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Thursday, December 4, 2014

Epic and the Non-Compete

My google alert for the QA class action lawsuit notified me of something interesting this week. Apparently, some of the local consulting companies were poaching from Epic. Thanks to some shady practices which have all been mentioned in the comments on this blog, Epic got Vonlay (which is in the process of being bought by Huron Consulting Group in Chicago) to agree to a two year non-compete for ex-Epic employees. Read the article here.

There are several noteworthy items. I've italicized quotes from the Isthmus article.
  1. The Healthcare IT world knows that Epic underpays and overworks its employees. As soon as the ex-employee goes to consulting, they start to make double the pay with fewer hours. "You can make $180,000 to $200,000 a year," says a consulting executive, compared to the $100,000 that same employee might have made back at Epic. "And for us, it's 40 hours billable, maybe 50 total including travel."
  2. Non-competes are bad for job-seekers, bad for companies looking for qualified staff, and bad for communities. There is, in fact, compelling evidence that broad no-compete clauses suppress economic activity and damage wage levels, according to the Ewing Marion Kauffman Foundation, which promotes entrepreneurialism. It reports that "job creation and economic growth will be hindered" by the clauses, and workers subject to strict noncompete terms suffer "lower compensation in their next job, skill atrophy and a degradation of professional networks."
  3. Epic is shady. Epic had successfully intervened at the 11th hour to insist that Huron not hire Epic employees within two years of them leaving the company. 
  4. Epic operates with questionable legality. [Speculation] circles around Epic fearing it might be treading on federal antitrust laws and being accused of anti-competitive business practices.
  5.  Epic doesn't want what's best for its customers or what's best for its employees. Epic only wants what's best for EpicJudy. Epic enforces its no-hire clause through "conspiring" with its customers, which include all of the hospitals and major physician practices, and through the third-party consulting companies.  Epic... effectively dictates job terms and other matters to the consulting companies, whose business is augmenting staff and fine-tuning software for Epic clients once their system is up and running. If those consulting firms fail to toe the Epic line, the company can deny them access to the technical documentation for a health system's Epic software. And that means the consultants can't do their job.
    Clients, on the other hand, are rewarded for agreeing to honor Epic's noncompete clause in their own hiring -- in the form of receiving substantial "preferred customer" discounts to their yearly maintenance fees.
    In the end, this means a hospital can't turn around and hire the young Epic whiz kid who just spent two years installing its Epic software. Nor can that Epic wiz kid quit her job and walk across the street to work for an Epic consultant who might have a contract with that hospital
  6. If there were enough backlash, Epic might back down further on the non-compete. Huron and Vonlay officials did not respond to queries, but Epic spokesman Brian Spranger confirmed that Huron had agreed to a two-year noncompete term. And then the shocker: "This is being reverted to a one-year term." Spranger offered no explanation in his email for the reversal. "We'd rather not comment on the policy as a whole." 
This was one of the more interesting articles I've read about Epic in a long time. Perception is reality, according to the pre-staff meeting powerpoint slides. I wonder how Judy feels about her company being perceived as a shady, strangleholding, antitrust-worthy corporate giant.

16 comments:

  1. I'm currently working at Epic (IS, 2+ years) and am considering leaving. The one year non-compete is making it quite hard for me to find jobs that pay competitively. Do you have any suggestions of where to apply? Which companies are willing to hire us right out of Epic? It doesn't have to be Epic-related work, just something that takes advantage of my current skill set and pays competitively. Thanks.

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    1. I recently left Epic and find that there is a good amount of work out there. American Family and CUNA are two big employers locally. There is also plenty of you are looking outside of the Madison area.

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  2. You might want to consider writing a new blog post about this feature of the story. One thing that was reported in the paper is that Epic is "encouraging" QAers to donate the money to Access Community Health. Epic's communications to QAers about the settlement have been very good at those things Epic does to explain how you can give the money to Access, or keep it for yourself, but choose carefully. One quickly gets a sense of what the "careful" choice is.

    What I'm surprised nobody has mentioned is that Judy's husband, Dr. Gordon Faulkner, is a physician for Access. I think Access is a worthy cause and have nothing bad to say about them. They do a lot of good work in the community. However, something feels very wrong that Epic has settled a court case over accusations of misdeeds towards its employees, and is exerting influence over those very same employees to send that settlement money to the employer of the founder's husband. If this isn't illegal, it at least feels unethical. And a bit arrogant and ignorant on Judy's part to think that it wouldn't be noticed.

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    1. Do you have a link to that report? I couldn't find anything in the links I posted.

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    2. I have information on this. I'm not sure about posting it/the blacklist etc. Is there a way to message you?

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    3. Leave a comment with a way to contact you (email, phone, directions to a locker in a train station). I won't publish the comment.

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  3. Now since Wisconsin is a Right to Work state does that mean that their non-compete is no longer legal? Maybe that's the silver lining with Scott Walker (not to get political).

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    1. I don't think the non-compete has ever been legal, but due to programs like Epic's Good Maintenance, Epic can make it incredibly worthwhile for its customers to not hire ex employees until Epic says they can. If it were truly illegal, someone would have sued by now.

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  4. I was talking with Sagacious about a consulting position, but after I told them my Epic non-compete doesn't expire until next month they said they couldn't talk to me until then. Is this normal? Might this be just for the Epic firms like Nordic and Sagacious, but not for the generalist ones like HCI and Oxford? I know my non-compete says I can't work for a consulting firm until after one year, but I need to start working as soon as it's up. I thought it was common practice to start weighing offers and even interviewing with clients prior to the non-compete ending?

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    1. A few years ago, Nordic and Sagacious had no problem talking to me before my non-compete was up. Like you, I wanted to hit the ground running on the day my non-compete ended. All I can guess is that things have changed since then. Epic has been putting pressure on some of the big names in Epic consulting lately, so it's not hard to imagine quieter restrictions since all the bad press from the Vonlay non-compete debacle.

      I'd expect you might have better success with the non-Epic specialists, like HCI, Parker, and the like.

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    2. As of November of this year, Oxford won't place you until your noncompete is up.

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  5. In terms of this non-compete, does anyone know if large national consulting companies like McKinsey, Bain, BCG, Accenture, Deloitte, and other similar organizations are included in this 1 year period?

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    1. I think I remember Accenture and Deloitte being on the 1-year list, along with IBM and some others.

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  6. Does anyone know if the Epic non-compete forbids someone within the 1 year to even be submitted for a consulting position, even if the person wouldn't start until after the 1 year period? Just trying to avoid complications...

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    1. There's nothing preventing you from building a relationship with a consulting firm, but (at least in my experience) many won't even talk to you until about 1 month before your non-compete ends.

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  7. Proprietary software system, expensive to maintain. Clients need help, but Epic continually places roadblocks on qualified people stopping them from working for them. And with this "new" certfication process, they are enacting more barriers to protect their cumbersome software (where is all that R&D going to?).

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