Workplace Ethics Advice

Is Whistleblowing an Ethical Practice?

A response to 'Is Whistleblowing an Ethical Practice?' by Ranjana Lal, a student at the Open Polytechnic of New Zealand

From time to time I receive a blog response that is more in the way of an essay commenting on one of my blogs. Typically, these essays are part of a university assignment to comment on a blog of interest. What follows is the essay by Ranjana Lal, a student at the Open Polytechnic of New Zealand. I have included my response to Ranjana below. Ranjana first wrote to me and said: “I’m currently doing a Business Ethics paper from the Open Polytechnic of New Zealand this semester and one of our assignment requirements is to comment on a Blog on one of the related topics in Business Ethics.   Below is my comment on ‘Is Whistle-blowing an ethical action’.”

You ask ‘is whistle-blowing an ethical action’?

Whistle-blowing always involves an actual or at least declared intention to prevent something bad that would otherwise occur. It always involves information that would not ordinarily be revealed.

Looking at the conclusions and certain criteria given by many ethicists, whistle-blowing is an ethical action. According to the standard theory – Michael Davis ‘Some Paradoxes of Whistle-blowing’ (Davis 1996) points that whistle-blowing is morally required when it is required at all; people have a moral obligation to prevent serious harm to others if they can do so with little costs to themselves. The action is morally justified when it meets the requiring five criteria. In his complicity theory, Davis states that because the whistle-bower is complicit in wrong doing rather than from the ability to prevent harm. There is a moral obligation to help right the situation.

I would also like to draw attention to the Utilitarian theory; the main question with Utilitarian is to which option for action will help produce the greatest amount of happiness and least harm? To support my answer from a general perspective in a case of fraudulent reporting behaviour, the option for a Utilitarian would be, to say nothing in the first place, secondly report the matter to the immediate manager and lastly blow the whistle externally – report outside the organisation.

Looking at these option and analysing the possible outcomes, saying nothing would likely result in the continuing fraudulent behaviour and if the fraud is discovered by any other means, this could cause a damaging effect for the ‘whistle-blower’. Also every employee has an obligation to report any such behaviour to their employer.

The second option – reporting the matter to the immediate manager could result in stopping the fraud, praise for both the ‘whistle-blower’ and the manager. The likely harm would be the loss of the employee who committed the fraud and possibly the ’whistle-blower’ not being trusted by fellow co-workers in the future. Lastly external ‘whistle-blowing’ reporting the fraud outside of the organisation would only result in publicity for the organisation, financial loss for the stakeholders. The only likely positive result from this action would be the ending of the fraudulent behaviour.

The Utilitarian would be morally obliged to the take the second option- report the matter to the immediate manager, as this would likely bring about the most happiness and least harm. Hence in a ‘general’ context and testing the Utilitarian theory, the second option reporting to the immediate manager is the morally correct action to take.

Further in the article you mention a person’s conscience of basic core values such as honesty, trustworthiness and integrity and so did the whistle-blower live up to the ethical standards whilst reporting.  (Duska, 1983) in his article ‘Whistle-blowing and Employee Loyalty’ argues that there is no obligation to loyalty because companies or businesses are not kind of things which are proper objects of loyalty.

It is not possible to be loyal to business as they produce a good or service which makes profit. He points out that people bound together in a business are not bound together for mutual fulfilment and support, but to divide labour so the business makes a profit. Loyalty lies in the existence of a relationship in which there is emotion, trust and confidence. Hence if there is no loyalty to a business or company because there is not emotional attachment how can one be disloyal?

I see an employment relationship as being based on the employment agreement signed by both parties unless loyalty is specified as a clause. There is no obligation from either side for it to be more than what the agreement is, so if whistle-blowing is an immoral action it means you are not fulfilling the terms of the contracted agreement you have with your employer.  For example, if you are disregarding you duties in order to seek out company wrong doing.  The deontologist might say that the rule ‘You should neglect your duties’ cannot be made universal so therefore the action cannot be morally right. A consequentialist still might argue that the harm caused to the company by the employee’s neglect is not as significant as the harm caused by the company’s wrongdoing to the community so therefore the action of whistle-blowing is an ethical action after attempting to right the wrong through internal means.

The significant point is whether the action of whistle-blowing reveals a company’s unlawful practice. If a company has not committed any offence and there is no benefit to either the whistle-blower or the community and the action has potential harm. If this is the case than Davis’ ‘standard’ theory (S4-S5) rule would apply, which is the “whistle-blower has evidence that would convince a reasonable, unbiased observer that his or her views of the threat is correct and has good reasons to believe that revealing the threat will most likely prevent the harm at reasonable cost” (P7).

So, when you ask ‘is whistle-blowing an ethical action’? In conclusion I do believe that whistle-blowing is an ethical action if done in the correct manner and also done for correct reasons because morally it is the correct thing to do, to prevent something bad that would have otherwise occurred.  As for incentivizing whistle-blowing, I believe it should be encouraged as long as the whistle-blower is acting with integrity and the intention is to prevent harm.

Article written by Ranjana Lal, Open Polytechnic of New Zealand

Comments written by Steven Mintz, Ethics Sage, on May 20, 2013

Workers with Disabilities Awarded $240 Million for Long-Term Abuse

Respect and Fair-Treatment Key Ethical Values in Disabilities Lawsuit and EEOC Award

On Wednesday, May 1, 2013, a Davenport, Iowa jury today awarded the U.S. Equal Employment Opportunity Commission (EEOC) damages totaling $240 million - the largest verdict in the federal agency's history - for disability discrimination and severe abuse. The $240 million verdict stems from a disability discrimination and abuse case involving a turkey company. I was thrilled to read of the verdict because it shows respect for those with disabilities and the need for fair treatment in the workplace -- a basic ethical value and foundational tenet of our society. However, the decision does remind us all that many people with disabilities are harmed by illegal discrimination in the workplace.

The EEOC's disability discrimination lawsuit accused Hill County Farms, which was doing business as Henry's Turkey Service, of subjecting 32 men who have intellectual disabilities to not only discrimination but also severe abuse from 2007 to 2009 at a labor camp in Iowa. The EEOC actually believes the company has been mistreating disabled workers at the camp for decades, in violation of the Americans with Disabilities Act, but the case was limited to the company's last two years of operation as required under federal law.

Over a period of about 40 years, Hill County Farms reportedly sent 1500 intellectually disabled men from Texas to Iowa where they worked in a meat processing plant. They were paid only 41 cents an hour. They were housed in a bunkhouse that had substandard living conditions, and which was finally shut down in 2009 when reporters at the Des Moines Register learned of it and began asking the state about the company's lack of any license to care for people with disabilities.

The men, who worked eviscerating turkeys, were physically abused and treated poorly daily, according to the lawsuit.

The men who worked at the plant from 2007 to 2009 were each awarded $5.5 million in compensatory damages and $2 million in punitive damages. In September, in a separate case, the company was also ordered to pay the men $1.3 million for the disability-based wage discrimination discussed below.

In addition to the EEOC disability-based harassment and discrimination verdict, the EEOC earlier won a $1.3 million wage discrimination judgment when Senior U.S. District Court Judge Charles R. Wolle found that, rather than the total of $65 dollars per month Henry's Turkey paid to the disabled workers while contracted to work on an evisceration line at the plant, the employees should have been compensated at the average wage of $11-12 per hour, reflecting pay typically earned by workers without intellectual disabilities who performed the same or similar work.  The EEOC's wage claims for each worker ranged from $28,000 to $45,000 in lost income over the course of their last two years before the Henry's Turkey Service operation was shut down in February 2009.

The sad part of this case is that the victims are not expected to actually receive the full amount of their jury awards because the company only has $4 million in assets. However, the EEOC is reportedly working to access as much compensation as possible for these men.

The EEOC disability discrimination case is ground-breaking in that it demonstrates that disabled workers have as much value as people without disabilities. The case reminds us all that we live in a free and equal society. There is no place in the workplace for unequal treatment of workers based on one’s religion, national heritage, sex, age, sexual preference, and existing disability. Let’s hope this case is the beginning of a new awareness of the indignities directed toward those with disabilities and the humanity of our ethical responsibilities to all citizens.

Blog posted by Steven Mintz, aka Ethics Sage, on May 8, 2013

Sexual Harassment in the Workplace

Signs of Sexual Harassment in the Workplace

What should you do if you think your boss may be doing something improper? It’s a question I deal with all the time in my ethics class. Of course, it depends on the action or behavior. Sexual harassment is a form of sex discrimination. The legal definition of sexual harassment is “unwelcome verbal, visual, or physical conduct of a sexual nature that is severe or pervasive and affects working conditions or creates a hostile work environment.”

Many sexual harassment cases filed under Title VII involve charges of a hostile environment due to unwelcome sexual advances, requests for sexual favors, and other verbal and physical conduct of a sexual nature. 

Employers must create and enforce sexual harassment policies and conduct sexual harassment training so that supervisors can recognize what is and what isn't considered to be sexual harassment. Supervisors are responsible for eliminating behavior that can lead to claims of a hostile environment in their departments.

A hostile work environment is defined as: sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature, when such advances, requests, or conduct have the purpose or effect of unreasonably interfering with an individual's work performance by creating an intimidating, hostile, humiliating, or sexually offensive work environment.

In order to show a hostile work environment, an employee must prove the following.

1. He/she was subjected to conduct of a sexual nature (e.g., inappropriate touching, sexual epithets, jokes, gossip, sexual comments, requests for sex, sexually suggestive pictures and objects, leering, whistling, sexual gestures).
2. The conduct was unwelcome.
3. The conduct had the purpose or effect of creating an intimidating, hostile, humiliating, or sexually offensive work environment.
4. The conduct unreasonably interfered with the employee's work performance or altered the terms and conditions of employment. (Note: This can hold true even when an employee does not suffer a tangible job detriment. Look at the totality of circumstances, including the nature, severity, and pervasiveness of the conduct and the psychological harm to the employee.)

Quid Pro Quo Harassment is "Something for something.” Let’s assume your boss threatens to stifle your career advancement unless you sleep with him. This is unlawful whether you submit and avoid the threatened harm or resist and suffer the consequences. Your first step should be to make it clear to your boss this is an unwelcomed advance. At the same time, you should determine the company policy on reporting such matters. If the offensive behavior persists, I recommend you talk to a trusted advisor and/or attorney. It may become a legal issue pending resolution of the matter. In all likelihood your advisor will tell you to go to the Human Resources department where Equal Employment Opportunity Commission (EEOC) matters are dealt with. Be sure to document your concerns – what did he do or say? When did he do it or say it? What did you say to him? How did he react to your concerns? Give a copy of the document to a trusted advisor or lawyer for possible future use in a legal action. The advisor can attest to the fact you provided the document on a specific day so that it wasn’t created after the fact. If the HR department does nothing or your boss doesn’t change his behavior, it’s time to file a formal sexual harassment complaint with the federal EEOC and/or your state’s fair employment agency.

You must first file with the EEOC before you file a lawsuit in federal or state court. Generally, you have 180 days to file the complaint. After you file a formal complaint with the EEOC or your state’s fair employment agency, you can also consider filing a lawsuit. You can sue for money damages, to get your job back, and you can also ask the court to make your employer change its practices to prevent future sexual harassment from occurring.

Both men and women can be victims of sexual harassment. In Fiscal Year 2011, the EEOC received 11,364 charges of sexual harassment down from the 13,867 received in 2008. The percentage of claims filed by men increased from 15.9% to 16.3%. The amount of monetary benefits paid out to victims, not including those obtained through litigation, increased from $47.4 million to $52.3 million indicating a greater success rate for the EEOC.

Remember, it’s ethically improper for someone to use his or her power and authority over you to exact favors or create a hostile work environment. Speak out if this happens to you. Do not show any kind of interest in going along with advances or tolerating repeated offensive gestures, comments, or actions. Once you start to demonstrate by your words or actions that it is acceptable behavior, it becomes much more difficult to take appropriate action to end it in the future.

If you have specific workplace issues and would like my advice, link on to the question box on my website: http://www.workplaceethicsadvice.com/.

 Workplace Ethics Advice posted by Ethics Sage on  April 24, 2013

2013 Ethisphere Most Ethical Companies

The Case of McDonald’s: Corporate vs. Personal Responsibility

I have been a frequent critic of businesses and business practice in my ethics sage and workplace ethics blogs so to be fair I am devoting this blog to the 2013 Ethisphere Institute’s “Most Ethical Companies around the World.”

The Ethisphere Institute is a think-tank organization that focuses on business ethics, corporate social responsibility, anti-corruption and sustainability.  Since 2007, Ethisphere has published a list of the world’s most ethical companies. In 2013, the list includes 140 companies including 43 international companies.

Of the 140 businesses recognized, 23 have received this honor every year since the list was first published including Aflac, American Express, General Electric, Patagonia and Starbucks.

Starbucks was the only company in the restaurants and cafes category to make the list this year. The last time another restaurant or cafe was recognized as one of the world’s most ethical companies was in 2009 when McDonald’s joined Starbucks on the list.  

The way the process works is a responsible employee, such as one in charge of corporate social responsibility, corporate governance, compliance and/or ethics, completes a questionnaire nominating a company. Ethisphere then look for signs of “ethical business leadership” including:

• Companies that proactively engage with the communities in which they serve, impact, or operate
• Companies that invest in innovation, quality and sustainable business practices that reduce resource consumption in the production or use of their products and/or increase consumer health or safety
• Companies that leverage relative positions of influence to affect positive industry change
• Companies that look strategically to profit fairly from such ethical leadership business practices, as ultimately only profit ensures continuance of desired institutional behavior.

Ethisphere does have some checks and balances in deciding on those that make the list including whether a member of leadership was named in a class-action lawsuit, was under government investigation or was a defendant in a serious civil action. These must be disclosed to Ethisphere.

I agree with Ethisphere on the ranking criteria and applaud the Institute for its efforts to improve ethical leadership of companies around the world. Ethical business practices don’t just earn a business a spot on Ethisphere’s list of the World’s Most Ethical Companies, these practices can also help in the long-term success of a business.  Companies that are committed to the standards set by the Ethisphere Institute are likely to attract and retain the most talented employees.  

I also applaud Ethisphere for removing McDonald’s from the list after one year. While it was a long time ago, we all remember the 1994 product liability lawsuit (Liebeck v. McDonald's Restaurants) known as the McDonald's coffee case. It became a flashpoint in the debate in the U.S. over tort reform after a jury awarded $2.86 million to Stella Liebeck, who suffered third degree burns in her pelvic region when she spilled hot coffee. The jury damages included $160,000 to cover medical expenses and compensatory damages and $2.7 million in punitive damages after finding the coffee was hotter than industry standards allowed. The trial judge reduced the final verdict to $640,000, and the parties settled for a confidential amount.

More relevant is a number of lawsuits filed against McDonald’s for health and employment conditions. Some of the cases are laughable but some may be legitimate.

On March 14, 2013, a lawsuit was filed against McDonald’s alleging that a child ate a used condom he found in the play area of one of the chain’s Chicago restaurants. The suit was filed on behalf of Anishi Spencer and her two sons, who were 3 and 2 years old at the time of the alleged incident in February 2012. This suit sounds a bit strange to me although it can’t be dismissed without a full hearing of the case. One would think, for example, that if the child became ill as a result of eating the condom and he went to an emergency room for treatment, the claims can be verified. Although I am not that naïve as to think the condom might have been placed in the playground by Spencer as a way to cash out on McDonalds’ desire to avoid bad publicity.

Then there is Shelley Lynn, who sued McDonald’s on March 28, 2012, along with her ex-husband, Keith Handley, and his restaurant company, Ivernia, in federal court in California. She claims that she met her ex while working the counter at McDonald’s, but that she was soon forced into working as a hooker. According to Lynn’s complaint, McDonald’s “failed to conduct a due diligence into the moral character of Handley when it sold franchises to him.”

Lynn claims McDonald’s “failed to properly supervise and train Handley, as a direct result of which Handley used his position as an employer and conspired with his corporation Ivernia to coerce and bribe two of Ivernia’s employees to make false statements against Lynn during Handley’s dissolution and to suppress relevant evidence he had disclosed about himself. Handley also engaged in pimping operations out of the McDonald’s franchises he owned,” according to the complaint.

On June 28, 2012, Marquita Thompson, who worked at a Chicago McDonald's, filed a lawsuit against franchisee DKA Enterprises LLC for circumstances surrounding her termination. Thompson claims she complained to restaurant management on several occasions that she believed the restaurant was in violation of Illinois public health related policies because of insect and vermin infestations in the restaurant. She was subsequently terminated. This is a serious matter as it may implicate McDonald’s in a whistleblower’s lawsuit.

Thompson alleges she made repeated verbal complaints and reports to her superiors – including the restaurant's general manager – about unsafe and unsanitary conditions around the restaurant's food storage and preparation areas and the employee break room. She claims she was informed by management that they would "take care of it."

The defendants have admitted in their court filings that Thompson had, in fact, informed the general manager of her concerns about the situation.

On or about June 25, 2010, Thompson claims she reported to the general manager that she saw a cockroach on her own salad. She believes this angered her general manager and claims she was fired shortly thereafter.

This was the second time in less than a year that a complaint has been filed against a McDonald’s franchise held by an entity owned by Darrell Winbush and Katina Winbush. Another complaint was filed against MRA Restaurants LLC, owned by the Winbush's, in late 2011, by former employee Melondy Paul, who alleges that she was berated and then terminated after informing restaurant management she was pregnant. If true, this could lead to a wrongful termination lawsuit against McDonald’s.

Finally, on July 23, 2002, a lawsuit was filed against McDonald’s and other fast food chains (Caesar Barber v. McDonald’s Corporation, et. al.)  seeking damages for the medical conditions of Barber brought on by consuming these corporations’ products. This case was dismissed in 2003 “without prejudice,” but never refiled. I put this lawsuit in the ridiculous category because it contends that a restaurant could be responsible for the physical condition of an unhealthy person. This case, and the hot coffee case, raise excellent ethical questions about one’s personal responsibility to make healthy decisions versus a “nanny state” mentality.

The bottom line is we live in a litigious society and each of us has to look deep inside our soul before bringing a lawsuit against any company for selling an “unsafe” product that we choose to use or eat all the while aware that it may cause health issues for us down the road.

I end this blog like so many with a quote by a famous person. In this case it is by Eleanor Roosevelt, the wife of former President Franklin Delano Roosevelt.

“In the long run, we shape our lives, and we shape ourselves. The process never ends until we die. And the choices we make are ultimately our own responsibility.”

Blog posted by Steven Mintz, aka Ethics Sage, on April 3, 2013

Top 10 Better Business Bureau Scams of 2012

Scamsters use Unconventional Methods to Dupe Innocent Victims

The Better Business Bureau investigates thousands of scams every year, and this past year launched two websites to help consumers figure out which offers are real and which ones are possibly frauds:

BBB Smart Investing (www.bbb.org/smart investing), informs consumers about investment Fraud, Ponzi schemes and risky investments, and helps them assess their risk, check out brokers, and avoid getting taken.

BBB Scam Stopper (www.bbb.org/scamstopper), educates consumers about the major types of scams and provides information on how to avoid them and how to report them.

The key to avoid being scammed is ask others what they would do and try to find out if the “offers” are scams by using the BBB and other resources such as the FBI. Here are BBB’s Top Ten Scams of 2012:

1. Top Overpayment/Fake Check Scam: Car Ads. The online ad says something like “Get Paid Just for Driving Around” - a prominent company is offering $400+ per week if you will drive around with their logo all over your car. They send a check to you, which you are supposed to deposit in your account and then wire part of the payment to the graphic designer who will customize the ad for your vehicle. A week later, the check bounces, the graphic designer is nowhere to be found, and you are out the money you wired.

2. Top Emergency Scam: Grandparents Scam. A grandchild/niece/nephew/friend is traveling abroad and calls/texts/emails to say he or she has been mugged/arrested/hurt and needs money right away (“…and please don’t tell mom and dad!”). Before you wire money in an emergency, check with the supposed victim or their family members to make sure they really are traveling.

3. Top Employment Scam: Mystery Shopping. If you love to shop, working as a secret shopper may sound like an ideal way to supplement your income. But scammers have figured that out too, and many job offers are nothing more than a variation on the Overpayment/Fake Check Scam (above).

4. Top Advance Fee/Prepayment Scam: Nonexistent Loans. Most of the scams advertise online and promise things like no credit check or easy repayment terms. But, you have to make the first payment upfront, you have to buy an “insurance policy,” or there is some other kind of fee that you have to pay first to “secure” the loan.

5. Top Phishing Scam: President Obama Will Pay Your Utility Bills. Of all the politically-related scams, this one seemed to be the most prevalent. At the peak of summer with utility costs soaring, consumers got emails, letters and even door-to-door solicitations about a “new government program” to pay your utility bills.

6. Top Sweepstakes/Lottery Scam: Jamaican Phone Lottery. A call comes from Jamaica (area code 876) but the person claims to represent BBB/ FBI/ or other trusted group. You’re told you have won a terrific prize (i.e., $2 million or a Mercedes Benz) but you have to pay a fee in order to collect your winnings.

7. Top Identity Theft Scam: Fake Facebook Tweets. You get a Direct Message from a friend on Twitter with something about a video of you on Facebook. In a panic, you click on the link to see what the embarrassing video could possibly be, and you get an error message that says you need to update Flash or other video player. But the file is not a new version of Flash; it is a virus or malware that can steal confidential information from your computer or smart phone.

8. Top Home Improvement Scam: Sandy “Storm Chasers.” Services such as tree removal, roofing, general home repairs related to Sandy come from unlicensed, uninsured and ill-prepared contractors for the work. Some take your money, never do the work, and then disappear.  In an emergency, it is tempting to skip reference checking, but that is never a good idea.

9. Top Sales/Rental Scam: Real Stars, Fake Goods. From tickets to the Super Bowl to the World Series, counterfeit goods are not only a rip-off for you because the merchandise is usually shoddy, but they are also a rip-off for the teams, athletes, designers and artists who create, license and sell the real thing.

10. Scam of the Year: Newtown Charity Scams. Within hours of the horrific shooting at Sandy Hook Elementary School in Newtown, Conn., social media pages dedicated to the child victims began cropping up…and some of them were scams asking for money. The FBI has already arrested one woman for posing as the aunt of one of the children killed, and state and federal agencies are investigating other possible fraudulent and misleading solicitations.

I never cease to be amazed how some people won’t hesitate to take advantage of others who might find themselves in an emergency situation or make up such a story. Unfortunately, we have a pursuit of self-interests society where the main goal in life of scamsters is to get rich as quickly as possible even if it means lying, deceiving, using other people, and just being jerks. My advice is never go along with the kinds of solicitations mentioned in this blog unless you have done some research to determine its validity. Give it the “smell” test. If its sounds too good to be true, it probably is. Remember, there is no free lunch.

Blog posted by Steven Mintz, aka Ethics Sage, on January 17, 2013

What to do when you know a Fellow Employee Has Lied on His Resume

 Ethical Issues in Disclosing Past Sexual Harassment of a Fellow Employee

Last week I discussed with my students the prevalence of lying on a resume and discussed steps employers can take to better identify such falsehoods. I warned them about their ethical responsibilities in that regard. Lying on resumes has become all too common and cheat prospective employers out of important information in hiring decisions.

According to research conducted by The Society of Human Resource Managers, over 53% of individuals lie about their resume in some way. I recently read an interesting piece about the perils of lying on your resume. The question posed is what to do if you lie on a resume and subsequently are called in for an interview and asked to fill out an official job application.  When you complete the application you are legally affirming your dates of employment and your employment history. The company may verify those dates with your previous employer.

Of course, you shouldn’t lie on your resume in the first place. Even after you've been hired, lying on a job application is grounds for termination at any point in the future - even years later. It is wrong to do for many reasons not the least of which is you have misled all those who read your resume and make decisions whether to call you in for an interview. Trust is an essential element of ethical behavior and the cornerstone of workplace ethics.

Perhaps the more interesting question is what to do when you fill out that application. You can take your chances that the prospective employer won’t check on a false position or made-up employer. Doing nothing is always an option but it perpetuates the error in judgment. There is a saying in ethics that an error doesn’t become a mistake until you refuse to correct it.

Another option is to fill out the application correctly and hope that the employer doesn’t catch the “mistake.” You’d better be prepared to explain it, however, in case it is caught and brought up in the interview. Always think about the consequences of your actions before making a decision.

In this case the best way to handle the situation is to admit to the mistake, say that you realize it was wrong, and then promise not to do anything like it on the job. You may not get the position but you will gain the respect of the prospective employer and start to build a stronger foundation of ethical conduct.

In the second case, an employee, who I’ll call Frank, discovers that a newly-hired employee lied on his resume in order to gain employment. Frank knows that this employee omitted a job he was fired from for sexual harassment/hostile work environment two months prior to receiving his current position. He knows it because a friend of Frank’s worked with the newly-hired employee and told Frank about the incident. Does Frank have an obligation to report the employee to management?

There is a difference between a legal obligation and an ethical obligation. Legally, Frank does not have to report what he has discovered. The concept of ethical legalism holds that being ethical is the same as following the law. However, nothing could be further from the truth.

Ethical dilemmas occur in the workplace from time to time where an individual has no legal obligation to report but may be moved to report an unethical action.  Financial fraud comes to mind. While there is no legal requirement to report, it is the ethical step to take because others are harmed by the fraud such as shareholders and creditors. In knowing financial fraud exists a person is empowered to use that information to avoid harm to others. Yes, there may be workplace consequences for “whistle-blowing.” However, an ethical person is motivated out of a sense that it is the right thing to do or, as I have blogged about before, because of a conscience guided by a strong moral compass.

Going back to Frank’s ethical dilemma, as mentioned above, even after someone has been hired, lying on a job application is grounds for termination at any point in the future - even years later. Frank may know this and will become an accomplice to the act if he remains silent. In some companies there is an anonymous reporting system whereby a concerned employee can report possible wrong doing and the act will be investigated. Frank may be reluctant to go down this road for fear that any investigation will come back to him especially if he works closely with the offending employee.

Ethical behavior comes from the intent to do the right thing. Oftentimes a person knows the right thing to do but doesn’t do it out of fear of reprisal or being viewed as disloyal. I would advise Frank to consider how he would feel if he remains silent and the employee commits an act of sexual harassment in his workplace. Frank might have prevented it in the first place by informing the company of the lie. There is an analogy here with the Penn State University incident where those in the know stayed silent while Jerry Sandusky sexually molested young children and abused his position of influence both within and outside Penn State.

No one ever said ethics is easy. In fact, it is easier said than done. But, lying on one’s resume is a basic ethical responsibility. It’s not complicated. It’s all about treating others the way you want to be treated – the Golden Rule.

Blog posted by Steven Mintz, aka Ethics Sage, on January 11, 2013

 

Toyota Resolves Some of its Legal Problems

Unintended Acceleration of Toyota Models an Ethical Problem for Toyota

In 2009, Toyota encountered a problem with some of its models when news broke that there may be a sudden unintended acceleration on certain models. Toyota was hesitant at first to do anything, but after being forced to explain its actions in the U.S. Congress, the company did take corrective action. You might say that Toyota was nudged by congressional and public opinion to see that the rights of the driving public outweighed inaction. Toyota’s fix was to first cut the length of the accelerator pedals until replacement pedal assemblies become available and to install a brake-to-idle algorithm on affected models.

It all started five months before the new 2002 Lexus ES hit showroom floors when the company's U.S. engineers sent a test report to Toyota City in Japan: The luxury sedan shifted gears so roughly that it was "not acceptable for production." The warning was sent to Toyota Executive Vice President Katsuaki Watanabe on May 16, 2001. Days later, another Japanese executive sent an e-mail to top managers saying that despite misgivings among U.S. officials, the 2002 Lexus was "marginally acceptable for production." The new ES went on sale across the nation on October 1, 2001.

In years to come, thousands of Lexus buyers would discover firsthand that the vehicle's transmission problems, which caused it to hesitate when motorists hit the gas, or lurch forward unintentionally, were far from fixed. The 2002-2006 ES models would become the target of lawsuits, federal safety investigations and hundreds of consumer complaints, including claims of 49 injuries.

In an August 15, 2005, memo explaining the company’s position, a staff attorney wrote: "The objective will be to limit the number of vehicles to be serviced to those owners who complain and to limit the per-vehicle cost."

In 2010, Toyota was fined a record $16.4 million for delays in notifying federal safety officials about defects that could lead to sudden acceleration. The reaction of a Toyota spokesperson was: "Given the concerns raised by some customers about this drivability issue, we did not meet the very high customer satisfaction standards we set for ourselves. However, we fully stand behind the engineering and production quality of the vehicle, as well as our after-sale customer service and technical support."

On December 27, 2012, Toyota took the first step to resolving its legal problems. With a proposed payout of more than $1 billion, one major chapter of a nearly four-year legal saga that left Toyota Motor Corp. fighting hundreds of lawsuits and struggling with a tarnished image has ended, though another remains.

The settlement — unprecedented in its size according to a plaintiff's attorney — brings an end to claims from owners who said the value of their vehicles plunged after recalls over sudden and unintended acceleration.

Lawsuits claiming that the defects caused injury or death remain, with the first trial beginning in February unless another major deal comes first.

The courtroom claims began with a highway tragedy. A California Highway Patrol officer and three of his family members were killed in suburban San Diego in 2009 after their car, a Toyota-built Lexus, reached speeds of more than 120 mph, hit an SUV, launched off an embankment, rolled several times and burst into flames.

Investigators determined that a wrong-size floor mat trapped the accelerator and caused the crash.

That discovery, and the accident's grisliness, spurred a series of recalls involving more than 14 million vehicles and a flood of lawsuits soon followed, with numerous complaints of accelerations in several models, and brake defects with the Prius hybrid.

The Japanese automaker initially was blinded to the problem blaming instead driver error, faulty floor mats and stuck accelerator pedals for the problems.

The runaway Lexus case was settled separately for $10 million in 2010, before the cases were consolidated by U.S. District Judge James Selna.

Selna divided them into two categories: economic loss and wrongful death. Last week’s settlement only applies to the first group of lawsuits.

Toyota said it will take a one-time, $1.1 billion pre-tax charge against earnings to cover the estimated costs of the settlement. Berman said the total value of the deal is between $1.2 billion and $1.4 billion.

As part of the economic loss settlement, Toyota will offer cash payments from a pool of about $250 million to eligible customers who sold vehicles or turned in leased vehicles between September 2009 and December 2010.

The company also will launch a $250 million program for 16 million current owners to provide supplemental warranty coverage for certain vehicle components, and it will retrofit about 3.2 million vehicles with a brake override system. An override system is designed to ensure a car will stop when the brakes are applied, even if the accelerator pedal is depressed.

The settlement would also establish additional driver education programs and fund new research into advanced safety technologies.

"In keeping with our core principles, we have structured this agreement in ways that work to put our customers first and demonstrate that they can count on Toyota to stand behind our vehicles," said Christopher Reynolds, Toyota vice president and general counsel.

Toyota has been morally blind to the problem with unintended acceleration from the start. First trying to limit the company’s exposure; then blaming driver error; and finally trying to reclaim the “customer satisfaction” high road with self-serving statements. Clearly, the scandal has not materially affected sales in the US. The September 2012 sales pace was 14.94 million vehicles as calculated on an annualized basis, exceeding analyst estimates of 14.5 million, according to Autodata Corp. This was the highest rate since March 2008, about four months after the start of the recession of 2007-2009.

U.S. auto sales in November rose 13 percent to 1,188,865 new vehicles. Analysts, on average, had expected an increase of less than 9 percent.

Perhaps Toyota is immune to market share loss and lost sales revenue even when they violate basic standards of corporate responsibility and customer safety. Let’s hope Toyota has learned its lesson and will encourage ethical corporate behavior in the future.

Blog posted by Steven Mintz, aka Ethics Sage, on January 5, 2013

Cyberbullying and School Responsibilities

We need to Treat Each Other Better and Reinstate a Societal Ethic

In March 2010, a federal jury ordered the Hudson Area School District in Michigan to pay $800,000 in damages to a student who endured years of emotional, physical, and sexual bullying.  Dane Patterson was in middle school when the bullying began as simple name calling and verbal harassment.  It escalated in high school and included being pushed into lockers and at least one incident in 10th grade where he was sexually harassed – which involved “a naked student rubbing against him” in a locker room.

According to the Cyberbullying Research Center, most states require their schools to have an anti-bullying policy, as does Hudson Schools.  On some occasions when bullying was reported to the school and the perpetrators could be identified, they were punished.  In other cases teachers who witnessed bullying or who were made aware of it failed to follow through with involving school administration.  And according to court records, in one case a geography teacher actually contributed to the problem by making fun of Patterson in front of the entire class by saying: “How does it feel to be hit by a girl?” after he was slapped by a female student when he attempted to stop her from bullying a classmate. 

The message to schools is that inaction, or an improper response, is not enough when it comes to dealing with bullies.  Schools need to be proactive in preventing bullying from getting out of control.  It is one thing to have a policy in place prohibiting bullying.  It is more important for schools to actively enforce it and take additional steps to foster a positive climate in which bullying of all kinds is not tolerated (by staff or students). 

So, what is the answer to the cyber-bullying problem that threatens the mental and physical health of all too many of our young school children? First, teachers and staff need to be sensitized to the signs of cyber-bullying, how to respond to such incidents, and the reporting mechanisms within the school/school district. Just as sexual harassment training has helped to inform men and women in the workplace to the danger signs of sexual harassment and how it harms others, we need a similar approach to educate youngsters, teachers and staff to the equally egregious offense of cyber bullying.

Standing by and watching it occur without doing anything is contributing to a culture where bullying is considered to be acceptable behavior. For the most part, young children have not developed a moral conscience at the stage of life when bullying first occurs in schools. They have no frame of reference to know it is wrong; parents typically don’t discuss it with their kids; schools do little to educate youngsters about the harmful effects of bullying.

Cyber-bullying is the most serious problem facing our schools today and the consequences can be devastating including suicidal ideation on the part of the bullied individual and even suicide.

Cyber-bullying has become all too common in part because of social media. The bullying can be done anonymously. The party being bullied may not even know the person doing the bullying. According to a University of Michigan study, the consequences of bullying are short and long term and cover a wide range of severity. At the beginning of bullying, the self-esteem of the victim is hit very hard. The victim feels guilty and confused at the same time, trying to figure out why this is happening to them. As it continues, social skills begin to fade away even more and depression starts to set in. If no help is found or if the bullying isn’t even noticed, more severe consequences start to surface. Not so much in middle school, but in the beginning of high school, victims may drop out of school all together. In the most severe cases, suicide is considered and eventually carried out. In the long run, many bullying victims fail to thrive in adulthood: they distrust relationships, are fearful, experience isolation and have difficulties standing up for themselves.

We need a change in the culture of society that uses the anonymity of the Internet and social media postings to mock others and strip away their dignity. It often starts with offensive postings and can lead to videotaping the event that goes viral.

Likewise, the ethical standards of our schools need to catch up with the technology. Students must be taught an Internet ethic just as they should be taught societal ethics in the classroom. Given the amount of time most teenagers spend online each day, accountability and personal responsibility must become part of each school's response to cyber-bullying. There should be zero tolerance for such activities with suspension and ultimately expulsion the penalties for harassing another student in cyberspace. I ask: “Where is the moral outrage? Do we have to wait until a horrific event such as a mass suicide occurs before passing legislation making cyber-bullying a federal crime as are discrimination and sexual harassment?”

I can’t help but wonder whether Adam Lanza, the mass killer at Sandy Hook Elementary School in Connecticut, was bullied because he may have had Asperger’s syndrome. Of course, that doesn’t excuse his behavior. What he did was horrific and shocked our national conscience. It does, however, raise the broader question in society and the workplace as to how we treat others and the possible harmful effects of discriminatory actions in any form.

Blog posted by Steven Mintz, aka Ethics Sage, on December 26, 2012

 

 

Workplace Bullying

What to do if you feel you are Being Bullied

Workplace bullying refers to repeated, unreasonable actions of individuals (or a group) directed towards an employee (or a group of employees), which are intended to intimidate, degrade, humiliate, or undermine, or which create a risk to the health or safety of the employee(s) including physical and emotional stress. Workplace bullying often involves an abuse or misuse of power. Bullying behavior creates feelings of defenselessness and injustice in the target and undermines an individual’s right to dignity at work. Bullying is different from aggression. Whereas aggression may involve a single act, bullying involves repeated attacks against the target, creating an on-going pattern of behavior. “Tough” or “demanding” bosses are not necessarily bullies as long as they are respectful and fair and their primary motivation is to obtain the best performance by setting high yet reasonable expectations for working safely.

Examples of workplace bullying include:

• Unwarranted or invalid criticism
• Blame without factual justification
• Being treated differently than the rest of your work group
• Being sworn at/shouted at/ or humiliated
• Exclusion or social isolation
• Excessive monitoring or micro-managing
• Being given work unrealistic deadlines

A real-life example reported to “Bully-free Workplace” tells the story of an employee who said she had become a target shortly after a co-worker made a false allegation against her.  Her manager began a campaign to drive her out of the workplace by replacing her duties with menial tasks, denying time off, refusing to speak to her except to reprimand, writing her up for minor and contrived infractions, sabotaging her work, enlisting others to monitor and criticize her work, and physically intimidating her. 

These are classic signs of bullying. The manager did everything he could to make the work environment so uncomfortable for the worker that (he hoped) she would quite on her own accord. Sometimes it works; sometimes it does not. In this case the employee stood her ground and is trying to cope with the workplace pressure caused by the bullying manager and co-workers.

Workplace buying taken to its extreme filters throughout the organization and infects its culture. Signs of corporate and institutional bullying include:

• Failure to meet organizational goals;
• Increased frequencies of grievances, resignations, and requests for transfers;
• Increased absence due to sickness; and
• Increased disciplinary actions.

Of course, workplace bullying is always wrong. It violates an employee’s right to work in an environment that is supportive and not a hostile work environment. Beyond that, employers that sanction workplace bullying and managers who engage in it fail to realize the costs of the abusive practice including:

• Replacing staff members that leave as a result of being bullied, cost of training new employees.
• Work effort being displaced as staff cope with bullying incidents (i.e., effort being directed away from work productivity and towards coping)
• Costs associated with investigations of ill treatment and potential legal action

Bullying is different from harassment which is one type of illegal discrimination and is defined as offensive and unwelcome conduct, serious enough to adversely affect the terms and conditions of a person’s employment, which occurs because of the person’s protected class, and can be imputed to the employer. An example of harassment could be when an employee tells racist jokes and refers to a particular co-worker or group of co-workers by using racial slurs, and after a complaint, the employer does nothing to stop the behavior. Another example is when a male (or female) manager makes unwelcome sexual suggestions and/or touches another employee inappropriately. This, of course, is an example of sexual harassment.

Bullying in general is not illegal in the U.S. unless it involves harassment based on race/color, religion, national origin, sex, age (40+), disability, HIV/AIDS, or Hepatitis status. Some states go further and include marital status, sexual orientation/gender identity, honorably discharged veteran and military status or retaliation for filing a whistleblower compliant. Know your state laws on this matter by contacting your state's human rights commission.

Here are some suggestions if you believe you are being bullied:

• First and most important, realize you are not the source of the problem
• Recognize that bullying is about control, and therefore has nothing to do with your performance
• Keep a diary detailing the nature of the bullying (e.g., dates, times, places, what was said or done and who was present)
• Obtain copies of harassing/bullying paper trails; hold onto copies of documents that contradict the bully's accusations against you (e.g., time sheets, audit reports, etc.)
• Expect the bully to deny and perhaps misconstrue your accusations; have a witness with you during any meetings with the bully; report the behavior to an appropriate person

For conscientious employers I offer up the following advice:

• Create a zero tolerance anti-bullying policy that is part of your efforts to create a safe and healthful working environment that should have the support of top management
• When witnessed or reported, the bullying should be addressed immediately
• If bullying is entrenched in the organization, complaints need to be taken seriously and investigated promptly (reassignment of the bully may be necessary)
• Develop training programs to sensitize employees to the signs and dangers of bullying in the workplace, and explain how bullies will be dealt with

Workplace bullying is a disgraceful practice that attacks the very dignity of the bullied. It needs to be taken seriously by employers not only because it is an offensive practice, but also if bullying is allowed to persist unchecked, it may lay the seeds for other inappropriate workplace behavior including sexual harassment and even fudging on one's expense reports once employees realize the culture of the organization is such that abusive practices are tolerated.

Blog posted by Steven Mintz, aka Ethics Sage, on December 5, 2012

What is sexual harassment in the Workplace?

How to Identify Sexual Harassment in the Workplace

Although most workplace harassment is male to female, the problem encompasses much more than gender and sex discrimination. According to Title VII of the Civil Rights Act of 1964, individuals with legally protected characteristics have a right to work in an environment free from unwanted intimidation, ridicule, degradation and sexual advances. Title VII defines harassment as “sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature.” You should learn to identify workplace harassment to protect your rights and the rights of others.

Complex relationships and social media in today’s hectic workplace environment often lead to inappropriate staff interactions. Employees on the receiving end of unwanted touching, gesturing, comments, or postings have a legal right to press charges against their employer. If you are facing such a predicament, please consider contacting a local employment law attorney as soon as possible. What follows is some useful information to identify some of the actions of sexual harassment.

Sexual harassment can include everything from grabs and pokes, to gestures and lewd comments. These inappropriate actions can victimize both males and females, and encompass a wide range of unwanted behaviors. If you are receiving inappropriate attention from supervisors or coworkers, there is a good chance that you are experiencing sexual harassment. Sexual harassment generally falls into one of two categories: quid pro quo, which involves a suggestion of sexual favors in return for job benefits, and the creation of a hostile work environment. Both types entitle the victim to press charges in court.

Here is some basic advice and a few specific examples of sexual harassment in the workplace:

• You feel uncomfortable at work because others make unwanted comments or take unwanted actions based on your legally protected characteristics, such as age, religion, race, gender, sexual orientation and disability.
• You can be the victim of workplace harassment even if you are not the perpetrator's intended target. If you overhear harassing comments or witness harassing behavior that you find offensive, you may have a legitimate workplace harassment claim.
• Examples of workplace sexual harassment include, but are not limited to, inappropriate staring, unwanted comments about appearance, making sexual gestures, telling sexually explicit jokes, and displaying or distributing lewd materials.
• It is illegal to make jokes, display or distribute materials, perpetuate stereotypes, or make derogatory or threatening comments targeted toward individuals or groups with legally protected characteristics.
• Although anybody, including vendors and other third parties, can create a hostile work environment, only those with supervisory positions can commit workplace harassment that results in a tangible change in employment status. A manager cannot take any action against an employee, such as hiring, firing, demotion or transfer, based on protected characteristics.
• Draw the line when appropriate. Although it is legal, within certain parameters, to compliment coworkers and to display personal materials in the workplace, harassment law has some gray areas, so it's better to be safe than sorry. For example, while it's legal to ask a coworker for a romantic date, repeated unwanted requests and advancements can constitute harassment.
• Distinguish unwanted actions from consensual behavior. Workplace harassment, by definition, must be unwanted on the part of the target. In order for harassment to constitute a hostile work environment, it must be pervasive and offensive from an objective standpoint.

When investigating allegations of sexual harassment, the Equal Employment Opportunity Commission (EEOC) looks at the whole record: the circumstances, such as the nature of the sexual advances, and the context in which the alleged incidents occurred. A determination on the allegations is made from the facts on a case-by-case basis.

Prevention is the best tool to eliminate sexual harassment in the workplace. Employers are encouraged to take steps necessary to prevent sexual harassment from occurring. They should clearly communicate to employees that sexual harassment will not be tolerated. They can do so by establishing an effective complaint or grievance process and taking immediate and appropriate action when an employee complains.

From my perspective, short of filing a legal claim against the harasser, the best thing to do is to go on record with your claim in case matters get worse later on. Go to your HR (personnel) department; give them a complete picture of what happened; and ask them to take action to resolve the matter. It's also a good idea a keep a record of all events related to the unwanted behavior (i.e., a journal). Write down who said what to you on what date, what did you say in response, what actions did you take, if any, and so on. I would give a copy of the journal to a trusted advisor so he or she can attest to it being a verifiable claim. The record forever memorializes the offensive statements and any related actions against you.

In my next blog I will discuss workplace bullying.

Blog posted by Steven Mintz, aka Ethics Sage, on November 28, 2012