"Loyalty is often touted as a moral principle, or virtue, worth exemplifying in social and business relations. But is it always beneficial to be loyal? We investigate possible negative consequences of being a loyal employee in the workplace. Instead of protecting or rewarding them, loyal employees are selectively and ironically targeted by managers for exploitative practices (Studies 1–2). The targeting of these loyal workers is mediated by the assumption that loyal individuals are readily willing to make personal sacrifices for the objects of their loyalty (Study 1). We then find evidence for the reverse causal pathway: workers who agree (versus refuse) to be exploited in the workplace acquire stronger reputations for loyalty (Studies 3 and 4). These bidirectional causal links between loyalty and exploitation have the potential to create a vicious circle of suffering.