The Other Side of the Disloyalty Coin

The following blog is  Part 2 of an article published by PBEL in the Christchurch Star in the 1990’s. Part 1 is presented in our blog "In the Name of the Global Financial Crisis - Redundancy and Loyalty". This blog illustrates the risk employers face from employees who have no sense of loyalty. I am astounded by the following cases. Call me old fashioned if you like but I consider loyalty, trust and confidence are the essence of the employment relationship.

First Case:   Peter interviewed a candidate for a sales rep vacancy, who shall be called Bill. Bill had a small business that sold a product that was not in competition with anything Peter sold. Bill allegedly employed someone to sell his product. Bill disclosed this in the job interview and with these assurances Peter gave Bill the job.

Six months after he employed him, Peter discovered by chance, that Bill had extended his product range to cover all that Peter sold, had submitted a price to one of Peter’s clients in the name of his own business and had been carrying on his own business in work time. He found his promotional material containing Bill's company logo, in Bill's briefcase: Well actually in the briefcase Peter had provided Bill with.

Loyalty, trust and confidence are the essence of the employment relationship.

Peter was shocked. He had trusted Bill and entrusted his entire client base into Bill’s care. Bill had diarised contact names and was in a position to approach Peter’s clients and was clearly doing so. When Bill was asked to explain, he expressed outrage that his briefcase had been opened and angrily claimed there had been a breach of his privacy. Not surprisingly Bill's employment ended abruptly and of course he made no complaint to the Privacy Commissioner.

Peter had to drop everything and take on the sales role. Fortunately his reputation with many clients was such that they were prepared to stick with him. Some clients had been offended by Bill’s actions and would not give him the business. But not everyone was so loyal to Peter.

Second Case:    Jack employed Frank in his practice. Frank planned to set up on his own. He obtained Jack’s client list, leased premises nearby and prepared a letter to all Jack’s clients saying that they were welcome to come to him. He convinced some of the support staff that his business venture would succeed, Jack’s would not and they should join him. Before Jack discovered what was happening, Betty one of his staff put in her notice. She then arranged for a few days off for medical purposes. While she was off work Frank made his move. When she was fit enough, she went to work for Frank while still being paid by Jack. Jack obtained a court order restraining Frank from further using the client information he had taken and could sue him. He sacked Betty.

Jack and Peter can claim there had been a serious breach of the duty of confidentiality and fidelity and contract. Their former employees who placed no value on loyalty, should remember that a good reputation lost is not easily recovered and a bad reputation earned maybe the end of a career.

Loyalty is one of the features of a successful business. Employers, employees and their advisers should remember this.