Sunday, February 04, 2007


For four years one of my readers in northern California worked for a privately owned company at which, she says, she loved her job and respected her co-workers. Then, a few months before Christmas, she learned something that none of her co-workers knew: The company would begin layoffs around the holiday.

"My heart told me to stay and sink with the ship," she writes. "My head told me to start looking for another job as a backup, in case the flood waters got too high."

By the time the layoffs hit, right before Christmas, she was already in a new job.

"Just about everyone was oblivious to the situation," she writes. "I tried to be ethical and not tell what I knew."

Now, however, she wonders if she did the right thing. Was it right to keep quiet about confidential information? Or should she have sounded the alarm?

The dilemma in which my reader found herself is a classic one: Do you stay loyal to your company and not disclose information that could cause panic? Or do you stay loyal to your friends and tell them what you know, even if you promised to keep the information confidential?

I pressed my reader about how she found out about her company's fortunes, which obviously makes a considerable difference in what obligations she may or may not have had: Was she part of the executive team making the decision about layoffs? Did she overhear a conversation at a private meeting? Did she come across documents that someone had carelessly left in the open?

As it turns out, the answer is none of the above. There was no way for her or any employee to know what was in store, she says, unless he or she happened to be one of the less than half a dozen people who made up the company's executive team. These executives had been ordered not to disclose the information to anyone else, but one of them broke that confidence by telling my reader and asking her to keep the information confidential.

Apparently that executive did not feel bound by his commitment. My reader did feel bound by hers, however, so she kept quiet -- a decision with which I fully agree.

A more interesting question, and the one she should have asked me, is this: What should I have done when the executive offered to tell me confidential information about the company?

That executive was wrong to single out my reader. Not only did he betray the trust of his colleagues running the company by breaking his word to keep quiet, but also he put my reader in an awkward position. While other employees believed that their jobs were secure, she knew that hers wasn't and could plan accordingly. This gave her an unfair and unasked-for advantage over her co-workers, some of whom were doubtless personal friends.

The right thing for my reader to do would have been to stop the executive as soon as he offered to share confidential information, and either tell him that it was inappropriate or tell him that she was uncomfortable hearing the information. If he told her the information anyway, she should have reported the conversation to the other members of the executive committee.

That may seem harsh, given that the executive was probably trying to do her a favor, but if she truly respects her fellow employees as much as she says she does, she owed it to them to tell the executive committee. Who knows how many other people this executive selectively told and why he told some and skipped over others?

The other executives should know that, if they want to treat all employees fairly, they need to deal with this untrustworthy executive first.


Anonymous said...

If you want to keep a secret, then tell NO one! It's that simple! When you tell a secret and ask that it remain so, you might as well stand on the rooftop and make a loud announcement. I have learned that people are not confidants. First of all, they like for the individual to whom they are telling the information to feel like they are on the outside and is being trusted. Secrets should remain that way, until it's time for all to hear. Sometimes it should remain a secret forever!

Charlie said...

In this particular case, I don't think the lady did the right thing. When the person who spilled the news betrayed his trust, I have always been of the view that once you hear news like this, you keep silent. However, since the person who spilled the news on this situation was in management, the lady should have gone to managment to let them know the situation. This is a must to keep the unity of the company on a high plane. You can't have a member of managment spilling secrets, even though he may have thought he was doing the lady a favor

Anonymous said...

Let me see if I understand the real ethical delemna here: 1) management knows "a few months before Christmas" that they will be laying off workers "around the holiday". 2) management wants to keep this info a secret from all the workers whose jobs will be affected. Is this ethical? I think not. The layoff of workers around the holidays, which is the worst possible time for job hunting and probably the worst time for anyone to find out there will be no pay check in January to pay off the holiday bills. Ethical managers give their workers time to digest the layoff info,tighten their financial belts, and sometimes even help them find new jobs. The woman who remained silent should have told every worker in the business. If every worker knew the score: 1)all would have an extra few months to prepare for the layoff, 2) management might have been forced to tell their loyal workers the truth.

Ann Handley said...

Years ago, I was on the other side of this issue, in that I was the (admittedly inexperienced) executive who singled out an employee and gave them the heads up about impending layoffs. (Actually, it was 2 employees.) At the time, I was acting out of friendship -- I had a close working relationship with those employees, and I considered them friends. It was my attempt to protect them from difficult -- if not disastrous -- news. But in my situation, the employees didn't keep mum. They actually blabbed it all over the office to those they considered *their* friends -- betraying *my* trust (!)

I think you are spot-on, Jeffrey, in your assessment that the executive should have felt bound by his original promise to his executive team to keep the news quiet. He did betray the trust of his colleagues running the company, and he did put your reader in an awkward position. He -- and I -- ignored a greater responsibility, and an understanding that executives at his level need to play by certain rules.

Anonymous said...

Where are the ethics in committing a lie of ommission, which is what the company did by not telling employees of the layoffs?

But I guess when talking about "business ethics" we're really talking about to what degree we can be unethical.

fantomesq said...

Ethical actions are those that are moral or right. Loyal actions are those that are steadfast in allegiance or duty. They do not necesarily correlate.

This scenario pits four competing loyalties: loyalty to the company, loyalty to coworkers, loyalty to the executive and loyalty to herself.

As a general rule, one owes no duty of loyalty to another unless some relationship exists between them. The employer hired the employee and trusted them with the intricate dealings of their business in exchange for a paycheck. So long as this relationship endures, the employee owes the employer to not only keep its secret but, as others have noted, to report the stray executive. This relationship, however, is waning since the employee has been notified that she will be laid off. In weighing competing loyalties, it will probably lose.

The employee's loyalty to their coworkers does not arise out of the official relationship but out of friendship. Friendship requires both parties not only to do no harm but further to do affirmative good when possible. The employee owes their friends the "heads up" so that they will not be caught off guard to their detriment. This is not a duty the employee owes to non-friend coworkers and the employee has no reasonable expectation that their coworkers won't similarly pass the word along to their own friends. This loyalty weighes fairly strong in this analysis.

The duty to the executive is troubled. Her duty to the executive only differs from her duty to the company at the point that the executive breached his own duty to the company by telling her. Assumedly, the executive only told her out of friendship which as we saw above imposes no reasonable expectation on the employee not to do the same. Thus the promise that the executive extracted to not tell anyone was improper. She still owes the executive the loyalty of friendship that he has shown her but this probably pales to the loyalty to her friends.

The greatest loyalty that the employee owes is to herself. She has been placed in a difficult situation by gaining advanced knowledge of the layoffs. She owes it to herself to take good advantage of this notice by seeking out another job. She also owes it to herself to not act so as to imperil her remaining employment with the company by flagrantly disobeying executive wishes and potentially make her job search more difficult.

The best course of action would be to quickly find alternate employment, submit your resignation from the company and notify your friends of the pending layoffs. This severs any loyalty to the company and the executive, while also covering your loyalty to yourself and your friends. Assuming that immediate employment is not forthcoming, she should still notify her friends but with the expectation that the company might terminate her for it. This sacrifice play would be made for the greater good.

Assuming that the executive who told her was not included in the layoffs, he has a more clear cut loyalty issue. His continuing loyalty to the company remains strong due to the executive position he holds and since his employment will continue. This should trump any friendship interest he might have with a subordinate. His breach of this duty to the company was likely a firing offense.

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