Outsourcing

Harassed for attempting to transition from employee to consultant

When a TechRepublic member told his employer that he planned to resign and work for a small consulting firm (which had been a vendor), his boss threatened to sue the new firm. Find out what lessons you can learn from this sweet consulting opportunity that turned sour.

 

The transition from full-time employee to independent consultant isn't always as easy as it was for me. My employer encouraged me to take a job with one of our vendors, with whom I had been working closely for years. Soon after, my new employer and I agreed that an independent contracting arrangement would work better. I had full-time work all cut out for me, along with the freedom to take on other clients as needed. The arrangement really couldn't have been much better. Unfortunately, other IT pros have found the road to freedom a little rockier.

One member's transition tale of woe

TechRepublic member Mac_IT_Guy saw what looked like a great opportunity to move into a consulting role. His employer hired a small consulting firm for an earlier project. The consulting firm's owner mentioned his need for additional consultants, and Mac_IT_Guy pursued this chance to leave a job where he felt underpaid and boxed into a dead-end career.

His employer was not amused. His boss threatened to sue the consulting firm for "plucking the organization's valuable assets," and he bullied Mac_IT_Guy with remonstrations that his move was unethical because he left the company in a bind to pursue his best interests. His boss even suggested that Mac_IT_Guy (who was an IT Supervisor) brought in the consulting firm with the intent to create an escape route for himself. Since the consulting firm is small, it couldn't afford the expense of defending against a lawsuit even if they won.

Like most (but not all) participants in the discussion, I feel that there's nothing unethical about Mac_IT_Guy's move. He was an "at will" employee who could have been dismissed just as easily as he left. He even gave four weeks' notice and offered to stay on longer to train his replacement. If Mac_IT_Guy's employer considered him so valuable, he should have paid him enough and created the work environment that would make him want to stay. The old days of loyalty to the company above all else are long past (at least in the United States). Since Mac_IT_Guy didn't sign a non-compete agreement, there isn't any legal reason why he couldn't work for a competitor -- much less a vendor. There are no trade secrets at risk -- only the loss of what his employer treated as a "resource" in the past. I think the employer is just upset about having to find a replacement and is looking for a way to lash out.

Mac_IT_Guy is currently without a job because the new firm didn't want to risk getting sued by his previous employer. If I were in his position, there is no way I would go back to work for the former employer.

Lessons to learn about transitioning to consulting

We can all learn from Mac_IT_Guy's nightmare of an experience. When leaving an employer, don't give them any ammo with which to shoot you in the back on your way out. In short, say as little as you need to get your feet out the door. A jilted employer can be as wrathful as a jilted lover, and they'll be looking to catch any word from you that they might use for revenge. What would the employer have been able to do if Mac_IT_Guy was merely striking out on his own or hiring on with an unknown consulting firm rather than going to work for a previous vendor? In practical terms, how is this any different?

I don't think you need to tell your employer about your new gig. I would simply say, "I've decided to go into consulting" and leave it at that. If the employer presses you about your prospects, say, "That's privileged information." If they ask, "But you're not going to work for our competition, are you?" you can assuage their fears (if it helps to smooth your exit), but it isn't required if you didn't sign a non-compete agreement. You could also leave the option open that you might work for your employer again as an independent consultant if they should require your services.

I've known many companies that applaud employees who leave for better opportunities, wishing them luck and telling them to keep in touch. Those companies usually have no trouble retaining employees because they value them enough to make it worth their while to stick around. It's strange but often true that the companies that get the most bent out of shape when employees leave are the very ones that treat them poorly while they're in their employ.

Share your experiences

If you transitioned from being an employee to a consultant, how was your experience? What's your relationship like now with your previous employer? What pitfalls would you advise other IT pros to watch out for if they're considering transitioning to an IT consultant? Share your thoughts and advice in the discussion.

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About

Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant b...

113 comments
Mac_IT_Guy
Mac_IT_Guy

I know I need to move on and put it behind me. It's a challenge but I'll manage. Karma always comes around in the end.

JohnMcGrew
JohnMcGrew

If the employer considered Mac_IT_Guy so valuable and vital to the enterprise, they obviously didn't make him feel that way. I'm always amused when people who don't treat people well are surprised and upset when their most valuable people jump ship. (do note that the non-valuable people rarely jump ship) I'm glad it's worked out now, but am curious if he ever sought a legal opinion regarding the possibly actionable damage caused by the former employer. Since he was at-will and there was no contract to break, the former employer had no right to do what he did.

miller.carl
miller.carl

actually, I think I got extremely lucky in my conversion. My previous employer at the time had ran into some financial difficulties after years of extreme growth. I was the IT person on staff but also filled a number of other rolls throughout the years. When they needed to lay me off, they called a consultant vendor that had assisted me in originally establishing the network there. That vendor, who was also a good friend of mine agreed to hire me onto his consultant firm, and allowed me to work as a consultant at my old job, on top of being able to shop my own clients. It's really been a blessing and I can't thank either side enough for 'making' me transition from employee to consultant.

Mac_IT_Guy
Mac_IT_Guy

(Trying to place this post at the bottom, for the third time!) Thanks Chip and everyone who's contributed to this discussion. Just a final note and update - after many resumes, interviews, and solicitations from recruiters, I landed a job about a month ago. It's been 4 weeks in a medium-sized internet/technology company. The company is great, but my new ranking position is a notch down from where I used to be, as well as pay. But I'm ok with it for now, since I'm now learning new(er) technologies that weren't available at my previous job. Considering our economy is in recession and the growing unemployment rate, I feel lucky just to have A job. Hopefully advancement and growth is quick for me at this new company or new leads me to new paths. Thanks again for all your thoughts, suggestions, and advice. This was an extremely painful and stressful summer, but a valuable learning lesson for me. This ticket is now closed.

Sterling chip Camden
Sterling chip Camden

"I won't steal your business and you won't steal mine." I've had a few clients who also do consulting, and there have been a few times in which we were almost in competition with one another. But I always value the relationship with an existing client over "two in the bush", as it were. So we always worked out an understanding of who would get what. I'd rather have a client that I can collaborate with -- but in case I run into a nasty one, I'd rather they don't have a non-compete clause to use as a weapon. But then, I do compete pretty well, if I do say so myself. ;)

JohnMcGrew
JohnMcGrew

I'd sue the former employer for restraint of trade, or something of the like.

MidwestITLady
MidwestITLady

I've hired various consultants over the years, and the vast majority of contracts included some type of non-compete agreement (in both directions). I thought it was fairly industry standard. I think it makes sense for both sides.

keith
keith

I think that from a business perspective, it is unethical to "poach" a client's staff, although clearly in this case it does not look like there was anything in writing to mitigate this risk, but in my oppinion, there should have been. Non competes and non poaching agreements are useful for companines because they define the intent: to deliver a solution/product and not to provide networking, opportunity advancement, or other spin off activities. The relationship between the consumer and the supplier is an asset for both principals, and I feel that it is disrespectful and unethical to use that company relationship to extend personal career goals. If this becomes too common, then the result will be that the companies will not trust their staff, and they will compartmentalize and isolate people, instead of allowing for increased collaboration. This scenario may stifle development and progress for companies, and staff alike. It costs considerable money and effort to acquire and train new team members, and if companies you work with "poach" from that resource, and employees use their company's contacts list assets to further their personal agenda, I would say that is not a good or rewarding business practise. Further, the company doing the poaching may not be a good company to work for, and they will likely not trust the new hire, after all, the new hire was more than happy to use connections provided by their current employer and leave their last post for greener pastures in short order. I think the answer in this case: The employee recognizing an interest in his skills, and opportunities for him in his market should have decided to leave his job and strike out on his own, bravely, and without jumping immediately to another company. At that point I think that the consultant could comfortably maintain good relations with his original employer, and build on his experience to contact other employers and offer his services, at that point, unless there was some kind of non compete agreement, I can't see how any parties could be upset, and I don't think it would burn any bridges. Keith Waldron

reisen55
reisen55

I always love it when management demands 30 days notice or two weeks notice if you intend to quit, and yet you can be fired on 1 days notice. My daughter was part of the 330 person dismissal at Foxton's last year and got a new job within 4 weeks, very lucky. I used to believe in loyalty to the company that pays me, but no more. And outsourcing has made it FAR worse, where valuable employees are treated as so much kindling wood and sold down the river to another employer who promises GREAT THINGS FOR YOUR FUTURE, which means 1 year job and unemployment thereafter. I have enormous sympathy for the MAC guru here and do wish him well. I might have dome some groundwork first before leaving, but that is a minor point, maybe not possible really. American management does not care for any employee anymore, we are all expense items these days.

agonzalez
agonzalez

Wow, a valuable lesson indeed. Im in the other side of this situation (Im the boss or at least they call me that), I have 8 people working with me and we do a lot of outsourcing for software development but we dont have the policy to retain people or take people from other firms. What we do is add a clause in the contract: If any of the two companies like an employee and want to hire all that is needed to do is ask, we know that the professional development and personal growth comes first and we have no right to take the opportunity away, especially if they cant grow up more in the company. Taking good experiences from doing that: we have excellent personal (developers and tech support) and find out that previous workers are improving in their life (professionally and personal).

seanferd
seanferd

It is especially funny if "escape route" is actually the employer's phrase. "Why, sir, do I need an escape route?" It implies that there is something to escape from. Non-competes are junk, anyway. Bad for business. The boss, here, is a pompous ass.

dinosaur_z
dinosaur_z

My first programmer/analyst job was at the HQ of an insurance group. They had excellent in-house training and okay benefits, but as typical of banks & insurance, just paid industry average. When I was hired there were 5-6 of us all starting at the same time. After almost 3 years people started leaving for better opportunities and pay to a local consulting & contracting firm. There was no opportunities for advancement. I was the 3rd or 4th to leave. I left for 10% better pay and more interesting work. I heard that when I left one of the top managers threatened to sue the consulting company for "stealing" all his good employees. I don't think that ever happened because at least 4 or 5 more people left the ins. co. for the same consulting co. Moral for bosses: If you want to retain your good people, you need to pay them above average and provide opportunities to grow in their careers.

mikifinaz1
mikifinaz1

He failed his first test for a consultant.

Sterling chip Camden
Sterling chip Camden

It seems to me that some employers consider themselves as parents or benefactors to their employees. It's all "Clean up your mess" while they're around, but "How could you do this to me?" when they want to move out. Those bosses probably have dysfunctional family lives as well. Employers need to understand that the employer/employee relationship is at will and (should be) mutually beneficial. I agree that Mac_IT_Guy could have been more aggressive legally -- maybe he didn't want the expense of getting a lawyer involved, but who knows? It might have saved him a lot in the long run.

Sterling chip Camden
Sterling chip Camden

eventually made it. Glad to hear you're back in business -- best wishes for future opportunities!

Sterling chip Camden
Sterling chip Camden

... but never a non-compete. But why would I ever want to go into competition with one of my clients? If I see something they could do better in their market, then I'd rather help them to do that than to try to tackle that whole market, or even some segment of it, on my own. I can make more money with less effort by helping my client rather than pissing them off by stealing their opportunity. Now, if a client refused to take my advice and thereby left a huge opportunity lying on the table, I would consider taking that opportunity for myself, without any pang of conscience.

Mac_IT_Guy
Mac_IT_Guy

"The employee recognizing an interest in his skills, and opportunities for him in his market should have decided to leave his job and strike out on his own, bravely, and without jumping immediately to another company." Since I had had no prior experience consulting solo, nor a client base, seeking employment (W2) with a new company was what I wanted and pursued. But why did my old boss still keep paying me just 29% compared to my location/market (Payscale.com)? If they needed me so badly at least pay me the median (which I've been asking for two years). So like any employee, I sought work, found it, and took it since the old job was a dead-end. All the history and info is in my prior posts. Unfortunately I have no time to rehash all the details, and now need to focus on my future, not the past...

herlizness
herlizness

> it also costs too much of your own money, time and sweat over many years to have your working life owned by some employer just because they find it convenient. If an employer thinks an employee is SO valuable that they must keep him/her indefinitely they can easily follow the time-honored tradition of offering that employee a term contract. But that's not what typically happens; they want to fire at will but foreclose leaving at will.

Sterling chip Camden
Sterling chip Camden

But most companies make no guarantee of continued employment. They're free to let the employee go, and the employee is free to walk. They have an agreement only to do a specific job for as long as both parties want it to continue. Let the employee decide for herself/himself if another opportunity is better for them. The employer has no say in that. Why should they be allowed to artificially restrict the market?

Sterling chip Camden
Sterling chip Camden

We have to remember that the employer's first concern is to make money. But many employers are short-sighted on that point. The company can be far more successful if they have employees who are internally driven to perform. Rather than "carrot and stick" motivation, employers should encourage employees to develop their fullest potential -- even if that means moving on at some point. The attitude that "we want you to make the most of yourself" spreads in a company and increases motivation to excel. But most employers are happy to give as little as possible, and so they get as little as possible in return. The flip side of that is: don't always go for the job with the best pay and benefits. Opportunity pays far more in the long run.

seanferd
seanferd

That's a very non-dysfunctional working environment you've got there. I usually only hear about your type of business practice in books or feature articles in periodicals. Kudos, again!

Sterling chip Camden
Sterling chip Camden

That's the way it ought to be. The most valuable resource is people -- individual people. But unlike some resources they can't be kept in a tupperware until wanted. If you don't let them grow, they sour quickly.

Mac_IT_Guy
Mac_IT_Guy

...and on Friday my boss (or rather had his executor, the Ops Manager) offered to pay me to stay another two (2) more weeks. They claim the replacements I've trained for the past three (3) weeks may not yet be capable of doing my job. But they said I could go on interviews and take phone calls, and also gave me a positive letter of recommendation just for staying the previous four (4) weeks since I gave notice. I guess they're trying to make peace? (They keep saying it would have been fine for me to work for any other consultant, not just one who was hired by them. It's total BS - there was no signed agreement preventing this - but there's no point in arguing with them because they won't ever change their viewpoint - short of me suing them and winning). This is an odd situation, but since I have no income at the moment, and it's usually easier to get a job while employed, AND I could beef up any Applescript/Server deployment/misc skills while being paid there, I agreed to stay. It's painful, but will soon be over in two weeks. My hope is I find employment soon and leave on "good terms" with them by helping them out again (not that I feel anything I've done would be deemed as "bad). If there weren't some self-interest in this for me, gee I'd sure feel like a (bigger?) sucker. But under no circumstances will I stay and work for these people long term. I'm just trying to preserve my side of the bridge (to be professional), but I still feel they burned their side. HARD but valuable lesson learned. It's a little embarrassing I didn't learn it earlier, but better late than never.

Sterling chip Camden
Sterling chip Camden

All they do is piss people off. The only time I can see that they might be justifiable is if you're in an industry in which you're entrusted with extremely sensitive competitive information. But even then, 95% of what businesses consider sensitive competitive information isn't worth stealing.

Sterling chip Camden
Sterling chip Camden

... one of three things: a) your boss doesn't know your TR handle b) he/she has a very good sense of humor (not likely from your description) c) you want to lose your job

Four-Eyes
Four-Eyes

maybe the pompous ass thinks you're trying to escape from him... :D

Sterling chip Camden
Sterling chip Camden

When an employee loses someone, it means that they found: 1. Better pay 2. Better working conditions 3. Better opportunities Which means that the hiring party perceives more value in that person, and shows it by providing those benefits. Thus, losing someone can never be the fault of the hiring company or the employee -- the erstwhile employer needs to look at themselves and ask the hard questions.

Mac_IT_Guy
Mac_IT_Guy

...but could you elaborate please?

JohnMcGrew
JohnMcGrew

...might have been a paid vacation. Personally, I'm not a big fan of taking legal action. But when one party perpetrates evil for their own selfish reasons like the former employer did, I say the gloves should come off. I agree with you; the relationship between employer and employee should be mutual. And when it's not, people get exploited. I think one of the biggest problems this country has (and not ours alone - much of the industrial world is inflicted with this) is the dysfunctional relationships that exist between employers and employees. And no party is innocent. The populist notion is that it's always employers who are exploiting employees. But it works both ways, especially when employees expect employers to be responsible for their problems as well. This dysfunction eventually makes employees completely dependent on the employer, and sometimes almost like a slave. It's one of the reasons I like being independent as opposed to an "employee". Kudos for Mac_IT_Guy for not falling into that trap.

MidwestITLady
MidwestITLady

I think the issues are more pronounced with consulting firms as opposed to independents. An employer does not want a consulting firm to hire away their tech experts (right after they jointly implemented a successful system for example). And a consulting firm doesn't want an employer hiring away their talent either. I'm just saying that I can understand why they were added to contracts. The consultants from the firms I've worked with have not complained (at least to me), nor have my staff members.

BigPaisan
BigPaisan

Hey Mac_IT_Guy, you most definitely did the RIGHT thing. In today's market, and moving forward, you MUST look out for yourself, as it relates to career advancement. Either your present employer and you are on the same page and they allocate resources to help you get there or you move on. You should move forward, don't ever look back, and if you ever DO discuss it with the previous employer, you MUST mention that they are just as obligated to care for a precious resources (by paying good wages) as they are for their clients. R.

casimiro.barreto
casimiro.barreto

I agree with Sterling "Chip" Camdem. And about that "training cost" crap, well in this case there are specific contracts. Question is: menacing to sue a third part due to private choices made by an employee, in my point of view, consists in an illegal use of Justice and in the current case causes moral and material damage to the ex-employee. I guess the ex-employee is in his rights to run for compensation in this case.

reisen55
reisen55

We are all in the business of making money of course, and employers should give (often do not) reasonable support for their staff. But often they seem to run entirely the other direction, going out of their way to do employees an injustice when not deserved. My former manager, who re-assembled the network following September 11th, was terminated by the larger IT organization in our company (good opportunity that to seize control) because he was smart (read that: a thorn in their side) and they were dumb(read that: they thought they were smart). He saved a ton of material and was fired two months short of his five year time in with the company, which wrecked his accumulated pension. Reason to be bitter? You Bet. Later, 140 of us in IT were outsourced out with the promise of 80% rehire by a temporary outsourcing firm that came in to pick up the wreck left behind. Many promises made, and only 40 offers made. 40. And why only 40? Ever read the federal WARN act? Terminations of more than 100 staff require 60 days notice, not the 30 we were given. We got 30 days notice and severance. Cute. Very cute indeed. So why should I have loyalty to my employer? I have mostly contempt now but have immense loyalty to my JOB which is to support computers to best of my ability.

gatodeneve-21506117697133215450152118663227
gatodeneve-21506117697133215450152118663227

I was in a similar situation a few years ago. I had been in a System Admin position that did not offer any advancement and I had completely outgrown. A consulting firm that my previous employer did business with offered me a position that I accepted. Once my previous employer found out that I was leaving for this vendor they contacted them and threatened to stop doing business with them if they hired me. This was followed by a call from the consulting firm rescinding their job offer unless I could convince my boss to continue doing business with them. My previous employer refused to change their mind and I was basically jobless in a matter of hours. The biggest mistake that I made was not getting the job offer in writing. After a few days, my previous employer realized that they had no legal leg to stand on and contacted the consulting firm and gave them ?approval? to hire me. After everything that had transpired, I kept true to myself and took the high road. I worked my full two weeks, gave them all documentation and fully trained my replacement. I have been with my new employer for three years and it has been the best career decision I have ever made. I know this is a very stressful time, I have been there. But remember, everything will work out because good trumps evil every time!

The 'G-Man.'
The 'G-Man.'

I would have walked along time ago - they screwed you over and you just sit there. WOW.

Sterling chip Camden
Sterling chip Camden

Hope you find a great opportunity -- maybe working for humans for a change. Let us know how you do. Those of us subscribed to this thread would love to hear how it all works out for you.

seanferd
seanferd

Non-disclosure of sensitive ideas is fine, if necessary. Barring an entire person from working in the type of business he is good at is just ridiculous. In a locality, after a certain amount of turnover, no company could hire any new employees with experience. It is a type of "shooting yourself in the foot" for business.

seanferd
seanferd

a) No, and he probably couldn't find TR if he wanted to. a)1) My main job isn't in the tech industry, but my personal sideline is PC support, so some of this doesn't directly apply to me anyway. b) Horrible sense of humor. (Thinks he's funny, but he's not.) c) I just might split anyway, but I do have loyalty to my customers that outweighs dealing with my frequently moronic boss, as well as some flexibility in my schedule. c)1) I wasn't referring to my boss, but the boss in the article, if that makes any difference. The better managers I've had in the past would tend to agree that the boss in question was a bit over the top. Even if they shared some of his reasoning, the behavior described would have been right out.

seanferd
seanferd

As soon as the boss opened his mouth, he added one more reason.

Sterling chip Camden
Sterling chip Camden

that you should only tell your client/employer/vendor what they need to know. Not only can too many details get you in trouble in a case like this, but when dealing with a work problem too much detail can also be more confusing than the original problem they called you in to solve.

JohnMcGrew
JohnMcGrew

Since there's no good motivation for the new employer to come forward on your behalf, then it's basically a he-said-she-said scenario, which doesn't make for a good case. But if you could assemble a group of other former employees who experienced the same thing, my guess is that the possibility may still be there. Either way, at this point perhaps it's best if you can just get over it and move on. Remember, the best revenge is success. One thing I'd like to know is if the other employees that are still at the old employer are aware of all of this. If I were one of those people, I'd like to know, and I'd be documenting everything that happened to me in similar regard. It would probably be useful in their future.

Sterling chip Camden
Sterling chip Camden

It would be nice if you could do so while taking away some cash and a legal victory. But if not, you'll just have to write him off as not worth your worry.

Mac_IT_Guy
Mac_IT_Guy

Hi Chip and JohnMcGrew - Thanks for your replies since my previous post - I just read your posts today. It still stings and burns me up to think about what happened with my previous employer - make no doubt. I'm not a litigious person, and think going to court would be a stressful and long ordeal. But it would certainly feel good to feel some justice served in the end, which I still feel was lacking. It still bothers me so much that when I accidentally ran into my old boss at the local movie theater last weekend it made me want to leave the building. It put me in a bad mood for a while. My labor attorney said that if the potential employer/consultant (who was going to hire me) would admit that he didn't since he felt threatened, then I we have a case. But since my sly old employer never actually spoke to the new one, but only delivered verbal threats through me, then it might be harder to pursue. The potential employer has not agreed to admit this happened, since I think he just wants to avoid the whole issue. Lately I've been contacted by a few people who went through the same thing I did when they left the old employer. They're now shared some stories and are still pretty upset with how they were treated. Maybe we can all rally together and still seek some justice. Wouldn't that be interesting.... At least now I have income at a really good company that treats it's employees well. Thanks for your thoughts and input again as always.

Sterling chip Camden
Sterling chip Camden

They don't realize that they could be free -- but they often do realize how dependent they are. How many times have you heard, "I'd better not bring that up -- I could lose my job!"

JohnMcGrew
JohnMcGrew

Since you are free to walk away from the situation should it turn sour, or at least no longer to your benefit, you get treated with far more respect than someone who has become dependent on the employer. That's a big deal that I think many "employees" do not realize.

Sterling chip Camden
Sterling chip Camden

Indentured servant, at least. Yes, I've seen many employees lean on their employers to go above and beyond: helping them work through rehab or various family issues. It's nice of the employer to provide that kind of support, but it does come at the price of the employee becoming dependent on that relationship. As independents, nobody is going to help us out of a ditch except ourselves. But we can also look our clients in the eye as equals.

NickNielsen
NickNielsen

[i]So why should I have loyalty to my employer? I have mostly contempt now but have immense loyalty to my JOB which is to support computers to best of my ability.[/i] That's loyalty to your [u]work[/u]. The job is what you have; the work is what you do. Sounds like you're in the same situation I am: I love my work, but the job stinks.

Sterling chip Camden
Sterling chip Camden

I know you'd rather be employed than a poster boy for the evils of non-competes, but thanks for sharing your story. You've taught us all a lot!

Mac_IT_Guy
Mac_IT_Guy

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/07/BAUH12716R.DTL&tsp=1 This news was published on the same day as Friday, 8/8/08 my last day of my six (6) weeks notice. For the last four (4) weeks I've trained my replacement, as well as his new replacement. I'm now jobless, and still sending resumes out daily. Yes, my biggest mistake too is not getting an offer letter in writing. Maybe with the help from my employment lawyer, I could get my old employer write a letter to the consultant giving their "approval" to hire me without any risk of suit from the old employer.

buyani
buyani

Thanks will let u guys know this site contrubutes a lot to my career

Mac_IT_Guy
Mac_IT_Guy

....I get it. OK - Thanks for clarifying.