manager borrowed money, refused to repay it, then fired me

by Alison Green on October 7, 2010

This is long but really outrageous. A reader writes:

I was fired from my job 3 months ago. The reason I was given was “due to personality conflicts with your supervisor,” which was shocking, considering that we were actually were pretty close in the office. I had been there longer then her and anyone else, and I never had any conflicts with anyone throughout the duration of my employment. To the contrary, I had wonderful relationships with every single person.

A couple of weeks before my termination, I did go to HR for some assistance because my supervisor began asking to borrow money from me in late 2009, and she continued to constantly ask through out 2010. She was pressuring me so much that it got to the point that I was so uncomfortable at work that I felt obligated to loan her the money.

The last time she borrowed money ($750), she agreed to pay it back by our next pay period because I told her that could only afford to loan it to her if I got it back by that specific date; she agreed. Well, that date came and she didn’t pay me back. A week went by and she didn’t mention anything. When I sent her a message asking her about the loan, she simply ignored it. At this point, not only was I in financial trouble because my bills were unpaid, but she began to be really hostile towards me. When I asked again that she at least pay me back half of the money, she said that she needed to check her account and she could probably give me $100. Well, after that reply there was NOTHING. No payback, no message or email, nothing.

So, since she was refusing to pay me back, I went to our HR person (hesitantly, because they were actually friends outside of work, but I had no choice). I told HR what was going on, and by the immediate reaction I knew there was something else going on, but she did not disclose anything, obviously. She did, however, want to help me and said that she was going to have to talk to the owner of the company about this, which I said would be fine. Two weeks go by and nothing, I then go to HR and ask what was going on, and she said that the owner told her not to get involved and at this point it is getting even more weird in the office. So, HR redirects me to the owner of our company.

A day or so later the owner calls me into his office and says that my supervisor was told to repay me immediately. Then he asks me about my work environment, so I tell him how she has been making me feel, etc. He then continues to say that he wants to resolved as I have been the longest employee there and she was wrong, etc. Then he shared that she had already been warned not to ask anyone in her “work -related” environment for money or loans. One week later, I finally get my money paid back and that Friday I also get fired.

After I was fired, I was contacted by the mail carrier who delivered our daily mail, who I’d known since I began working there. He said he was shocked to find out that I was no longer there, and when I told him the reason for my termination, he revealed that my supervisor had asked him to borrow $4,000 and that he reported it to our company.

I never had even one incident with anyone in my company, there are no disciplinary actions in my personnel file at all whatsoever, and throughout this time I remained cordial and respectful to my supervisor as I simply needed my money because I was suffering financially. So how do I explain this to a prospective employer? I guess I am still in shock and I can’t even come up with the words to articulate it.

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.

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{ 18 comments }

{ 18 comments… read them below }

  1. ImpassionedPlatypi*

    An assistant manager at the last company I worked for was actually let go for similar reasons. I say let go because I wasn't privy to all the details, so I'm not sure if he was fired or if his superiors and he came to the agreement that he should resign or what. But I do remember rumors that he had asked employees to borrow money and that his leaving had something to do with that.

    If it were me, I definitely wouldn't have lent the money in the first place. But if for some reason I had, and this happened, I would most definitely be seeking out an attorney to consult.

  2. Anonymous*

    We had a pretty weird guy work for us one time. He had other problems, but we started gathering the paperwork when he started badgering me (his supervisor) for $20 here and there (I never loaned it to him).

    Totally ok if you're friends and maybe someone's picking up the check for lunch because you left your wallet at home. But any other circumstances are just asking for trouble.

  3. Jamie*

    Outrageous is right.

    If they hadn't fired you I would think that you loaning money to someone you say is a friend outside of work is not an HR/work issue – even though she's your manager. Your company wasn't asking to borrow money via your manager – this was personal and hence not an HR problem.

    But when they fired you the company took ownership of this problem – why on earth would they do that?

    I would also definitely consult a labor atty – as Allison said it can be a tool to get them to give you a decent severance.

    Personally I never lend money I expect to see back.

    Asking the mail carrier for 4K? That is a whole different level of crazy. I guess she doesn't know the post office isn't interchangeable with the banks.

  4. Emily*

    OP, I'm so sorry you're in this position. Thank you for the cautionary tale about loaning money and about relationships with colleagues in general.

    I do agree with Jamie that the company (whether it was HR or the owner) took on their own role in this conflict when they facilitated the repayment and then dismissed you because of it. But even still, wouldn't the requests themselves from the supervisor be considered an issue of pressuring a subordinate? Maybe the OP should have gone to HR sooner, instead of loaning the money, the way the mail carrier did. It sounds like the boundaries there are terribly blurry.

  5. Anonymous*

    While it seems that the OP should not have been fired over the situation, I still don't hold sympathy over it. The OP should have known better than to loan money out, especially an amount like $750, to anyone. If the OP needed it back by a certain date, then s/he should not have loaned it out at all.

    Was this loaning of money done outside of work or during work hours? I would think that would determine how much the company can put their hands into it. Using company time to negotiate personal loans is unproductive, don't you think?

    While the OP does have his/her money back, it's still a costly lesson. Now they have to worry about fighting for a severance pay and finding a new job. I'm sorry for sounding rather harsh, butI have heard about too many situations where people lend/give money and end up in a hardship of some kind.

  6. Ask a Manager*

    I edited the letter down a little because it was so long, but the OP did mention in his email that the money was borrowed during work hours — but I'd argue that it wouldn't change anything even if it hadn't been. Even outside the office, these two are manager and subordinate, and the manager in a position of power — whether they're on work grounds or not.

    I absolutely agree that the OP shouldn't have loaned the money in the first place, but I don't think he forfeits any right to our sympathy by giving in. Not everyone is great at standing up to pressure from a boss, and it was entirely inappropriate (for that reason) for the boss to have ever asked, let alone to have applied pressure. A manager asking a subordinate for money (and especially continuing after an initial no) really isn't all that different from a manager asking a subordinate for sex — in both cases, any "yes" is going to be tainted by the possibility that the employee felt inappropriately pressured into agreeing.

  7. clobbered*

    I am curious. How was the writer fired? By their manager? By HR? By the owner? How was this handled? Was a reason given? What paperwork, if any, exists?

  8. Mary Sue*

    Who would ask their letter carrier for a four thousand dollar loan?

    Wow. Just… wow. I concur with the "Get a lawyer!" advice.

    1. Ms. Fired*

      When I submitted this questions/issue. I only gave teh short version, but there was so much more in terms of details and audacities. Now, in hidsight, it really is inbelievable…

  10. Anonymous*

    This is unreal! I third/fourth/fifth the idea of using an attorney to negotiate a severance package, as well as making sure they will give you a good reference. Even if you don't sue them personally, they are clearly not dealing with things appropriately and will end up in hot water again. I'm curious if the OP lent the money outright or had the manager sign a promissory note (not that it matters in the employment context). I am so wary of lending people more than $20.

    I bet any sort of contact with HR and the owner will make them uneasy, though it's possible that they really have no clue about employment laws.

  11. Anonymous*

    If I were to make a wild leap I would say that this manager has some major problems… I mean like substance abuse (on her part or a partner/family member) or a gambling problem or something like that. Normal people not going through some sort of major trauma don't need to borrow thousands of dollars from strangers.

    Or she could just be really bad with money and not have any concept of boundaries.

  12. Rose*

    I was fired once after a senior employee stood over me cursing and then threw something at me. I heard he later rammed a table into another employee.

    My manager at the time really got me with "do you really want to be working here"? Did you really want to be working there? You sound like a great employee and that company obviously has serious problems. I would definitely negotiate severance, etc from them.

  13. Joey*

    I disagree with the advice to negotiate a severance if you're in an at will state. To negotiate you need something of value and your only bargaining chip is a private loan gone bad between two employees. I'd be shocked if anyone would hold the employer liable for a private loan agreement. It's in no way related to the job so the employer will argue it has nothing to do with work. C'mon, would you let your boss borrow your car for the weekend? Same thing. Chalk it up to a lesson learned, try to collect the money on your own, and move on.

  15. Anonymous*

    I agree with "anonymous" who posted on October 7, 2010 at 7:05 PM – this manager must have huge problems (gambling debts, etc.) For a manager to ask for money from a subordinate is improper, as it can look like extortion, or at the very least, a forced bribe or kickback. This means it was the manager who deserved to be fired, not the OP (although I agree the OP should never have given the money in the first place).

  16. Anonymous*

    What I still don't understand is how the employee got blamed for this….it's like firing the victim, rather than the perpetrator, of harrassment. Or does this fall under the "at-will employment" boondoggle that lets employers fire you no matter what?

  17. Unsan*

    Lesson learned here? NEVER EVER trust a manager and especially an HR person with anything resembling the truth. They simply can’t handle it.

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