Newspaper article THE JOURNAL RECORD

When an Employee Becomes Competition

Newspaper article THE JOURNAL RECORD

When an Employee Becomes Competition

Article excerpt

I recently heard a fairly common story with an uncommon ending. The owner of a large manufacturing company (we'll call him Ken) had an excellent plant manager (we'll call him Wayne). The two got along famously for several years and Ken rewarded Wayne handsomely for his fine work and loyalty. In fact, Ken was cultivating Wayne to become president of the company when Ken retired. So it really shocked Ken when Wayne submitted his resignation without notice.

Wayne wouldn't talk about his reasons for leaving and wouldn't even stay around long enough to train a successor. Ken was completely baffled until, shortly afterwards, the light came on. Wayne had started a competitive company and had copied Ken's best-selling product. Soon, Wayne was one of Ken's biggest competitors.

Now some people would have sued Wayne. Perhaps he had a contract that contained a restrictive covenant prohibiting competition. Perhaps he violated a contractual obligation not to use confidential information. Even if he didn't have a contract Wayne might have been sued for misappropriation of trade secrets.

What would you have done if Wayne had left your organization and gone into competition with you after you had done so much for him? It's a common problem I see fairly often in my law practice.

But this common problem had an uncommon result. Ken didn't sue Wayne. Instead he forgave him. And then he went the extra mile. Several years after Wayne's departure Ken heard there was a design defect in one of Wayne's products. The defect had caused several injuries to the public and lawsuits had been filed against Wayne's company. Rather than gloating over his ex-employee's misfortune, Ken bought one of the products and took it apart to test it. He found the problem and put his own engineers on the job to correct the defect. Then Ken called Wayne and told him how to fix the product.

I'd like to say Wayne was overwhelmed at Ken's gracious generosity, but I can't. …

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