My dad tells a brutal story about this. An acquaintance of his during the 70’s oil crisis discovered that there was a tanker full of oil stuck in port because of financing problems. Inability to pay for the fuel or something. Paying the fuel supplier would basically give whoever paid for it ownership of the shipment, because of some kind of maritime lien. The guy didn’t have the cash, so he went to a Swiss bank. The banker listened to the story, worked through the math and the proposal, the. Turned around and started making phone calls -- in German of course. Finally, he turns back around and says, “You’re out.”
Lawyer lesson: get a good non-use and non-disclosure agreement before talking! Sure some companies routinely ignore them. But others don’t and there’s at least some settlement value there.
Big real estate developers will do similar stuff to small contractors, too. Or even merely choose NOT to pay for services agreed to, or sort of agreed to (orally, not written). Handshake trust works more often between more equal folk.
This power differential is exactly how small companies get raped by Big Boys. And a good reason for those who favor market capitalism to prefer more smaller and medium sized firms - none with more than 5% of the market. For banks, more than 2% is too much.
There are variations on this theme. I worked at a company that performed long-term subcontracted services to Fortune 500 corporations. Often, they stipulated that providers, as part of the “value proposition”, were to be innovative in addition to the basic services, and offer process improvement proposals if we discovered potential opportunities. Theoretically, as in incentive, there was to be a sharing of any financial gains (cost savings, revenue growth, etc.) that were realized if we jointly applied said proposals. In some instances, after we gave a detailed presentation of an opportunity, the corporate client told us they needed to “study” the proposal and let us know if they wanted to proceed or not. Later we would discover that they had implemented our idea. As you put it, we were “just giving away knowledge.” Because we were already in a long-term contract situation, our senior management was reluctant to call them out.
My dad tells a brutal story about this. An acquaintance of his during the 70’s oil crisis discovered that there was a tanker full of oil stuck in port because of financing problems. Inability to pay for the fuel or something. Paying the fuel supplier would basically give whoever paid for it ownership of the shipment, because of some kind of maritime lien. The guy didn’t have the cash, so he went to a Swiss bank. The banker listened to the story, worked through the math and the proposal, the. Turned around and started making phone calls -- in German of course. Finally, he turns back around and says, “You’re out.”
Lawyer lesson: get a good non-use and non-disclosure agreement before talking! Sure some companies routinely ignore them. But others don’t and there’s at least some settlement value there.
Big real estate developers will do similar stuff to small contractors, too. Or even merely choose NOT to pay for services agreed to, or sort of agreed to (orally, not written). Handshake trust works more often between more equal folk.
This power differential is exactly how small companies get raped by Big Boys. And a good reason for those who favor market capitalism to prefer more smaller and medium sized firms - none with more than 5% of the market. For banks, more than 2% is too much.
There are variations on this theme. I worked at a company that performed long-term subcontracted services to Fortune 500 corporations. Often, they stipulated that providers, as part of the “value proposition”, were to be innovative in addition to the basic services, and offer process improvement proposals if we discovered potential opportunities. Theoretically, as in incentive, there was to be a sharing of any financial gains (cost savings, revenue growth, etc.) that were realized if we jointly applied said proposals. In some instances, after we gave a detailed presentation of an opportunity, the corporate client told us they needed to “study” the proposal and let us know if they wanted to proceed or not. Later we would discover that they had implemented our idea. As you put it, we were “just giving away knowledge.” Because we were already in a long-term contract situation, our senior management was reluctant to call them out.