Business Ethical Analysis
Using the Badaracco framework (Lecture Text - Joseph L. Badaracco, Jr.: Defining Moments) and this legal analysis, prepare a memo for Human Resources. Be concise.
Scenario:
You are the ethics officer at Friendly Digits, a respected and profitable social media company in Colossal Corporation's technology group. Friday morning, you arrive at your office to find you've received a voicemail from Ernst Blofeld. Blofeld has been a vice president at Friendly Digits for several years, and was recently considered for promotion to a senior vice president position. Ultimately, the promotion was awarded to another long term employee, Tara King. You find it difficult to make out some of Blofeld's message. The words are occasionally slurred, as though he may have had a little too much to drink. I'm in Palm Springs for a conference, he explains, and I ran into a nice couple here at the hotel bar. You'd never believe it, but they're old friends of Tara's from school. I told them about her promotion, and they said she never finished her degree. She dropped out of the MBA program they all attended, and they never saw her again. You have to get to HR to check this out for me.
You check Friendly Digits policy manual, which states that potential employees must submit transcripts for all degrees listed on their resumes. But this requirement was not in place 10 years ago when Tara King was hired. King has received excellent performance evaluations during her time at Friendly Digits, and her leadership has led to increased revenue and positive press for the company. Her record of success is what led to her promotion. After a brief consultation with Mindy Wu, the director of human resources, you telephone King. Based on current HR policy, we're asking all employees who don't have official transcripts on file, to submit them to the human resources department. There is a silence at King's end, then in a shaky voice, she tells you that she does not in fact have an MBA. I was 12 credits away from completing my degree, she says, but then my dad got sick and I had to drop out. I really needed a job to support my family. I put the MBA on my resume because I hoped it would help me get hired. I always intended to go back to school, but I never did. It was a really stressful time.
You tell King that you need a little time to think about the situation. You promise to call her back as soon as possible. You know that an MBA was not a requirement for the assistant project specialist job King was hired for 10 years ago. But four years ago, it was made a requirement for the senior vice president position she holds now. Two of the current senior vice presidents do not have MBA degrees, because they were promoted before this requirement was in place. Mindy Wu has asked you to write a memo with your recommendations on how human resources should handle this issue. King has a record of excellence with Friendly Digits, and her superiors would be unhappy to lose her.
The nature of an organization's business and the environment the business operates in will guide management in ensuring that decisions are both legal and ethical. In this project, make ethically responsible decisions by applying an ethical decision-making model to resolve a business ethics instance.
This memo will be evaluated using the competencies listed below.
Tailor communications to the audience. Follow conventions of Standard Written English. Develop well-reasoned ideas, conclusions or decisions, checking them against relevant criteria and benchmarks. Develop constructive resolutions for ethical dilemmas based on application of ethical theories, principles, and models. Apply the principles of employment law for ethical practices and risk mitigation.
The ethical aspects of King's situation seem complex, and it is realized there is a structured way to think through the various possibilities and their implications. Use the Badaracco's Right vs. Right Framework situation. Use ethical analysis options for action and winners and losers for each option. What is the best ethical course of action?
Professor Joseph Badaracco developed a framework for addressing those more difficult questions, and particularly those questions of "right versus right"; that is, when an ethical dilemma could result in multiple "right" responses, based in attempted adherence to multiple, conflicting ethical values that cannot simultaneously be fulfilled. Badaracco's framework aims to resolve ethical dilemmas involving conflicting yet legitimate moral values.
In addition to the ethical aspects of King's situation, there may be legal implications that the human resources department needs to account for before moving forward with any plan of action. Review any relevant information about fraud that might affect what could or should be done about King, including employment at will.
What are the possible legal implications and recommend a course of action for Friendly Digits's HR department, present the analyses, recommendations, and action plan in a memo to Mindy Wu, the Human Resource Director.
Employment at will is a doctrine of common law that allows either the employee or the employer to terminate an employment relationship at any time, for any reason, with or without notice, and even for a morally reprehensible reason, so long as the ending of the relationship does not fall into an exception to the employment-at-will doctrine.
Employment at will is the prevailing legal doctrine concerning employment relationship termination in 49 US states (not Montana). In the overwhelming majority of the United States, employment at will and its exceptions govern the rules by which one may legally terminate an employee.
The generally accepted exceptions to employment at will include: express contract; implied contract; promissory estoppel; public policy violations; good faith and fair dealing.
Express Contract Exception
If an employer terminates an employee in violation of the terms of an express contract between the employer and employee, then the employee can sue the employer for breach of contract (and, in some states, wrongful termination).
Examples: An employment contract guarantees that the employee will be employed by the employer for a definite duration of time, with cognizable boundaries, such as a "one-year period" or "for six months." The employer terminates the employee before the stated period has expired, and that termination is not otherwise permitted by the contract.
A similar case: An employment contract states that an employee can be terminated only "for cause" or "for just cause." The employee is terminated without cause.
Implied Contract Exception
Implied contracts are contracts created by the conduct of the parties, which include any representations or assurances made by the employer prior to or during the term of employment. In some states, an implied contract is an exception to the employment-at-will doctrine.
Example: If an employer provides an employee handbook to a new employee, the provisions in the handbook may be considered part of the contractual relationship. Often, such handbooks outline a procedure for performance review, discipline, and discharge of the employee. An employer who fails to live up to procedural obligations prior to discharging an employee could be liable.
Promissory Estoppel Exception
In many states, promissory estoppel acts as an exception to the employment-at-will doctrine. That is, when an employer makes a promise to an employee of employment or a period of employment, and the employee relies on that promise to his detriment, and it leads to injustice, then an employee may be able to have that promise enforced regardless of employment at will.
Example: John is offered a job with Widget Co. He discusses with Widget's manager that, to take the job, he needs to move from California to New Jersey and give up an already lucrative position with benefits. The manager assures John that he will have gainful employment and a substantially larger income with Widget Co. for at least a year if he makes the move. In reliance on this promise, John quits his job and moves to New Jersey to begin work at Widget Co. After one week, John is laid off. Despite being an employee at will, John may be able to recover under the theory of promissory estoppel.
Public Policy Violations Exception
Most states in the United States prohibit an employer from firing an employee if the reason for the action violates some readily accepted public policy. This prohibition prevents an employer from terminating an employee for exercising a legal right, including a right contained in state and federal laws; or for failing to perform an illegal act for the employer.
Examples: Firing an employee for performing some public duty (showing up to jury duty), for exposing illegal conduct (such as reporting violation of some law to the employer or a government agency), or for exercising her rights as a US or state citizen (such as voting) are all against public policy.
This exception to employment at will encompasses the inability to terminate an employee if doing so would violate her state or federal statutory rights. If an employee is terminated because of her race, this may be a violation of Title VII of the Civil Rights Act of 1964, and so an otherwise at-will employee would have a claim against the employer for violating a federal statute.
Moreover, it is against public policy to terminate an employee for refusing to commit an illegal act, such as a crime.
Good Faith and Fair Dealing Exception
A minority of states impose upon the employer a duty to exercise good faith and fair dealing in regard to all employees. This doctrine, to varying degrees, means that an employer must treat an employee fairly in the decision to fire her. This generally means that an employee would violate these duties in firing an employee without due cause or justification.
The preceding five generally accepted exceptions to employment at will allow injured parties to seek recovery even in the face of the employment-at-will doctrine. As such, they limit the circumstances by which an employer can terminate an employee.