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Loans in the Workplace

Loans in the Workplace

Alison Green | Ask A Manager

Wow. First let’s talk about this firing itself, because I have to think that you might have a wrongful discharge claim. I’m not a lawyer and I don’t have all the facts about what happened, but if, for instance, your employee handbook says that you’ll get a formal warning before being fired, and you weren’t warned, that would be legally relevant. There are also some jurisdictions where you have a claim for wrongful discharge if you were fired in a way that violated the implied covenant of good faith and fair dealing. Any employment lawyers in the audience want to weigh in on the legal side of this?

Now, I’m not necessarily recommending that you explore an actual lawsuit (although you might have that option), because lawsuits are expensive, exhausting, and can take years. But I am recommending that you contact your old company (go to HR and the owner, not your old boss) and try to negotiate a very, very good severance package, based on how improperly they handled this — including a sizable severance payment and an agreement about what the company will say about your tenure there and the reason for your departure. And you might want to have a lawyer help you with these negotiations, because the involvement of a lawyer sends an implicit “or else there’s going to be a legal problem” message.

As a side note, it’s interesting to speculate on what the hell this company was thinking. They’re retaining a manager who apparently has a reputation for asking employees (and the postal carrier!) for loans and who ignored warnings to stop, and they’ve fired one of the employees she pressured for money without presenting a concrete performance-related reason. I’d love to know to what extent your manager’s boss and/or HR were involved in the decision to fire you. My hunch is that (a) they aren’t especially aware of employment law that might come into play here, and (b) they think firing a manager is a huge deal and they don’t want to rock that boat, so they’re willing to let her run wild all over everyone else (always a bad approach).

Anyway, let’s answer your actual question, about what to tell prospective employers in interviews: Ideally, you’ll have worked out an arrangement with your previous employer that requires them to say that you were a great employee and were driven out by a problem manager. In the interview itself, you can then say, “I made the mistake of loaning my manager a large amount of money, and it soured the relationship. It ultimately made things so uncomfortable that I ended up leaving as a result.”

And to everyone else: Loans in the workplace — giving or receiving — are not a good idea. Say no.