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This article tells the story of a U.S based employee (Bob) hiring someone from China (the contractor) to do his work. The contractor did all of Bob's work, and Bob just surfed the web all day at his job.

The article says that Bob's bosses absolutely loved "his work". Eventually Bob's "scheme" was discovered and after that, he was fired.

So, my question is, what exactly is the problem here? The company hired someone (Bob) for certain tasks to be done, and that person ensures that the tasks are being done as best as possible. In some sense, Bob has made himself a "manager". He manages a guy in China to get his work done.

There is no "scamming the company" here either, because if the company is paying that much to Bob to get that work done, this means that the company thinks the work is worth the salary that they pay to Bob. If they thought that they could get the same work done for cheaper, they would already find someone else to do the work for less.

So, what exactly is/are the issue(s) here?

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    Comments are not for extended discussion; this conversation has been moved to chat.
    – Kilisi
    Jul 2 at 0:41
  • The book "The 3-hour-workweek" by Tim Ferriss elaborates on this setup
    – Roland
    Jul 3 at 22:17
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I think the main issue is with: The copyright or intellectual property or business plan. (And, there could potentially be some security issue).

Only employees hired by the company can access certain files, codebases, patents, business plans, etc... If a non-employee knows about these things, they could share the info with competitors, or with the press (the public), or even with hackers.

  1. If a competitor has the private info provided by the contractor without the company's permission, they can easily outperform the company in the business world.
  2. There are certain things the company does not want the general public to know about for many reasons that could potentially hurt the either company's image or business plan such as the future release dates of certain products.
  3. In addition, security issue might also be of great concern. If the contractor happened to work on building the internet network for the company and if he accidentally shared the way to access the company networks with bad actors, then hackers may install some virus into the network and force the company to pay lots of money. The hackers could also potentially access many employees' private info such as phone, address, social security number, birthday, bank account number (for direct deposit), etc...
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    It's all summed up in liability. Insurance does not and cannot cover "non-employee", and an employee's employee is not the company's employee. If IP theft occurs, the middleman is going to jail, and becomes fully liable.
    – Nelson
    Jul 2 at 2:52
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As an employee, what exactly is the problem with hiring someone else to do your job?

The main problem is that you are not doing what you were hired to do. You were hired to do the work, not to sell your work to someone else to do it for you. There is no way to rationalize this without being dishonest to yourself and your company. In short, you are in breach of your contract based on the fact that you are not doing what you were hired to do as well as likely violating company policies regarding access to company systems, data, secrets,...etc.

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    You are hired to get work done. With your logic, if you use any sort of automation aid in your work, you are "cheating". Same thing with all "managers". The "managers" don't do any work themselves. The people that they "manage" do the work. So I don't get how this is an issue. The only valid point here is the company policies about data and systems access.
    – user86676
    Jul 1 at 19:09
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    @user86676, yes, and in fact there was a famous question some years ago about someone who claimed to have fully automated their job. The situations are very different. The problem with outsourcing your own job is related to legal and IP risks that you would incur on behalf of the company but without the consent of the company.
    – teego1967
    Jul 1 at 19:19
  • Our performance based Warehouse Management System paid employees based on "time" for order pickers to select cases of water, one by one. Every now and then, someone savvy would say "Hey, I need 50. There are 50 on the pallet. I'll just take the pallet.". They'd get paid for 50 picks in a fraction of the time. I had a manager who claimed this was stealing time. Analogous or no?
    – Aww_Geez
    Jul 1 at 21:34
  • @Aww_Geez Seriously? As a manager, I'd have the system adjusted, the procedure changed and recognized the employee for their contribution to overall productivity Jul 2 at 8:34
  • @JulianaKarasawaSouza I just told the manager we're paying to get the picks to the dock - The selectors can do it as efficiently as they're able to. But it's an example where work is paid for, not a specific workflow or person. If anything, the selector is saving the company money on overtime.
    – Aww_Geez
    Jul 2 at 13:28
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If the company wants to employ a contractor with the concomitant duties of a contractor (NDA etc.), they would hire a contractor. If Bob owns the contractor company, they can outsource the job to whomever they like, as long as they are accountable for all problems emerging at their side.

The company didn't hire a contractor, but an employee. So, the employee is bound by the constraints of the company, and that includes doing the job themselves (at the standards that they convinced themselves at the interview that the candidate has; they have no idea how good Bob is at recruiting 3rd parties), and not leaking internals to external players of whom the company has no idea.

The "brands" of Bob as a contractor (company) and as an employee are completely different. The company pays for the services of Bob Employee (TM), not of Bob Contractor (TM).

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If a company doesn't have an actual contract with a hidden subcontractor, the subcontractor is not bound by the same terms that the employee is bound by.

So that hidden subcontractor could copy your data and release it into the wild, or copy the code base and create a competing product, and the original employer wouldn't be able to do much about it, in criminal court or in civil court.

In any case, you're asking the wrong question. The question is not whether this is wrong, or not. The real question is whether a company does anything wrong if it decides to cut out an employee, upon finding out that this employee was acting as a middleman.

And to that question, the answer is "no". There is nothing wrong with cutting out a middleman, especially if you believe that this middleman was not providing any added value to your company.

In some sense, Bob has made himself a "manager".

Equating him to a manager is a bit disingenuous. If you ask a manager an urgent question that only the person doing the work would actually know the answer to. He could just say: "Hold on, let's do a three way call with John. John should be able to answer that question for us."

On the other hand, the employee in this story wouldn't necessarily have that option. He'd be spending half his time deflecting questions, inventing fake excuses, and playing telephone. And simple back and forth conversations, instead of taking a few minutes, could take multiple days or weeks.

In other words, all that extra lying and obfuscation would serve no one but the employee himself.

There is no "scamming the company" here either, because if the company is paying that much to Bob to get that work done...

I'm sorry, but you can't claim that.

Without reading the terms of that original employment contract, you have no idea what that employer wanted from that particular employee.

And if the employment contract only mentioned the work to be done, without attaching any other conditions to it. I would be extremely surprised by that.

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  • "Without reading the terms of that original employment contract, you have no idea what that employer wanted from that particular employee." – Indeed. For example, one of the things the employer may have wanted, was Bob's citizenship, e.g. for ITAR reasons. Jul 1 at 20:44
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There is a difference between a company paying for tasks to be done which they may choose to do through a firm that will itself hire employees to complete them and hiring an individual (contracted or otherwise) to do tasks.

This company obviously expected Bob to do the work himself because they fired for it. Ultimately it is the company's decision on who they wish to hire. Also, it seems that Bob was aware that this would be underhanded; otherwise, he would have just disclosed that he was paying for those tasks to be completed by someone else?

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