Joy Chatterjee on Fri, 3 Aug 2001 09:31:27 +0200 (CEST)


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


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