Question

Business Law

You are one of nine partners of MobileWorks, a partnership organized to manufacture and sell mobile networking devices. You receive an email from a start-up competitor, NetraNet, who is interested in hiring you immediately in a highly-paid leadership position. The rumor is that NetraNet is rapidly developing more advanced networking technology than MobileWorks. You would be eager to manage the new technology. However, the MobileWorks partnership agreement states that no partner can leave the partnership without giving sixty days’ notice to the other partners. You know that waiting sixty days would be too long and you would miss out on key opportunities at NetraNet. Considering partnership law and the business implications, evaluate the decision to leave the MobileWorks partnership immediately to join NetraNet.

Answer 1

A partnership agreement details the rights and responsibilities of all partners which is a binding by law. Breach of contract by any of the partners can lead to a legal action aginst the breaching partner. Generally, in the parnership agreement, there is a clause which handles such scenario of breach by a partner. The partnership agreement of MobileWorks clearly states that there is a binding of sixty days notice before leaving the business. Leaving the partnershipp with MobileWorks immediately to join NetraNet can lead to the following consequences:

1. There will be a breach of partnership agreement, if notice is not served.

2. Rest of the partners of MobileWorks have a right to sue me and take a legal action as it will jeopardise the existing business.

3. Partnership agreement can be refered for the solution if there is a breach of agreement. There might be a monetory penalty or may be that the partner can not join any other competitor for the next few years. If this is the case, I won't be able to join NetraNet.

4. There can be a clause where the new company (NetraNet) can buy the notice period of 60 days from MobileWorks and pay the lumpsum to let me join the new firm.

4. Decision to leave immediately will not seem professional and ethical in the business context.

5. This might give a negative impression to NetraNet for such behaviour and might end up losing the offer anyways.

6. The only communication till now is through mail only, one can discuss over the call or meeting and decide on negotiating on joing after serving the notice period.

Overall, it will not be advisable to leave MobileWorks immediately from the Professional Code of Conduct point of view.