Wednesday, March 4, 2015

"The Free Market(TM) is great until business shows up"*

The first draft of the long-postponed contract overhaul was reviewed yesterday.  When we bought our first house, I learned the fundamental lesson that the property is worth whatever someone is willing to pay for it.  Similarly, there is nothing sacred or "canon" about contracts.  They are what both parties agree that they are when they're signed.  In both cases, buyer's remorse usually has to work at it to impress a judge in the event that things go into litigation.

At a previous job, I also learned that lawyers write contracts for other lawyers.  Which is at least 90% of the problem with contracts.  Unless, of course, you don't use a contract and relations with the client go south, in which case that's 100% of the problem.

One of the revised clauses had to do with both parties agreeing not to recruit each other's employees and/or customers.  As much as I want to give potential clients warm fuzzies (as well as cover my pastey-white dimpled posterior), I instructed the lawyer to nix it.

See, I figure that if it's actually an issue for my potential client, they'll have the great, good sense to negotiate that point.  (Which, incidentally, tells me some very interesting things about their mindset that I otherwise couldn't get at that point in the cycle--always a good thing.)  But having employees/customers poached emphatically does not number among the things that keep me awake at night.

Why?  Because I figure that if someone can smooth-talk someone else out of their relationship with me, then I'm either failing as a boss or a vendor.  Moreover, it calls into question whether that relationship was worth sustaining.  For all I know the "poacher" could be doing me a favour.  It's like the adage, "If he'll cheat with you, he'll cheat on you."  In which case, I wish the poacher all the joy of the new relationship...

But on a larger, philosophical level, I was a bit outraged at the fact that such contract provisions take away the choice of the employee and the customer.  I mean, it's not like either of them has any say--they'll likely never even see that clause, much less sign the contract.  The upshot is that if this sort of language is standard for business contracts, it's basically reinforcing oligopoly and its underlying attitude of entitlement--toward labour as well as markets.

I call shenanigans on that noise.  Maybe such clauses are like the non-compete agreements in the U.S. (basically not worth the proverbial paper they're printed on...and certainly not worth the toner--that stuff's expensive!).  I don't know, and it's likely I won't.

But enforceable or not, people keep letting lawyers pad out contracts (and their billable hours) with such twaddle...probably often enough to buffalo the inexperienced (or those who can't afford to risk even answering a civil court summons).  And so it continues.

Which is yet another reason why I roll my eyes at free market libertarians.  See, if their pipe-dreams even allow government enough power to enforce contracts (iffy), such contracts infringe upon the transparency and frictionless free-flow of information that's supposed to inform the market's "rational actors."  Most especially workers whose wages/benefits could be artificially depressed, or the customers whose prices could be artificially inflated.  Bottom line:  Collusion has the force of law--even in Galt's Gulch. 

And I call shenanigans on that, too.

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* Title quotation courtesy of Dennis, who made me LOL with that zinger.