[Reader-list] Employers Maintaining Vigilance in the Face of Layoff Rage

[Joy Chatterjee]

Employers Maintaining Vigilance in the Face of Layoff Rage
By EVE TAHMINCIOGLU
The New York Times on-line August 1, 2001

Juval Aviv, a private investigator in New York, had lunch in April with a 
man he suspected of sabotaging one of his client's computer systems, 
causing up to $20 million in damage and indefinitely delaying a 
long-planned public stock offering.

Mr. Aviv, whose client was a New Jersey chemical company, told the man, the 
company's former manager of information- management systems, that all the 
evidence pointed to him and that he was there to help him make things 
right. After a few hours and many cups of coffee, the 56-year-old former 
employee, whose name Mr. Aviv would not disclose to protect the identity of 
the company, confessed his guilt.

The man was one of 50 people laid off from the company in February, and he 
had known another executive's computer password and had used it after he 
lost his job to tap into the company's computer system from home and delete 
critical inventory and personnel files, Mr. Aviv said.

What caused this company veteran, who had been making $186,000 a year and 
who had a wife and three children, to crack? An anonymous note that he 
wrote to the president of the concern before he was caught sheds some light 
on his motive. "I have been loyal to the company in good and bad times for 
over 30 years," he wrote. "I was expecting a member of top management to 
come down from his ivory tower to face us with the layoff announcement, 
rather than sending the kitchen supervisor with guards to escort us off the 
premises like criminals. You will pay for your senseless behavior."

As the economy continues to stagnate and layoffs proliferate, workplace 
experts say, it is becoming more important than ever for employers to 
display vigilance against possible retaliation by the people they are 
letting go.

For one thing, workers seem to be angrier these days when the ax falls, 
said Beverly Smallwood, a Mississippi psychologist who does workplace 
consulting for businesses. Many workers have put in endless hours and sweat 
for the promise of hefty stock options that never materialized.

"I don't recall at any time in my history, and I've been in this for 30 
years, where the degree of destruction was quite as high," said Linn A. 
Hynds, a Detroit employment lawyer. Since December, he has advised 
companies in 10 factory and office closings and layoffs involving 1,500 
workers in southeastern Michigan.

At the same time, the people doing the dismissals at many companies — 
especially dot-coms — are younger and more inexperienced than their 
predecessors in the last big layoff binge of the early 1990's. In their 
overzealousness, some of them make the mistake of bringing in security 
guards in inappropriate settings, increasing the victims' resentment and 
making retribution more likely.

The New Jersey chemical company committed two classic faux pas in handing 
out its pink slips, in the view of Mr. Aviv, who is president and chief 
executive of Interfor Inc., a private investigation firm. First, it was 
unduly harsh toward a high - level executive who was accustomed to being 
coddled and who was familiar with the ins and outs of its computer network. 
And second, it failed to maintain a backup filing system to protect its 
crucial documents against sabotage.

The worker was arrested and is out on bail, but may avoid jail time, he 
said, because the company does not want to look stupid and is considering 
settling the case to hush up the matter.

Two of the most common acts of revenge are theft of company property and 
breaches in the company's computer network, according to an annual survey 
of Fortune 1000 companies by Pinkerton Inc., the Chicago security firm. Ray 
O'Hara, Pinkerton's vice president for the Western region, estimates that 
employee retaliation occurs in only 1 percent of dismissals, but could be 
as high as 5 percent at companies that do not handle layoffs well or that 
have a hostile corporate culture.

The electronic workplace, while making businesses more productive, has also 
created a situation that enables employees to bring a company to its knees 
with just a few keystrokes.

That reality was brought home five years ago when Timothy A. Lloyd, a 
computer programmer, was accused of hiding a software "time bomb" to delete 
critical files in his company's computer system after being fired. The 
case, which is still making its way through the courts, involved Omega 
Engineering Inc., a temperature components maker in Bridgeport, N.J., which 
asserts that the damage could eventually cost it $10 million in sales and 
contracts. Mr. Lloyd has denied any wrongdoing.

Moreover, with the growth in telecommuting and the spread of 
Internet-capable hand-held devices, it has become easier for dismissed 
workers to wreak havoc outside the company premises. Companies are also 
beginning to install wireless networks in offices and factories that go 
through walls and have a range of 300 feet. That means employees can 
potentially tap into company databases via a laptop computer from right 
outside their former workplaces.

As a result, security experts suggest cutting off employees' connections to 
the corporate networks before letting the employees go.

"Every new wave of technology introduces new security exposures," said 
Richard Hunter, managing vice president at Gartner Inc. (news/quote), a 
research firm. "Clamp down and take away pass codes," he advised. "If 
people who have a reason to be upset have access to your system, then they 
have the means. The remaining question is: Do they have the motivation?"

A disgruntled employee at an East Coast service company certainly did, 
according to Jay Ehrenreich, a senior manager for the cybercrime unit of 
PricewaterhouseCoopers in New York. The employee figured out how to alter 
product prices on the company's Web site and fouled up a month of bills, 
Mr. Ehrenreich said.

The sabotage, which occurred during a company reorganization and caused 
hundreds of thousands of dollars in damage, was never linked to a specific 
employee because the process for assigning identification numbers for 
access to the network was so "messed up" the worker was able to obtain a 
bunch of ID's and hide his or her identity, he said. The company called in 
Mr. Ehrenreich to fix the problem.

Even if they are cut off from the company's computers, disgruntled workers 
have found that the Internet makes it easy to take their frustration out by 
spreading false information in chat rooms or sending out fake news 
releases. And they can always engage in the low-tech practice of just 
bad-mouthing their former employer — and there is not much a company can do 
about that.

Amazon.com (news/quote) tried to convince 1,300 of the workers it laid off 
this year to sign an agreement that included a clause to not disparage the 
company in return for more lucrative severance deals, but backed off from 
enforcing the clause under pressure from union organizers and also fear of 
a public reaction.

Old-fashioned theft also remains a staple of worker retaliation. The 
average company loses approximately 6 percent of its gross revenue to 
employee fraud and abuse, according to the Association of Certified Fraud 
Examiners in Austin, Tex.

"We classify it as ex-rage," said Daniel D. Thaxton, manager for document 
security at Standard Register, a maker of business forms in Dayton, Ohio. 
One common blunder is to leave open boxes of company checks in unsecured 
rooms, he said.

But with computers infiltrating every corner of businesses today, from the 
head offices to the manufacturing floor, even blue-collar workers are 
potential cybersaboteurs, Mr. Thaxton says. For example, he says, an angry 
assembly line worker can now sabotage a computer system, bringing down an 
entire line.

"While some people on the floor are much more likely to take a hammer to a 
piece of machinery, we have had people reprogram systems and mess the 
manufacturing processes up," he said. "Most of the cases we have seen 
involved robotic equipment, such as a robotic arm."

Often it takes two to three days to figure out what is wrong with such a 
system, Mr. Thaxton said, and in the age of just-in-time manufacturing, 
that can mean the loss of contracts.

In another example of employee mischief, Mr. Hynds, the Detroit lawyer, 
says he knows of several cases in which fired workers have stuffed their 
office computer in the cardboard box they are given for personal belongings 
and have tried to walk out with it.

Sometimes, they were merely trying to protect their private files, not 
steal company secrets, he says, as in the case of a married company vice 
president who tried to spirit out his computer because it contained love 
letters to and from his girlfriend. But the fact remains that former 
employees can end up with valuable company information at their disposal. 
To avoid that, he suggests letting dismissed workers download or erase 
personal files under strict company supervision.

It is not just the laid-off workers who pose a threat. Employees who 
survive a layoff can also vandalize company property to avenge their 
departed co-workers.

Arthur May, operations manager at the Kimberly-Clark (news/quote) mill in 
Hendersonville, N.C., recalled a time at another paper plant that a wrench 
jammed a machine and shut it down. "When people feel they've been dealt 
with unfairly, `ghost' things just start to happen," he said. To be sure, 
most employees are honest and tales of sour-grapes subversion can be 
overblown. Jonathan L. Alpert, a labor lawyer in Tampa, Fla., who 
represents workers, said dismissed employees could be easy scapegoats to 
blame for run-of-the- mill computer problems or even management missteps.

Most dismissed workers "are shell-shocked," Mr. Alpert said. "Their main 
concern," he added, "is figuring out how to get their lives together, not 
masterminding some sort of retaliation."
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Link to the article: 
http://www.nytimes.com/2001/08/01/business/01SABO.html?ex=™7690377&ei 
==1&en=U07feacbbfa29b8
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