The employee who still haunts my nightmares — 18 years after I fired her — was a former friend who expected special treatment.

Recently, a reporter asked me to describe the employee who haunts my nightmares.

I’ve been supervising employees for more than 33 years now, and I’ve a managed thousands of employees in my career. But it didn’t take me long to come up with the single employee who haunts my nightmares 18 years after I had to fire her.

I considered this talented professional woman a friend before she came to work for me. And that’s where the trouble started.

I’m not about to argue that you can never hire friends or family members. I’ve worked with my daughter-in-law (before she married my son, while she was separated from my son, and after their divorce — and if you don’t think that’s a management and personal challenge you’re sadly mistaken), a step-daughter (after I divorced her father), one of my sons, and a former client who came to work for me after I’d worked for her for several years. I’ve even been promoted into situations where I wound up supervising former bosses — one of whom had fired me. Eventually, I married one of my business partners.

But none of those potentially dicey relationships were a fraction as problematic as the “friend” I made the mistake of hiring. I’m going to call the woman Sandy (not her name). I met Sandy when we served together on a not-for-profit board of directors. We had a lot in common — dog-loving female execs in a male-dominated industry who enjoyed antique auctions and the same brand of music. She was childless and single, and I was married with kids, but we became friends.

Over the four years between the time we met and the time she came to work in my company, I enjoyed going to movies and auctions with her, and she became a regular guest at my home. So when she called one day to say that she lost her job in an unexpected company take-over, I was happy to refer her for an opening in my company.

One of my partners had been trying to recruit someone with a specific set of skills to work for one of our largest clients, and I thought Sandy seemed like a perfect match. But it wasn’t “my” account, so I had her send her resume to the partner doing the hiring. He’d never met her, but there was a good match between his needs and her skills, and they hit it off.  She got a job offer after my partner had interviewed several other candidates.

Sandy and I met for lunch the week before she started to work, and I explained that she would be reporting to my business partner, not to me, and that she would be expected to perform up to his high standards. She said she understood, and was looking forward to starting to work with him.

Within the first few days, my partner called Sandy in for her first “employee behavior counseling session.” That’s what we called it when someone screwed up badly enough that one of the partners had to intervene. Her first mistake was a big one. She didn’t exactly leak confidential client information, but she took home files that shouldn’t have left the office, and a guy she was dating (a reporter for a trade magazine) started sniffing around looking for more information on a subject he shouldn’t have known anything about. The only reason she wasn’t fired was that we couldn’t prove that she knew he had seen the material she took home, and he didn’t actually print the confidential information.

Two of the company’s four partners explained what she did wrong, went over the rules, and told her in plain English that she’d be fired if she continued to violate policies and put our business (and our clients) in jeopardy. She signed a form detailing the information covered in the meeting, and promised to be more careful in the future. My partners reported that she kept smiling throughout the meeting, seemingly unfazed by the criticism and corrections they leveled at her.

“I don’t think she took us very seriously,” one of the partners commented.

About a month later, she made an even more serious mistake, sending a press release for a public company out on PRNewswire during trading hours without notifying the stock exchange first. Worse, the release she posted had not been approved by the client’s legal team. (To clarify: she broke several laws, and put millions of dollars of our client’s money at risk since the exchange could have halted trading or hit them with huge fines. Not to mention the fact that she put herself at risk of criminal charges and put her job at risk because if we lost this very large client there wouldn’t be the revenue to keep her employed.) This is the kind of mistake that no experienced marketing person should ever make, and it would have gotten her fired on the spot in most of the agencies I have worked for. We kept her largely because we were a small, tight-knit group and we thought she was trainable — and because we all liked her.

We kept the client (barely), and all four of the partners sat her down again to counsel her about the rules, our procedures, and the serious nature of this second “mistake”. I sat in on this meeting, and although no one yelled at her, we made it clear that she was on the verge of being fired and that her mistakes were so serious that it had been a close call as to whether we’d give her another chance or fire her right then. I don’t see how she could have walked away from the meeting without a very clear understanding that she would be fired if there was another mistake of that kind.

Sandy wasn’t smiling when she left that second disciplinary meeting, and she seemed to finally understand that we were angry. She was subdued and quieter than usual for the rest of the week. I thought we’d gotten through to her.

Again, we had her sign a statement that affirmed that she’d been counseled, and said that we had a strict “three strikes and you’re out” policy. This time, I had my lawyer review the memo she was asked to sign. There was no ambiguity in it. It said that if she had to be called in a third time for a serious mistake that affected a client, she would be terminated immediately.

Three weeks later, she did it again with a different client, sending a press release out at 3 p.m. Eastern (while the stock market was open) instead of 3 p.m. Pacific (after hours). I terminated her for cause when she offered the lame excuse, “I forgot the time difference between Texas and California” What does that have to do with the rules of the Securities and Exchange Commission or the New York Stock Exchange?

After My Friend was Fired

It was hard to fire a friend, especially when she burst into tears when we told her to clean out her desk. I had no choice. I wasn’t sorry to see her go, because it was clear that she was putting my whole business at risk with her careless mistakes, but I did feel bad, knowing that someone I liked was unemployed.

Sandy promptly filed for unemployment, claiming that we had fired her “without warning or cause”. I was out of town when the paperwork from the state came in, and the office manager who handled HR matters sent in the warning notices she’d signed showing that she had been given two verbal and written warnings in the previous 90 days. Unbeknownst to me, the state denied her unemployment claim.

Immediately, she sued the company, claiming we violated her rights under the Americans with Disabilities Act by giving her afternoon deadlines which were a problem for her because her diabetes caused a blood sugar dip in the afternoon. As evidence that we were “unfair” to an employee with diabetes, she cited the fact that we kept the office refrigerator stocked with fruit juice, and our bookkeeper often brought in home-made baked goods that she couldn’t eat without causing a blood-sugar spike.

In the five years we’d been friends, Sandy had never told me that she was diabetic. She had never asked us as her employer to provide any special accommodations for her disability. The break room fridge also contained diet and regular soda and bottled water. Our grandmotherly bookkeeper would gladly have brought in sugar-free treats if she’d been told Sandy couldn’t eat what she baked. And, of course, no one made her eat the muffins, brownies, and cakes she claimed caused her problem.

During her deposition, she claimed that she signed the warning document without reading it because “she was friends with the boss, and she didn’t think she could be fired because of that friendship.” The warning note, she said, was “just procedure and everyone knew it didn’t mean anything.”

Further, she said that because I continued to be friendly outside of work, invited her to my home for a Christmas party attended by friends and families but not all employees, and occasionally went to lunch with her although I seldom went to lunch with employees other than my business partners, she felt that we had a “special relationship” that put her in a different class than other employees. (About half our staff was made up of recent college graduates, and I seldom went to lunch with them because we had nothing in common. I tended to go to lunch with my business partners — or by myself. Sandy and I had lunch only a handful of times in the short time she worked in the company.)

Her claim was eventually dismissed, but it was costly and time-consuming – and it disrupted our whole staff for months while we dealt with her phone calls, emails, texts and attempts to “tell her side” to everyone on staff.  We had to get a lawyer to remind her of her employment agreement after she attempted to tell one of our clients her “sad” tale.

Lessons Learned from a Nightmare Employee

What I learned is simple: if you are going to hire friends, make sure that you discuss in detail, in advance, the limits of your friendship. I did that with the family members I hired, and it worked like a charm. We all understood the difference between “family stuff” and “work stuff”, and had few problems. Had I done that with my “friend” I might have saved myself lots of grief.

Let your friend know plainly that they’ll be treated the same as every other employee. It starts when you begin the hiring process — get them to submit an application and go through any background checks required for other employees. (Yes, even drug tests if you perform them on other applicants.)

Once they’re hired, stick to your own rules. If other employees would be docked if they show up late, don’t make exceptions for friends or family. If you don’t routinely go to lunch with employees, don’t make an exception for your friend or family members. Whatever the rules are, apply them equally and fairly to everyone in the company and make it clear that a relationship out of the office with you makes no difference in how people are treated at work.

Make sure that every manager in the company knows that your friend is to be treated the same as every other employee — no better, no worse. I had my partner interview Sandy, and left the decision on whether or not to hire her completely in his control. But I wondered later if he unconsciously let her off the hook after that first disastrous press release mistake because he knew we were friends. I hope not, but I can’t rule it out. So if you hire a friend who will be supervised by someone else, make sure they know that you won’t intervene — and keep your promise.

I think that the biggest hurdle in managing friends or family is inside your own head. So if you are an entrepreneur considering whether to hire friends (or family), ask yourself these questions first.

1. Can you discuss money with this person without considering factors you wouldn’t consider if you were dealing with a stranger? For instance, if you know your friend is in financial trouble, can you avoid overpaying them? Will you be pressured by relatives to “help out” a family member with special treatment, higher pay, or unearned bonuses?
2. Can you fire this person if you have to? Some people simply can’t fire a friend or family member — they will let the business go under, go without pay themselves, or take unnecessary risks to keep a worker who isn’t valuable to the company employed.
3. Will the friend or family member assume they’re entitled to  special privileges and take advantage of you? This is hard — I thought my “friend” was an experienced professional who would treat her job with my company the way she’d treated all her other jobs — but she thought she’d lucked into a cushy sinecure that would allow her to take liberties I couldn’t afford to allow.
4. Will having friends or family members at work undermine your leadership? Sometimes, it’s unintentional, as someone close to you tells what they think of as funny stories around the water cooler. And sometimes it’s simply the fact that they don’t take you seriously, and they have no idea that their attitude is rubbing off on others. Either way, it’s a problem no entrepreneur or manager (especially a young one) can afford.
5. Is the person qualified for the job? Before you hire anyone, make sure you know the skills you need for the position. Then make sure that the person you hire has those skills, as well as the work ethic and experience needed for the job. If the person you are thinking of hiring is a family member or friend, take time to think about what you’d pay a qualified stranger vs. any expectations and possible pressure to pay friends and family more — or even share revenue or ownership in your business.

Last, but hardly least, think about the possible long-term effects of your relationship with other friends or family members if you wind up having to fire someone for cause — or if your business has problems and you have to lay them off.

Don’t forget to think about what happens if your business is wildly successful. If you stand to make millions if you sell the business, and your brother or cousin or best friend stands to lose the job they rely on to support their family, how are they going to feel about you then?

Be brutally honest with yourself, and don’t even think of hiring friends or family unless you are certain that none of these issues will come up. I honestly thought that my having someone else interview and supervise her, I had made it clear to my friend that she was a regular employee subject to all the normal rules and procedures. But she thought differently. The result is a lost friend who has been on an 18-year mission to blacken my reputation whenever someone will listen to her tale of mistreatment.

In retrospect, I’d have been better off not telling her I had a job opening. She’d have found something else, and we’d both have been happier.

Note: I got the photo of the screaming employee off of Pixabay, a source of copy-right free images. It is not a photo of my former employee, and as far as I know, she doesn’t scream out loud when she gets frustrated. I certainly felt like screaming when she sued me, however!