Taking equipment as a hostage

Another week and another interesting query from a reader, who wants to know the ethical considerations of a quandary in which he finds himself. After relating a tale of a company with shoddy business practices and unsavory managers, he finishes up:

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"If you haven't guessed, I feel absolutely no loyalty towards this company. To this end, I'm giving notice in two weeks and will be moving to another city to start another almost identical company.

"They owe me about five weeks of vacation pay and expenses (totaling about $5,500 gross). I have equipment at my home that I use for R&D and Testing purposes. I have no intention of returning the equipment until I am paid in full. Otherwise I will just claim it as my own.

"Am I right to hang onto the equipment until I am paid in full? I could file a complaint, but I'd be fighting a cross-country battle and I don't expect to be in the old city enough to actually be able to fight them. I also know my religious beliefs would predispose me to returning the gear and being morally right (the whole 'theft' thing), but I can also use the equipment in the new office."

There are several ways to approach this. Some people might take the attitude that "two wrongs don't make a right." People love saying that even if they don't really practice it. But, in this case, it has appeal. Just because the company has done something wrong, it doesn't necessarily mean the employee is justified in keeping the equipment. Withholding wages is wrong. Keeping what doesn't belong to you is wrong, and proponents of this theory would say that those two don't cancel each other out.

The opposite point of view is that they do cancel each other out. The company owes the departing employee something, and he is justified in taking whatever he can -- in this case, the computer equipment -- to satisfy his claim. The main complaint against this view is that it is a sort of vigilante justice, in which the employee would be taking the law into his own hands.

Another way of looking at it is that the company does owe the employee something, and he would be foolish to return the equipment until the company comes through with his pay and expense check. After all, someone would argue, this is no different than when the local service station keeps your car until you pay your bill.

I do find myself attracted to the third theory. In fact, many companies have a policy that departing employees won't get their final check until they return any outstanding company equipment, keys, records, etc. This seems like a turnabout of that commonly accepted situation.

But if the employee sells the equipment for cash or does something to degrade its value, then he has deprived the company of something of value should they decide at some future time to come through with the outstanding paycheck.

It seems to me the best thing to do, from a practical point of view, would be to try to negotiate with the company. After all, if they're strapped for cash and cutting down on staff, they may be just willing to trade the equipment for the pay. Depending on the value of the equipment, this might be advantageous for both parties.

If they're not willing to do this, perhaps the best thing would be to put the equipment in escrow -- leave it with a neutral third party -- until the matter can be resolved, and notify the company that this is the case. This action would demonstrate good faith on the part of the employee, but he wouldn't return the equipment until he had received satisfaction.

This would also avoid the possible "infinite-loop standoff," in which the company says "we're not sending the check until we have the equipment," and the employee says "I'm not sending the equipment until I have the check."

The religious question that the reader poses has an interesting twist. When I was studying moral theology many years ago, I found out about a fascinating loophole in the "shalt not steal" restriction, which seems a perfect fit for this situation. Called "occult compensation," it specifically refers to cases like this, in which a person is owed something by another party. If there is no other way to retrieve what is owed, the person is allowed to take something of equal value from the debtor.

But like all such loopholes, there are conditions. In this case, someone can avail themselves of occult compensation only if legal remedies are either unavailable or are unjust. Therefore, to use that defense in this case would require at least attempting to pursue legal or administrative action to get the back salary.

Depending on the jurisdiction, some of the penalties for withholding owed wages are quite substantial and might be worth an attempt. However, just hanging on to the equipment without trying to reach some resolution seems ethically shaky and could be fraught with legal dangers as well.

Write to Carlton Vogt at ethics_matters@infoworld.com. To discuss any of these issues, you can go to the Ethics Matters forum at www.infoworld.com/forums/ethics .