Identify Evil CHARACTERS.
There is a difference between someone who is ignorant of social etiquette and someone who has an incurable impulse to hurt and wound others -- or someone who is having a bad day, and someone who is bad every day.
So, ask, is this person CHARACTERIZED by viscousness, deception, cruelty, etc. -- OR, are they just having one of those momentary lapses that we all have?
Know Characteristics of Evil Characters.
Destruction: Where evil people go, they bring destruction. They continually destroy relationships. They can't keep friends. They continually wound others with cruel speech or actions.
Deception: Evil people chronically lie, to the point that you never who what reality is with them. Don't believe a WORD that an evil person says. Pretty much, if they are talking, they are lying.
Manipulation: Evil people have a 'god' complex; they want to be, and think they are, the center of the universe. Thus, they will do whatever they have to to get what they want.
Avoid Evil People.
If and when possible, stay far away from evil people. Where they are, trouble and pain are soon to follow. They have the tendency (and power) to suck everyone (even the good guys) into their personal black hole.
Deal With Evil People.
If the situation will not allow you to avoid an evil person then you MUST deal with them. Simply hoping they will get better won't work. Hoping they will surprise you with 'goodness' is also a bad strategy.
Depending on the situation and person, you might consider: 1) Confronting them: It is best to have someone else with you, and it is best to do this in person, and in public. NEVER send an evil person an email, text, or letter (unless via a lawyer). If you have to confront them, make sure to do it in person. 2) Calling in someone higher up: if they are breaking company rules, then call the boss; if they are breaking the law, then call the police. 3) Making their actions known: that is, warn others about them (though not in the context of 'gossip'). 4) Dealing with them EARLY: if you see a person is in 'destruction' mode, then don't entrust them with important secrets, tasks, etc. Rather, deal with them head on, and right away. Don't wait on them to strike because THEY WILL.
Make Boundaries and Consequences.
Put evil people on notice AS EARLY AS POSSIBLE that there are certain boundaries of respect that they cannot and will not cross. Let them know you have non-negotiables in personal ethics, business, etc. Also, let them know that there will be consequences for their actions.
Example: You are assigned to work on a project with an evil person at work. You have to meet with them every day for the next week. This person is known for being dishonest and a gossip. What do you do? Your very FIRST meeting you should let them know that you don't engage in gossip, you don't waste company money, etc. Then, nonchalantly tell them you are going to keep minutes of the meetings and turn them into your boss every day so he/she can assess your progress.
Two excellent books I'd recommend on dealing with evil people: Boundaries (By Cloud and Townsend), Love Must Be Tough (Dobson).