[dahart]

Multiple reasons. That it does happen should be reason to question your assumptions, rather than assume some obvious imagined alternative has been overlooked by everyone, right?

While poaching one employee at a time might be usually legal, attempting to poach all employees of a company might not be legal, and either way is considered unethical.

Paying off the investors may be the goal.

Eliminating the product or competition ethically may be the goal.

Buying the competition’s customers, and/or distribution channels may be the goal.

Acquiring the top talent, while giving them the expected reward for having bootstrapped a company, might be the goal. Founders are often uninterested in a salaried position for themselves, but may be interested in a return for the company and payoff for everyone in it - as backpay for their investment, completely separate from their salary going forward.

Also, your hypothesis is not accurate. Buyouts are not always, or even usually, massive. It’s common for them to be small and medium sized. It is definitely not a given that making persuasive individual offers would be any cheaper than an acquisition, let alone “so much” cheaper. Depends entirely on the situation.

[tiahura]

Unethical by whom? The now richer employees? Or the salty cheapskate?

[dahart]

Investors and founders to name two. Taking over a company via mass poaching would absolutely invite lawsuits.

The government for another. Hiring all the employees of another company is regulated, and it could be seen as anti-competitive behavior.

You’re thinking of individual poaching, not whole company poaching.

[tiahura]

I'll admit, as an attorney, this isn't my specialty, and every jurisdiction varies, but the ye olde common law of tortuous interference requires something more than mere competition, this is America, not the EU.

2 DAN B. DOBBS, THE LAW OF TORTS §§ 448-52 (2001)("you are thus free to induce my customers, employees, or suppliers to deal with you instead of me, as long [as] they are not bound to me by contract").

Restatement (Second) of Torts § 768 (1979) (stating that interference with a competitor’s contractual relations is permissible if it does not employ wrongful means and is intended to advance the competing interest).

Wal-Mart Stores, Inc. v. Sturges, 52 S.W.3d 711, 726 (Tex. 2001) (" we conclude that to establish liability for interference with a prospective contractual or business relation the plaintiff must prove that it was harmed by the defendant's conduct that was either independently tortious or unlawful. By "independently tortious" we mean conduct that would violate some other recognized tort duty.").

[dahart]

Correct, tortious interference has criteria, and making competing employment offers doesn’t necessarily or automatically meet those criteria, but it could if there are other factors involved. Again, it depends on the situation.

You’ve asked two different questions. One about legality and the other about public perception. There are lots of things that are legal and still considered unethical. And there are lots of things that might or might not be legal, that businesses avoid simply because there’s legal risk, and/or avoid because there’s risk of negative perception.

If everyone involved in a startup agreed to be individually hired, and divest interest in the startup, and there was mutual understanding on all sides, then there may be reasonable chances of success and no lawsuits. I think that probably has happened before. If not everyone agreed to it, and a company tried to acquihire all the individuals of a company forcefully without agreement by the investors and founders, there’s a high likelihood (risk) of legal conflict, and the likelihood will increase under US law if the acquiring company would start to look anything like a monopoly on the market in question after the unofficial “merger”, right?

[93po]

Agree with the other person - there's nothing unethical about hiring people in right-to-work laws and systems however you like. employers can fire at any time with no reason, the reverse also has to be true that they can hire at any time with no reason

buyouts are often massive considering the alternative, which is the cost of recruiting and possibly inflated salaries for the people you recruit, which frankly happens often in buyouts anyway

[dahart]

Like the other person, you’re arguing about individual hires, and not considering the implications of whole-company mass poaching.

Sure some buyouts are big. But plenty are small. Most aren’t “massive”. The histogram, I speculate, is probably something like the Zipf distribution: the frequency of buyouts of a given size is probably inversely proportional to the size, to a first approximation. https://en.m.wikipedia.org/wiki/Zipf%27s_law