The same happened to me when I upgraded to 3.1 today. Got the error "Fences has detected that Explorer was not closed properly". Found a solution that worked for me (from a 2013 article from Stardock): (SOLVED) Fences has detected that Explorer was not closed properly. » Forum Post by darvin atkeson (stardock.com)
One of the causes of the issue seems to be one or more problematic icons on the desktop. To resolve, move all the desktop icons to a temp folder on the desktop. (Some icons won't move...such as Recycle Bin but that's ok.) After moving the icons, Enable Fences. The fences should reappear, albeit empty. Then move icons back to the desktop, one-by-one from the temp folder. The problematic icon(s) will cause the error to re-appear. In my case, turns out it was a 23andMe shortcut url icon that caused Fences to break. (After replacing the URL shortcut in the icon, I was able to move it back to the desktop without breaking Fences.)
In my case, the URL shortcut that broke Fences was "https://api.23andme.com/cas/login/?redirect=%2Fauthorize%2F%3Finternal_login%3D1%26state%3D%257B%2522origin_uri%2522%253A%2B%2522%252F%2522%257D%26redirect_uri%3Dhttps%253A%252F%252Fyou.23andme.com%252Foauth_callback%252F%26response_type%3Dcode%26client_id%3D036e8ef67ffec9055e7942df976c1222%26scope%3Dancestry%2Bbasic%2Bhaplogroups%2Bnames%2Bphenotypes%253Aread%253Aall%26skip_buy_page%3D1&internal_login=1".
I replaced the shortcut with "https://www.23andme.com/en-ca/" and the issue went away.
Hopefully, Stardock will figure out why some icons cause the Fences app to malfunction after the upgrade to 3.1.