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Disgruntled employees: What are the risks, what are the remedies?

HR professionals know the tips and tricks to keep from making bad hires. There’s never any certainty, but smart professionals armed with strong interviewing skills and solid job descriptions stand a better than good chance of weeding out bad hires on the front end. But what does the savvy HR pro do about “bad quits” – people who spew venom against their former employer or cause other harm as they head out the door? Does HR have any recourse when someone is not just going away, but going away mad? 

Some angry people will resort to making spiteful social media posts. Others will steal an employer’s confidential information or equipment, destroy company property, talk coworkers into quitting with them, or engage in other forms of mischief.

Disgruntled employees can disturb the peace
Sometimes the trouble can be extreme. In 2010, an employee who lost his job at a Texas car dealership wreaked havoc on his former employer when he used an ex-coworker’s computer password to disable motors and set off horns remotely on more than 100 vehicles his old employer had sold.

News reports explained that the dealership installed the devices to keep cars from starting if buyers didn’t make payments and to help the dealership find cars it planned to repossess. The company figured out what was causing the trouble and the ex-employee was arrested, but real damage had been done.

Not all disgruntled former employees are so creative, but less flamboyant mischief can still cause serious damage. Employers can take steps, though, to ward off problems.

What to do
Michael P. Maslanka, managing partner of the Dallas office of Constangy, Brooks & Smith, LLP, has some ideas to help employers reduce risk:

  • Be flexible on employee requests. Maslanka says employers save themselves trouble by not needlessly angering employees. He says he once had a case in which an employee had kids in college and wanted a raise. The employer wouldn’t consider his request because it had policies that prevented an employee with his length of service from going to a higher pay level. When the employee was turned down he left for another job, and the employer sued him and his new company. When an employee works under noncompete, nonsolicitation, or nondisclosure agreements, employers may have recourse if the departing employee goes to a competitor or uses the previous employer’s confidential information. Agreements that are seen as too restrictive, however, will be deemed unenforceable. In the case of the employee turned down for a raise, the former employer was able to settle, but the employee ended up staying at his new company and the old employer paid more in legal fees than the raise request.
  • Accept resignations and move on. When employees are going to a competitor, it’s important to guard against giving them a chance to do damage. “Unless there are exceptional circumstances, when someone resigns accept it,” Maslanka says. “Do not–repeat, do not–allow them to stick around for a couple of weeks. While volunteering to stay for a few weeks is professional, do not let them stay. No good can come of it.”
  • Check the computer. A departing employee with a flash drive can make off with an astounding amount of confidential information, so Maslanka advises checking the computer of a departing employee who leaves unexpectedly or gives any signal of taking confidential information. “A good forensic examiner can determine if the employee downloaded information or sent it to a remote site,” he says. “Judges do not like this, and it will give the employer the edge in any litigation.”
  • Be smart about noncompetes. Employers can use noncompetition, nonsolicitation, and nondisclosure agreements to protect themselves from employees quitting to work for competitors, talking coworkers into leaving with them, and taking confidential information such as customer lists, but the protection may be limited. Such agreements must be deemed “reasonable” to be enforceable, since judges are reluctant to impede someone’s ability to make a living.

Maslanka warns against going overboard with noncompetes. He says he’s seen companies requiring everyone to sign an agreement–even people in positions that don’t warrant them. Instead of taking a blanket approach, he says to “have those people sign them when you really need to protect confidential information and/or good will” and tailor them to the employee, including just the information the employee actually has.

  • Assert your rights. If an employee does go to a competitor in violation of a contract, the employer should be prompt about protecting itself, Maslanka says. At a minimum, the employer should send a letter to the new employer explaining that the new hire has confidential information that shouldn’t be used in the employee’s new job.

Also, an employer may need to file a lawsuit asking for injunctive relief. “Do not sit around and wait to do this,” Maslanka says. “Injunctive relief can be given if there is imminent harm should the status quo not be maintained.”

“Immutable Law of the Ex”
Unhappy employees can often join competitors or start their own competing businesses regardless of whether a contract is implicated. And when those employees are out for revenge, employers need to be on guard. Researchers in Ireland highlighted a lesson for employers in their study of a theory coming out of professional soccer.

Federica Pazzaglia and Karan Sonpar of University College Dublin and Scott Flynn, a consultant with Ernst & Young in Dublin, studied what’s known as the “Immutable Law of the Ex,” which suggests that players who have left a team on bad terms often play unusually well when their new team plays the old team. In part, players excel because they’re familiar with the routines of their old team, but evidence shows that a yearning for revenge plays a bigger role. The researchers maintain that a similar mindset is present in business.

“Disgruntled employees take with them strong motivation to exact revenge on their former employers,” the researchers wrote in the Summer 2013 issue of MIT Sloan Management Review. “These can be very strong forces, moving people to outperform themselves in their new company and produce superior results. Former employees also possess knowledge of their prior organization’s tactics and have continued access to customers and suppliers, with whom they may have close personal ties, and who may be willing to move their business to the new organization.”