People, Talent, Teams

Q&A: When trust is irreparably damaged

A shocked and angry business owner from Woolwich, New South Wales asks:

I just had coffee with a competitor. He put a printout on the table of an email between my managing director and one of his staff. The thread was a venting session but my managing director disclosed revenue and profit figures, plus a range of HR sensitivities. What on earth do I do?

Kenelm Tonkin, Chairman, Tonkin Corporation answers:

Keep your cool. Maintain control. True, this is an amazing situation which I am certain arises rarely. You probably have a range of emotions: anger at your managing director, embarrassment at your staff selection and gratitude to your rival for the information. The question is, what do you do?

First, pay for coffee and thank your competitor. He did not need to assist and it’s the least you could do. Second, assuming you have a regularly communicated policy of email review in your company, check the breadth of your managing director’s indiscretions. This is imperative. The behaviour falls into the realm of fiduciary duty breach. Third, you should draw on your succession planning processes to ensure you have a replacement managing director ready if necessary. Fourth, gather the evidence, both email threads and employment agreement. Weigh the evidence and decide the company’s position. Fifth, you should schedule a meeting with your managing director indicating the purpose is to review standard employment conditions. Organise a trusted advisor to be present, perhaps a lawyer. Sixth, at the meeting, ask the managing director to read the standard confidentiality clauses from her employment agreement. Further, ask her whether she would agree that staff are in breach if they make unauthorised disclosures about revenue, profit and talent to competitors. Seventh, ask your managing director if she has breached these provisions. Allow her to respond and have your witness make notes of this. Eighth, if there is an admission, qualified or otherwise, offer her the opportunity to resign immediately without notice. If there is a denial, confront the managing director with the evidence. Allow a further response, and have this noted. In all but a defence that the alleged email thread is a fiction, read the summary dismissal provisions. State clinically that the company relies on them given the evidence and despite her denial. Ninth, hand her your pre-written summary dismissal letter, collect her keys, access cards, phone, laptop and cancel her passwords. Tenth, walk her from the premises. Trust has been irreparably damaged and the relationship cannot be salvaged.

Post script: your employment lawyer will caution you against this course of action, siding instead with a low-key acquiescence to full notice. You should always seek counsel. However, there are times in business when an entrepreneur must stand on principle. This is such a time!

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