The Jewish Ethicist: Vindictive Vendor.
How can I punish an abusive competitor?
Q. I have a competitor who is intentionally sabotaging my business relationships. How can I get back at him? For instance, he misled one of his clients regarding his background; can I let the client know?
A. It's certainly regrettable that your competitor is sabotaging your business. While Jewish law acknowledges the right of firms to compete fairly for customer business, this is meant to be done positively by improving prices and service, not negatively by actively interfering with competitors. (1)
However, I don't recommend "getting back at him." There are two reasons: one ethical, and one practical.
The ethical reason is that vindictiveness is one of the most dangerous qualities. The Torah warns us, "Don't take vengeance and don't bear a grudge" (Leviticus 19:18). The great Medieval commentary on the commandments, Sefer Hachinukh, writes: "This commandment brings great benefit to quiet feuds and to remove enmity from people." If you have a legitimate claim, you should refer it to adjudication, and if you don't, then it would be unfair for you to punish your competitor.
The practical reason is that based on my experience, sniping among competitors is highly damaging to business. This is the ultimate kind of negative competition, or "race to the bottom." In a prolonged price war both competitors may be weakened, but at least the consumer benefits. But in a smirch war, the reputations of both firms become tarnished and the discouraged consumer loses out, too.
For the same reason, disclosing your competitor's conflict of interest is a real problem. In general, we must be very careful of making damaging statements about others; this is learned from the Torah's admonishment, "Don't go about as a talebearer among your people" (Leviticus 19:16).
However, there is an exception: when the revelation is needed to save someone else from harm it is permissible. The very same verse concludes: "Don't stand idly by the blood of your fellow" - don't evade responsibility, rather take steps to protect him, as you would want him to do for you. The Sefer Hachinukh explains that the mandate is "not to go and tell someone, 'Such a person said such and such about you,' unless his intention is to prevent damage or quiet a dispute."
So we see that this permission has its own caveat: there must be pure intentions. If your intention is solely to protect the client from harm, then your act is not one of slander but rather one of kindness; the negative message is an unfortunate but quite necessary by-product. But if your entire intention is to punish your competitor, we can hardly excuse it by calling it an "act of kindness" towards the client.
What do we do in this case? The Chafetz Chaim, the classic Jewish work on avoiding slander, tells us that when we have the obligation to reveal but we have vindictive motives, we should try to focus and refine our motives and then make the revelation to the potential victim. (2)
But this advice is not really germane to your situation. For one thing, some vague "misleading of background" doesn't sound to me like a clear and present danger to the client. But even more fundamentally, it's not really realistic to think that business competitors can bad-mouth each other without vindictive motivations. In fact, the Chafetz Chaim himself writes that we should never even ask one tradesman about another competing one, since the competitive urge is so great that this is virtually an incitement to slander. (3)
When a competitor is fighting dirty, you have a number of options. You are of course allowed to contact customers and emphasize the value of your services, and defend them against any unjust charges. Certainly you may avail yourself of any legitimate avenues for legal redress. Often it is helpful to contact the competitor and confront him with the immense potential for mutual damage of a sniping war among business rivals.
However, descending to his level and trying to snipe back is not an ethical response and in addition is almost certain to alienate the consumer.
SOURCES: (1) Babylonian Talmud Bava Metzia 60a. (2) Chafetz Chaim II 9:3, note 3. (3) Chafetz Chaim I 4:11 in footnote, see also I 10:11.
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