged on once you've already given your notice period or once you're unemployed. This can happen and it sucks.

UPDATE:

As far as I know, a couple of years ago (before I joined the current company) 25% of the software developers moved between these companies in the same direction as I might move and that kind of ruined the mood between the management for a while. The "no-poaching" agreement was a result of this issue.

In a small niche field where there are only three local competitors, it's normal that the domain-specific employees go back and forth between those three companies during the full course of their careers.

And yes, if your company is not offering a competitive salary along with a form of golden handcuffs such as generous deferred compensation or generous deferred stock options (depending on if your company is private or public), your company is probably going to lose many more of its domain-specific employees to its competitors than it is able to hire back from them.

With that said, be extremely careful and be paranoid.

Given the previous history between these two companies and given what the recruiter has told you about their "friendly" backroom agreement, you should insist on an ironclad contract that offers you compensation should they back out on their agreement to hire you.

In other words, do everything you can to not become a casualty of their backroom deals. You may even want to hire a lawyer to review the contract before you accept it.

I answered with a 10% higher value than my current salary (and expected that's way too much for them). However, they answered with a salary offer that's 10% more than even my expectation.

You shouldn't have answered that question. You should have made them give you their number first.

If you're still on the fence, don't just refuse the offer, ask for more money (or for more autonomy, or for more benefits), and see how far you can take it.

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    +1. These so-called "gentleman's agreements" are designed for one thing and one thing alone, giving employers unreasonable power over their employees. The only "gentlemen" who prosper from such agreements are these employers, which is why such agreements are broadly illegal. – Ian Kemp Feb 25 at 9:04
  • As far as I know, a couple of years ago (before I joined the current company) 25% of the software developers moved between these companies in the same direction as I might move and that kind of ruined the mood between the managements for a while. The "no poaching" agreement was a result of this issue. – István Kovács Feb 26 at 18:54
  • @IstvánKovács, I've just replied to your comment within the middle of my answer. By the way, are you using your real name? It's usually not a good idea not to use your real name when discussing topics like these. You can ask the mods to change your user name if you wish. They'll do that for you. – Stephan Branczyk Feb 27 at 0:29
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Well, your current employer has been good to you, and has offered an open door to discuss these things. So, before you jump ship, go discuss with them. You don't have to name names after all. You can just say that you were approached, and that you were offered a 20% salary increase, and that at this point in your life, that's meaningful. You can then make your next steps based on how they react to that.

Your current employer has treated you well, and perhaps deserves some loyalty. You really don't owe anything to the person who decided to try to poach you, unless you decide you want to go work for them instead. You certianly don't owe it to them to lie to your current employer.

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    I agree this is an important practical angle. It is a good point to raise that these kinds of "polite agreements" can amount to unfair worker manipulation if widespread. But in this particular case, the OP has the option to be personally honest by asking the boss for a raise. You can say "I have heard very reliably that I could be making more" without getting too far into it. – Mike M Feb 25 at 13:07
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I have worked in a situation where companies had a "business partnership", and the expectation was that they didn't "poach" from each other. Obviously, during the work, people would come into contact with specialists with very attractive skill-sets.

However, the essence of the no-poaching rule was that you wouldn't approach someone with whom you'd come into contact this way. Where an employee is actively seeking a new opportunity (no matter how accidentally!) then if a recruiter introduced them to a business partner, this was seen as fair game.

I experienced this, and was told by my new employer that if I'd have approached them directly there'd have been enough doubt that they'd have avoided the problem by not hiring me. As it had come through a recruiter, this was seen as clear enough that it wasn't poaching.

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  • Isn't there still enough doubt since the new company could have nefariously asked the recruiter to approach him? Or is that too clandestine to even consider? – DKNguyen Feb 25 at 22:56
  • It gave them enough to argue their case if needed. – Dominic Cronin Feb 27 at 6:38

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