My new company of 3 months is having trouble servicing its debts, including payroll, and I am actively looking for a new job. When asked by potential employers as to why I am moving on so soon, am I ethically and legally allowed to say the company is heading for insolvency?

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    My new company of 3 months. Is it a startup of yours?
    – Dawny33
    Oct 5, 2015 at 6:59
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    I think it is generally a bad idea to be critical of your current employer. There are ways to allude to the issues while keeping your response focused on you and not the company you want to leave. A lot of industries are surprisingly small places and you don't want idle gossip to burn future bridges.
    – Dustybin80
    Oct 5, 2015 at 7:05
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    Where I live (Germany) this would be illegal, especially since it would probably hasten the demise if the company (no one gives contracts to a company that has troubles), plus this might be tradeable insider information. Unless, as per Dawnys comment, this is a company you founded yourself (but even then you have legal obligations that might make disclosure less than advisable). Oct 5, 2015 at 7:09
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    @JaneS, not necessarily - lowering the value of your remaining assets when you file for bankruptcy might still be illegal (depending on circumstances and legislation). Oct 5, 2015 at 7:11
  • @EikePierstorff: I don't think that simply stating the fact that you were not paid on time is illegal (IANAL, of course). Divulging insider information (such as the list of open bills that you know because you work in finance) is a different matter. Still, does not mean it is wise to mention that.
    – sleske
    Oct 5, 2015 at 12:45

3 Answers 3


Honesty isn't always the best policy

At least, not when talking about previous employers.

I can see your point here, you're being asked "Why are you leaving your job?" and the honest answer is (at least partially) "Because the company is in trouble and I want to know my job is secure". Saying this can be bad in a few ways though:

  1. Although understandable as a reason to leave, it marks you as someone who may jump ship at the start of any problems. I'm not saying you are, and neither are the recruiters, but without context we have no idea if "Financial trouble" is "No bonus this year", "Going bust next week" or somewhere in between.

Avoid anything negative in the same way you'd avoid "My manager is an idiot and only lets me have 2 cups of coffee a day", and keep things positive. You don't want to be marked down as a negative person, or a flight risk, before you've even started!

  1. You may be breaching confidentiality/anti-competition etc agreements, or a clause in your contract forbidding you from giving sensitive information regarding the company (which financial information almost certainly is). It's just not worth the risk of someone noticing, even if they have better things to be doing right now.

That said, if you've only been with the new company for 3 months, I wouldn't be surprised to find that "Because I'd like to further my career" invited further questioning along the lines of "Well yes, but why are you moving after only 3 months?". At this point you have to make a judgement call (based on your own contract) as to whether you feel comfortable with a statement along the lines of "We've been made aware of some risk to the future of the company. I'm not in a position to give out further details as I'm not aware of the full situation, but what I've heard is enough to make me concerned for my job security"

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    I dont go with most parts of this post, but the conclusion is perfect.
    – jawo
    Oct 5, 2015 at 10:59

When asked by potential employers as to why I am moving on so soon, am I ethically and legally allowed to say the company is heading for insolvency?

That depends on the company, and your role in it.

For example, if this is a publicly traded company, and you are an insider with material knowledge of the company's finances, you are not allowed to expose insider knowledge.

Most likely, you aren't in that position though. You probably aren't in a position to conclude that they are definitely "heading for insolvency" since many things could happen to change that potential outcome.

You could say that you are worried about the company financially and that you are worried about your job stability. Don't get into specifics, since they aren't really important. Hiring companies will understand.

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    Doesn't "insider knowledge" apply to anyone employed by the company?
    – stannius
    Oct 5, 2015 at 15:53

Despite what others here are saying, you need to be realistic about why you are moving, otherwise you will look like a flight risk/or about to be fired. You don't need to be explicit of the details, and can use the short term part of your time as part of the answer. For example:

I have only been at the company for three months, but given what I have seen I have deep concerns for their long term viability, and given I'm only just in I felt it is better to move now when I can take my time to find the right opportunity rather than wait until I may have to find a new role quickly.

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    Just say that you feel the position isn't a good fit - three months in is still within a probation period, and interviewers will understand. As long as it isn't the only short stint, that is
    – HorusKol
    Oct 5, 2015 at 21:46
  • Just be factual. You can't be sued for slander if it's factual. Established companies actually like to see people who are looking for stability. Oct 5, 2015 at 22:09
  • @horusKol I wouldn't go that way. This makes the person seem flighty. I see no harm in stating that the reason for leaving is that the company couldn't make payroll. Oct 5, 2015 at 22:10
  • @BillLeeper - actually, you can be sued for slander even if your statement was factual - and given the current libel laws in most Western countries, you will then have to stump for solicitor's bills to prove it was factual.
    – HorusKol
    Oct 6, 2015 at 4:06
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    This is sounding like legal advice talking about slander, don't want my answer moved off topic. My limited googling of slander seems to require the injured party to show financial loss , so not relevant here. Oct 6, 2015 at 5:10

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