I moved from one office to another. Tell me why the new branch manager had to mention, yeah I heard he was a real jerk and firm glad he retired. I was stunned & replied with, he was a good manager and I’m sad to see him go. I wish him the best. Awkward silence. What should I have responded? I’m not going to gossip.

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As a general rule it's always smart to avoid going along with it when people are denigrating a colleague. That's poor form, and word gets around. You don't want to be known as someone who would talk that way. There's nothing wrong with what you said.

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You showed real character and backbone here, but you are now doubting it because of external reaction and the dunnig-kruger effect, you showed competence here when others didn't. However, this could be a creep testing for loyalty so I would see this as a red flag for this person, and I'd watch them a little more closely in future, not in a paranoid way, just a mental note. Good luck, I love working with people like you!!

I think you responded well, and the same way that I would have. I don't like to engage in gossip, especially at a new place of work. They'll get over the awkward silence.

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Thank you. I know it’s the right thing to do. He’ll get over it.

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