How to handle a client telling you about future plans and asking you to (temporarily) keep them secret from your hierarchy?

Question

(This is in a B2B context, so "client" here means a company's representative.)

I have a very good working relationship with my client, even if we've been working together only for about a year. My company's relationship with his actually improved pretty quickly when he took charge after the previous manager left.

Something interesting happened recently. During a meeting, he started talking a bit about his company's future plans regarding their collaboration with us. Things are still hypothetical/in discussion and he asked me not to talk about this to my superiors yet. On the other hand, my managers have repeatedly told me how I'm the company's employee first and foremost and thus the company comes before the client. (which probably sounds obvious, but I'm really not "corporate-minded" so they felt the need to stress this)

No matter how I handle this, I think it can be framed negatively:

• If I keep the secret, I'm technically being a bad employee and not doing a certain part of my job. And things could get unpleasant if they somehow learn about it. (though there's literally zero risk of me losing my job because of it)
• If I do go to my hierarchy and tell them about this, then I'm breaking my client's trust. And I can't control how they will use this information - they could let it slip at some point during a meeting or an email, which would obviously do heavy damage to our (well, my) relationship with the client.

Now personally, I value trust and honesty very highly so I'm certainly going to keep my mouth shut until things become official (expected to be in a few months). I also feel like the potential negative of this choice is much smaller than for the other one, though the positive is just "Nothing happens" as opposed to "My company can start preparing plans a bit in advance". But I think it is an interesting question and I'm curious about this community's thoughts on the situation.

Note: the "secret" is basically about how they're looking to potentially either extend or reduce the scope of our contract with them. He wasn't telling me that his company is about to commit a fraud or anything illegal.

Answer 1

and he asked me not to talk about this to my superiors yet

That's where you say STOP and state very clearly that you are technically not allowed to do this and that this constitutes a conflict of interest for you.

You can tell the client that you appreciated their openness and trust and that you won't break it (this ONE time), but that going forward you can't receive information that's supposed to be confidential with your employer because you are contractually bound to disclose this information to your employer.

Answer 2

My company had a strong "stop right there and don't tell me anything I'm not supposed to be able to tell my boss" policy, to avoid being sued for anything from leaking the info to insider trading.

If there's something confidential that should be shared, management on both sides should have agreements in place to deal with that.

Generally, things that are company confidential should remain company confidential, and your management should tell you when that doesn't apply and to what degree.

Answer 3

The best way to answer this is with a Hypothetical:

Imagine your Client tells you that they are going to be massively increasing their production of their Doodad line and they are anticipating tripling their orders for your company's Foo components to meet the demand.

You, in good faith, tell your bosses. Who tell their bosses, who decide that they need to hire 20 more staff and buy some new manufacturing machines at several million dollars to cover the increase in demand and are already working out the company bonus scheme for a bumper year.

Then, it turns out, that the principle customer for their Doodad line suddenly has had to change plans and they are not going to be increasing their production, on the contrary, they are going to decrease their requirement for your companies Foo component.

Those 20 new hires get laid off, the company has to sell some old machines to cover the cost of the new ones - and everyone starts a witchhunt for the source of this information...

You.

And do I need to elaborate what happens next?

In short - you've been told a possibility - but the reality of what you've been told in relation to your actual employer is this:

"Unless I've got something in writing, signed, from the Client - then I've got nothing"

If they want to extend the scope of the agreement - then when it's time to do so, the client will start the formal proceedings.

If they want to cancel the agreement - then what you could do is discuss with your company that they should review the last calendar year of their relationship with the client - and see what worked, what didn't and what they could do better.

Now, you've not let slip any confidential knowledge and you can hand on your heart say that to your client - but you have a justification for undergoing an unofficial retention process just internally on your companies end - so that if you do get a formal announcement - you have got a game plan ready.

Answer 4

You had this information off record, treat it as it is: he could have said that at the coffee machine, it could be true or not, you have no proof, and no one has. It's closer to small talk than to "B2B leak". There's no evidence this will ever happen, or not.

Report a false information to your company? Based on what? Some kind of "I heard that...". 1. you may be transmitting false information to your boss (and it could backfire badly) or 2. you betray someone that was chit-chatting with you, like people do when they appreciate your cooperation.

I would keep that information for what it is: nothing more than a few words. I often share this kind of "information" with clients or suppliers, like: "oh yes, next year, we hope that we may be doing A/B/C", to what they reply: "same for us, but in that direction (or with that tool)". It's either not important, or it might be a little, and this person knows you won't disclose it, but they mention it and warn you anyway, just in case you didn't pick the "off record". Not a big deal though.

Business talks, not war secrets :)

Answer 5

Say nothing to your manager about any specific words you heard, or who told you what.

• "my managers have repeatedly told me how I'm the company's employee first and foremost and thus the company comes before the client." This does NOT mean that you have to disclose every piece of small talk between you and the client or forward rumors. Maybe NOT telling IS putting the company before the client if it prevents a reaction that turns out to be an incorrect response.
• "the 'secret' is basically about how they're looking to potentially either extend or reduce the scope of our contract with them". This isn't a secret. When a contract is due for renegotiation, pretty much every client, everywhere, always considers either extending or reducing the scope. (or holding steady...) Your friend was merely musing out loud. There is absolutely zero useful information in what your client disclosed, and certainly nothing actionable since it could go either way.

Instead, clear your conscience, put your company first, and show some initiative by approaching your boss with words to the effect of "our contract with client XYZ is coming up for renewal, I suggest we meet to discuss a plan for how we might respond if they ask us to either extend or reduce the scope of our agreement."

(This situation isn't the double negative outcome you portrayed it as in your question...)

Answer 6

It is in the best interest of your company to be perceived as honest and reliable. Telling your superiors, if the client finds out, can cost your company ongoing contracts.

That client most likely has a contract with your company. That contract may require you to respect the clients confidentiality. Telling your superiors might be in breach of contract. And remember that if things ever go to court, you are required to tell the truth, even if this is against the interests of your company.

And remember: You are told the company comes first. Which means if there is trouble, they will make it all your fault. Make sure that you come first. Don’t do anything you wouldn’t want the client and the client’s lawyers to know.

Answer 7

Definitely tell your bosses, but also tell them that you were told in confidence

Personal relationships and informal conversations are a very important part of your job. The fact that you've built this kind of relationship is brilliant.

This is clearly not something which your bosses should rely on though. It's a potential opportunity to add to your sales funnel, but your sales funnel always needs to also have a probability of success attached to each opportunity. This is no different to any other opportunity.

For any opportunity, there should also be a window where the client is left to think about it, before you follow up. So your bosses should know not to bring this up soon. Your contact can't expect you to keep this fully secret - the implication is more that your company shouldn't be making assumptions about whether they will or won't get that business, and not to pester them whilst they're making up their minds.

Answer 8

This depends if the news is positive or negative for your company.

If it's positive (like expanding the contract, increasing sales, etc), do not tell your manager. As in TheDemonLord's answer, your company could take that as news and go on to do a hiring round, producing equipment, and so on in preparation, without any real solid need for it. In the best case scenario, you tell your boss, your boss does nothing with the information, and then you've "only" betrayed your client's trust for no benefit to yourself or your company. It's not worth it.

If it's negative (like changing vendors away from your company, or some negative feedback that might break the contract, or the client going out of business), then you should tell the company. Especially in the case of negative feedback, you should do whatever you can to get ahead of the client breaking their contract due to some negative experiences with your company. If you tell your company about negative feedback from the client that is causing the client to consider action, then perhaps they can fix whatever is causing the issue in time to make the client reconsider their action. At the very least, you can say you did your best to stop the negative thing from happening, or impacting the company.

Answer 9

How to handle a client telling you about future plans and asking you to (temporarily) keep them secret from your hierarchy?

Just stay quiet and pretend you never heard them ( even if they follow through with their plans ).

Future plans can be changed, so whatever you tell your employer now may not come to pass and you would look bad for breaking the confidentiality of your client as well as passing along inaccurate information. Treat any "secrets" that the client tells you like a verbal job offer, it's worth as much as the paper it's written on ( i.e. it's worthless ).

If the client does follow through with their plans, you still keep quiet. Once again, you will look bad with your employer for attempting to brag about having known all along what was going to happen and not telling them anything.

I would reconsider your personal relationship with this client, who is putting you in an awkward spot by revealing these secrets and asking you to keep them confidential. Going forward, keep all interactions strictly professional and try to keep any communication solely in writing.

Answer 10

I don't think there is a fixed response to this situation.

Information received?

Firstly, what information has your client's representative actually given you? Very little by the sounds of it. It can be assumed that the collaboration between two companies is always under some indeterminate re-evaluation.

Has he even leaked a timeframe for a decision?

Is it even surprising to learn that the "time is high" and that your client is looking more closely than normal at the question? Or is it already implied by contractual rhythms?

If you were to converse with your own colleagues, what would you tell them about what you have learned? That your client "is making decisions, that could go either way or change nothing, and could be soon or much later"? Most people would say you knew nothing, if this is all you have.

Motive?

Secondly, what was your client's representative's motive for telling you what he did? Was it a slip? Was it a feint by an experienced person to develop trust and make it seem like he was sharing information, whilst actually sharing nothing? Might it be false and misleading information?

Was he just acknowledging the obvious, but implicitly asking you not to trigger pre-emptive enquiries from your colleagues, and let the client work through their own process first? This would suggest he did not so much convey a secret to you, but did simply make a request not to trigger naive enquiries that will be rebuffed.

Or do you again know nothing of usefulness?

Reaction?

Thirdly, how might your employer want to react usefully to any information you actually have?

Might they want to suspend certain decisions of their own (like recruiting or layoffs)? Or plan to bring other decisions forward? Might they want to make preparations?

Also, if the revelation of the information to your employer will destroy trust with your client's representative, then what is the value of that relationship to your organisation? Might somebody trample your relationship with the client for short-term reasons, whilst destroying your ability to operate in the long-term? Are your colleagues likely to be sensible in this respect, or does the burden fall on you to manage the problem by controlling what information you disclose?

Or do you not know anything?

Summary

Before jumping to conclusions that you have been given salient information, you need to determine whether you actually have been given something important and significantly useful to your employer. Your employer doesn't want to hear useless gossip or shaggy-dog stories.

They especially don't want to hear empty remarks delivered in an inappropriately excited (or dark and secretive) tone, such as "our client is going to be making decisions! I don't know what they are or when they will be made, but I know they will be!". By being giddy or reserved about so little, you might by your manner mislead your colleagues.

If you don't actually know anything (including how to properly interpret the information, and understand what reaction your own disclosure will cause in your organisation), then it seems unlikely that you are morally obligated to say something to your employer.

Final notes

It's worth saying that if you personally value openness and honesty to a high degree, and dislike intrigue and skulduggery, then a diplomatic role at the interface between two differently-owned organisations is not necessarily the most suitable placement.

It's also worth saying that if your client's representative was behaving in a way that caused a gross conflict of loyalties (which is not clear here), then it might be appropriate to either remind him what your loyalties and obligations are, or even to broach with him the fact that you're going to have to disclose to your own employer something that he has let slip.

Answer 11

You have been put in a spot by your client that he shouldn't have put you in. It's possible that it was an inadvertent slip; but it's also possible that the information was passed on to you entirely purposefully. It could be that your conversation partner on the other end did this on his own account, or even at the suggestion of his managers. Either way, the reason would be two-fold:

1. The decision on the other end is not final and may change, so that no official information can be passed.
2. At the same time, your contact or his superiors would like to pass this information anyway.

As for why they want to do that, we can only speculate: Maybe it's a probe to solicit a reaction (if your company is not in the position to fulfill an extended order, they'd likely like to know as early as possible, potentially before a formal decision); maybe your partner on the other side, acting on his own account, feels an obligation to give you a heads-up of some impending change he learned about. This post assumes that the other side is not malicious, that is, the heads-up was not intentionally misleading.

However, for some reason he or they chose to inform you, and you are now privy of information that puts you in a privileged but awkward spot. That position reminds me of the seer in the role play game of Werewolf. In this game, the seer secretly gains information about other players and must use this secret information to influence the game without giving away his role.

That is what you could do. Try to raise awareness among your superior(s) about the possibility that the relations with that customer might change in a certain way, without telling them that you heard that from your conversation partner. Along the lines of "you know, company xy seems really pleased with our products, do you think they might want to increase the volume in the future?" Preferably in an informal setting, like at the coffee machine, or if you work remote, as a remark in a meeting scheduled for something else.

If your manager asks why you think that, it would be nice to have a few possible indicators at hand. Perhaps you can find some, now that you know where to look: An increasing impatience (or reluctance) to pick up the orders, signs of an increasing (or declining) business activity on their end, like new hires, new contracts or other publicly available information.

This way you have perfect deniability ("I did not tell anybody about our conversation") while still acting on the information you got. At the same time you cannot be made responsible on your side for any action taken if the heads-up turned out to be wrong: You only used information that was available to you — like their behavior and other data — to discuss possible scenarios. All responsibility for any action taken by your management rests with them.

Answer 12

This is classic conflict of interest, as others have said. Depending on how well organised the company you work for is, there could even be a procedure for how to deal with this, speak to your line manager.

Depending on the terms of your employment contract / the B2B contract / laws in your country you very likely primarily represent your employer and not your client. In the event of a conflict of interest your employer comes first.

EDIT based on comments:

To clarify, this is a conflict of interest between the two companies. There is no conflict of interest for the OP as they will not have any personal material gain by knowing the information, notwithstanding using it to setup their own business and gain a commercial advantage, but this is not an avenue being explored afaik.

Conflicts of interest are likely handled in the contract depending on how organised/large the companies are. There could be a clause on how to handle this.

Businesses do not like surprises, OP could sort this out ASAP buy just being open with the situation. Businesses also do not like having clients that want to leave anyway - if they want to go the best thing to do is let them go - then everyone can move on.

Yes, the company could have idiots but that (sadly) it is not a reason to not inform them.

Answer 13

The client might increase or decrease your contract.

There is (always) a chance your company might be able to influence that decision (without breaching the confidentiality).

How can depriving your company of the opportunity of acting on this information possibly be the correct decision?

Not telling hurts your company. The relationship you have with your client is a business asset. You have it because of your work, not because of your hobby or whatever. Whatever comes from it is a company asset.

Your client should know that and has asked something of you that they should know you can't give. That's unfair, nothing else. They should know that you will have to tell.

And you should! Don't keep something that's not yours. This information has value and it's not yours. Just because you can't turn this value into money yourself doesn't change anything.

If your client had given you a million dollars and told you not to tell your boss, would you consider just throwing it away a good deal?