Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Discuss morality and ethics in this message board.
Featured Article: Philosophical Analysis of Abortion, The Right to Life, and Murder
User avatar
obxexile
New Trial Member
Posts: 1
Joined: May 9th, 2020, 11:18 pm

Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by obxexile » May 9th, 2020, 11:26 pm

Hi Everyone, New user; first post. So here is my situation: I started a small business, approached a friend to do some design work, he wanted to be a partner...then he took things we created together for my business, which he was a partner in, and started his own business, of the very same type, using nearly everything we created together for my business, including my designs, business plan, marketing, sales channels, etc, slapped his label on it, and went into business against me, while still partners w me. He 'doesnt' see anything wrong w it'. I do. Please let me know your thoughts. Thank you for your time and input :)

User avatar
LuckyR
Moderator
Posts: 4398
Joined: January 18th, 2015, 1:16 am

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by LuckyR » May 10th, 2020, 3:24 am

obxexile wrote:
May 9th, 2020, 11:26 pm
Hi Everyone, New user; first post. So here is my situation: I started a small business, approached a friend to do some design work, he wanted to be a partner...then he took things we created together for my business, which he was a partner in, and started his own business, of the very same type, using nearly everything we created together for my business, including my designs, business plan, marketing, sales channels, etc, slapped his label on it, and went into business against me, while still partners w me. He 'doesnt' see anything wrong w it'. I do. Please let me know your thoughts. Thank you for your time and input :)
It depends on several factors. Did his contract have a non-compete clause? Is he staking a claim in an area that you currently don't serve? Was anything you created (your intellectual property) trademarked or copyrighted?
"As usual... it depends."

User avatar
Sculptor1
Posts: 3022
Joined: May 16th, 2019, 5:35 am

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by Sculptor1 » May 10th, 2020, 4:55 am

obxexile wrote:
May 9th, 2020, 11:26 pm
Hi Everyone, New user; first post. So here is my situation: I started a small business, approached a friend to do some design work, he wanted to be a partner...then he took things we created together for my business, which he was a partner in, and started his own business, of the very same type, using nearly everything we created together for my business, including my designs, business plan, marketing, sales channels, etc, slapped his label on it, and went into business against me, while still partners w me. He 'doesnt' see anything wrong w it'. I do. Please let me know your thoughts. Thank you for your time and input :)
Did you have a formal partnership?
If not then what s/he has done might be somewhat unethical, but this is business.
Sounds like the guy is an arsehole and you need to cut them off.

NukeBan
Posts: 98
Joined: April 20th, 2020, 6:24 pm

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by NukeBan » May 10th, 2020, 10:14 am

My vote, be happy to be rid of him. He's done you a favor, thank him, send him a box of chocolates, and wave goodbye. Be grateful that he stole from you while the stakes were still small.

User avatar
Terrapin Station
Posts: 4503
Joined: August 23rd, 2016, 3:00 pm
Favorite Philosopher: Bertrand Russell and WVO Quine
Location: NYC Man

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by Terrapin Station » May 10th, 2020, 10:20 am

Part of the problem would be that you should have had a contract with a non-compete clause, as LuckyR mentioned above.

In the US, at least, graphic materials (like logos, for example), as well as specific texts (like slogans, as long as they're sufficiently unique) that are created for your business are copyrighted upon creation (though it's wise to still register them, and logos, etc. should be registered with the trademark office), and the default is that the business owns them, as long as they were done in a contracted or paid context for the business. Of course, if he was a partner and there was no non-compete clause in a contract with him, then there may not be much you can do on that end, either.

If the business were sufficiently established, you could possibly go after him for trademark infringement (for name, logo, marketing materials etc. similarities), but it sounds like this is something that was just in the beginning stages. Trademark cases usually do not work if you're not an established business, so that you've had some history, some success, some industry presence, etc.

In any event, I would say that what he did isn't cool. I wouldn't say that it's necessarily unethical--to me, that's stronger than saying that it wasn't cool. But the bottom line, and the lesson you should learn from this, is:

DO NOT go into any sort of business with anyone without drawing up contracts first, even if it's a good friend or a family member.

And you should follow this regardless of how casual the project seems. It's best to have an experienced lawyer draw up the contracts, but in a worst case (lowest-budget) scenario, at least learn some contract basics and draw up contracts on your own that you have folks sign before a notary. That's better than nothing. Without a contract, you're basically screwing yourself. If the people you're working with aren't amenable to contractual agreements prior to starting any sort of work, any sort of project, they're not worth going into business with.

NukeBan
Posts: 98
Joined: April 20th, 2020, 6:24 pm

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by NukeBan » May 10th, 2020, 10:51 am

DO NOT go into any sort of business with anyone without drawing up contracts first, even if it's a good friend or a family member.
Or, to keep it simple...

Don't go in to business with anyone. :D

Seriously, sometimes the wisest move is to do your own thing, no boss, no employees, no partners. No friends, no family, no nothing. Just you and your customers.

I once built a net startup by myself which sold deep in to six figures. I sold it to company of 300 employees, nice guys, smart guys. And they managed to kill the entire project within 6 months. I got paid well, no problem there, no complaints. But that's because I required cash upfront at closing. Had I become partners with them I would have lost everything in exchange for nothing.

User avatar
Terrapin Station
Posts: 4503
Joined: August 23rd, 2016, 3:00 pm
Favorite Philosopher: Bertrand Russell and WVO Quine
Location: NYC Man

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by Terrapin Station » May 10th, 2020, 4:10 pm

NukeBan wrote:
May 10th, 2020, 10:51 am
DO NOT go into any sort of business with anyone without drawing up contracts first, even if it's a good friend or a family member.
Or, to keep it simple...

Don't go in to business with anyone. :D

Seriously, sometimes the wisest move is to do your own thing, no boss, no employees, no partners. No friends, no family, no nothing. Just you and your customers.

I once built a net startup by myself which sold deep in to six figures. I sold it to company of 300 employees, nice guys, smart guys. And they managed to kill the entire project within 6 months. I got paid well, no problem there, no complaints. But that's because I required cash upfront at closing. Had I become partners with them I would have lost everything in exchange for nothing.
Sometimes you have no choice, though. I'm a musician/composer/arranger professionally. I need to work with others to do gigs. That would be the case even if I were a strictly a one-man band--I still need to work with techs, promoters, etc. But I do a lot of work where I'm not a one-man band. I wouldn't do something like put a band together, or even take a work-for-hire or journeyman gig with someone else without having contractual agreements up front.

User avatar
Sculptor1
Posts: 3022
Joined: May 16th, 2019, 5:35 am

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by Sculptor1 » May 10th, 2020, 6:03 pm

NukeBan wrote:
May 10th, 2020, 10:14 am
My vote, be happy to be rid of him. He's done you a favor, thank him, send him a box of chocolates, and wave goodbye. Be grateful that he stole from you while the stakes were still small.
He should also delete his partner's hard-drive too.

User avatar
LuckyR
Moderator
Posts: 4398
Joined: January 18th, 2015, 1:16 am

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by LuckyR » May 11th, 2020, 3:06 am

Sculptor1 wrote:
May 10th, 2020, 6:03 pm
NukeBan wrote:
May 10th, 2020, 10:14 am
My vote, be happy to be rid of him. He's done you a favor, thank him, send him a box of chocolates, and wave goodbye. Be grateful that he stole from you while the stakes were still small.
He should also delete his partner's hard-drive too.
Transfer to the Vengeance thread
"As usual... it depends."

evolution
Posts: 653
Joined: April 19th, 2020, 6:20 am

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by evolution » May 12th, 2020, 7:21 am

If you stopped looking at money as though it had any importance in Life, then you would not be concerned about this at all.

User avatar
Terrapin Station
Posts: 4503
Joined: August 23rd, 2016, 3:00 pm
Favorite Philosopher: Bertrand Russell and WVO Quine
Location: NYC Man

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by Terrapin Station » May 12th, 2020, 8:44 am

evolution wrote:
May 12th, 2020, 7:21 am
If you stopped looking at money as though it had any importance in Life, then you would not be concerned about this at all.
Hard to not look at money as having importance when it's required for food, shelter, health care, clothing, education, transportation, entertainment, etc.

evolution
Posts: 653
Joined: April 19th, 2020, 6:20 am

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by evolution » May 12th, 2020, 6:33 pm

Terrapin Station wrote:
May 12th, 2020, 8:44 am
evolution wrote:
May 12th, 2020, 7:21 am
If you stopped looking at money as though it had any importance in Life, then you would not be concerned about this at all.
Hard to not look at money as having importance when it's required for food, shelter, health care, clothing, education, transportation, entertainment, etc.
Lol. If you think or believe money is required for food, shelter, ET cetera, then you have an extremely narrowed and short sighted view of things.

This short sightedness and very narrowed field of view is why some people are still seeking answers to the Truly meaningful questions in Life. This extremely narrowed way of looking is also how some people "justify" to themselves their greedy and selfish behaviors.

User avatar
Terrapin Station
Posts: 4503
Joined: August 23rd, 2016, 3:00 pm
Favorite Philosopher: Bertrand Russell and WVO Quine
Location: NYC Man

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by Terrapin Station » May 12th, 2020, 6:49 pm

evolution wrote:
May 12th, 2020, 6:33 pm
Terrapin Station wrote:
May 12th, 2020, 8:44 am


Hard to not look at money as having importance when it's required for food, shelter, health care, clothing, education, transportation, entertainment, etc.
Lol. If you think or believe money is required for food, shelter, ET cetera, then you have an extremely narrowed and short sighted view of things.

This short sightedness and very narrowed field of view is why some people are still seeking answers to the Truly meaningful questions in Life. This extremely narrowed way of looking is also how some people "justify" to themselves their greedy and selfish behaviors.
What option are you using--mooching off of your parents? Imprisonment?

evolution
Posts: 653
Joined: April 19th, 2020, 6:20 am

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by evolution » May 13th, 2020, 1:45 am

Terrapin Station wrote:
May 12th, 2020, 6:49 pm
evolution wrote:
May 12th, 2020, 6:33 pm


Lol. If you think or believe money is required for food, shelter, ET cetera, then you have an extremely narrowed and short sighted view of things.

This short sightedness and very narrowed field of view is why some people are still seeking answers to the Truly meaningful questions in Life. This extremely narrowed way of looking is also how some people "justify" to themselves their greedy and selfish behaviors.
What option are you using--mooching off of your parents? Imprisonment?
Both assumptions are absolutely completely wrong.

User avatar
Terrapin Station
Posts: 4503
Joined: August 23rd, 2016, 3:00 pm
Favorite Philosopher: Bertrand Russell and WVO Quine
Location: NYC Man

Re: Is It Unethical for Your Business Partner to Start Same Type Business In Competition w Yours?

Post by Terrapin Station » May 13th, 2020, 7:08 am

evolution wrote:
May 13th, 2020, 1:45 am
Terrapin Station wrote:
May 12th, 2020, 6:49 pm


What option are you using--mooching off of your parents? Imprisonment?
Both assumptions are absolutely completely wrong.
You didn't pick up on the sarcasm?

Anyway, so how are you acquiring food, shelter, etc. without needing to use money?

Post Reply