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Seriously, there were fights over that?

In any remotely reasonable organization, that should be an instant, permanent blacklisting for the vendor, and termination of the "we will escort you to clean out your desk right now" variety for any internal employee who knew about it or enabled it. Probably with a line dropped to law enforcement.

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That strikes me an example of how extremely unreasonable organization would behave, regardless of what it was in response to.

What reasonable company have you worked for before that had such an approach. The only place I could imagine it happening is at a boutique trading firm

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