Question about legality of a practice.

**ChinkyDude** · 01-24-2007 09:39 AM

Hello everyone,

I have a few questions concerning the legality of a practice.

Here is the scenario:

I work as a computer technician for a company that has many offices across Canada. We have a supplier of computer equipment that sells us anything that we need relating to computers.

Now my questions is: Is there anything illegal if I decide to open a business, and sell to the company i'm working in right now? I know for a fact my prices will be cheaper than our current supplier.

I would also like to add I am not part of management, so I do participate in purchasing decisions, so that should rule out any conflict of interest right?

What do you guys think? I'm thinking this could be a very profitable for me if there is nothing illegal about this practice. Also, if this is somewhat illegal, what can be done to make it legal?

Thanks in advance!
Jon

**The Stealthy One** · 01-24-2007 09:55 AM

Hi Jon!

I don't see anything illegal about this right off. Just approach the purchasers and let them know what you want to do. The worst thing they could say to your presentation is no, they do not want to buy from you - so what's to lose?

**akula** · 01-24-2007 10:00 AM

sure, what you're suggesting can definitely be illegal

it all depends on the terms of the contract between your current employer and their computer equipment supplier

if the contract has a term of 5 years with 2 years to go, you can't ask your employer to breach the contract and switch suppliers

then again, the contract may allow the your employer to switch suppliers at will, in which case other legal issues may need to be resolved

**akula** · 01-24-2007 10:03 AM

Originally Posted by The Stealthy One

Hi Jon!

I don't see anything illegal about this right off. Just approach the purchasers and let them know what you want to do. The worst thing they could say to your presentation is no, they do not want to buy from you - so what's to lose?

no, the worst thing that can happen is him getting fired

if his manager has a personal relationship with the supplier, or takes kickbacks for extending the contract - having some guy snooping around and asking questions about the contract will get this guy fired

**ChinkyDude** · 01-24-2007 10:09 AM

Originally Posted by akula

sure, what you're suggesting can definitely be illegal

it all depends on the terms of the contract between your current employer and their computer equipment supplier

if the contract has a term of 5 years with 2 years to go, you can't ask your employer to breach the contract and switch suppliers

then again, the contract may allow the your employer to switch suppliers at will, in which case other legal issues may need to be resolved

Well I know for a fact they are not under contract with the supplier. We have went elsewhere for certain laser printers simply because our supplier's price was too expensive.

**The Stealthy One** · 01-24-2007 11:56 AM

akula, that is all wrong. If he makes a presentation as to how he can save the company money, there is no "snooping around and asking questions" involved.

**akula** · 01-24-2007 11:57 PM

well, if there is no contract or hidden agenda's, then chinky's gonna have to find a champion to support this pitch

chinky, do not attempt to get this deal through on your own. you might make some managers look stupid.

you need to find a manager and convince him that it's his great idea that the company changes suppliers, then, this manager will help you pitch your deal to the executives and take the credit for a job well done.

if you come into the organizations with "look at me, I can save you money", you managers will risk having to answer "why are we paying such high prices". they don't want to be answering these questions, which is why you gotta do what I've just explained

identify a purchasing manager who needs to get promoted. tell him that you have a way for him to get promoted, which involves him supporting your bid for the company's business

**ChinkyDude** · 01-25-2007 06:13 PM

Originally Posted by akula

well, if there is no contract or hidden agenda's, then chinky's gonna have to find a champion to support this pitch

chinky, do not attempt to get this deal through on your own. you might make some managers look stupid.

you need to find a manager and convince him that it's his great idea that the company changes suppliers, then, this manager will help you pitch your deal to the executives and take the credit for a job well done.

if you come into the organizations with "look at me, I can save you money", you managers will risk having to answer "why are we paying such high prices". they don't want to be answering these questions, which is why you gotta do what I've just explained

identify a purchasing manager who needs to get promoted. tell him that you have a way for him to get promoted, which involves him supporting your bid for the company's business

I see where you're going with this Akula. Sounds like a plan.

I have a little question though, once again concerning the "conflict of interest". Lets talk about computer monitors for this example. Let say in this example, my current company I work for pays 150$ for each monitor. Now, with the company that I personally own, I purchase monitors through my source at 70$ and decide to resell them to the company I work for for 120$.

Now here is the question, since I knowingly hide my source from my company i work for, (so I could purposely re-sell them at 120$ to make 50$ profit) would tha constitute as a conflict of interest since I am forced to act on the best interest of my company I work for?

Finally, what if my source is a wholesaler that would only deal with retailers. My personal company would qualify as a retailer, however, the company I work for doesn't since they do not intend of purchasing the monitors for reselling. In this case, would this constitute a conflict of interest?

Thanks in advance for your advice, all of you have been very helpful! Thank you!

Jon

**akula** · 01-25-2007 08:06 PM

Originally Posted by ChinkyDude

I have a little question though, once again concerning the "conflict of interest". Lets talk about computer monitors for this example. Let say in this example, my current company I work for pays 150$ for each monitor. Now, with the company that I personally own, I purchase monitors through my source at 70$ and decide to resell them to the company I work for for 120$.

Now here is the question, since I knowingly hide my source from my company i work for, (so I could purposely re-sell them at 120$ to make 50$ profit) would tha constitute as a conflict of interest since I am forced to act on the best interest of my company I work for?

good question

sometimes managers will abuse their position of power and commit their employers to unfavorable contracts

this happens when the person pitching the contract and the person executing the contract are in collusion, where they conspire to plunder the resources of the company....like Chaney of Haliburton plundering US.

In your case, I don't see a clear and compelling danger of catching a suit as a result of this transaction. The manager who'd be executing the contract is not in collusion with you (i.e. you're not paying him to sign the damn thing) and the contract is not unfair to the company (no price gouging etc..)

Originally Posted by ChinkyDude

Finally, what if my source is a wholesaler that would only deal with retailers. My personal company would qualify as a retailer, however, the company I work for doesn't since they do not intend of purchasing the monitors for reselling. In this case, would this constitute a conflict of interest?

NO, I don't see any conflict interests here in the way that I understand the term.