Law, Ethics, and Corporate Governance
AnnMarie Seidler
Dr. Charity Lanier
Legal 500
October 30, 2013

As the Chief Operating Officer (COO) of a midsize company that is preparing for an Initial Public Offering (IPO), I discover several personnel problems that require my immediate attention. It is my duty to be familiar with the Employee-at-will Doctrine and any exceptions if any that may apply to the employees and my employer. While preparing to deal with our personnel problems I discover that my company does not have a Whistle Blower Policy in place and I will address this issue with my CEO. As we present our company to the public, we need to consider Corporate Social Responsibility (CSR), and how we impact our employees, our environment, our customers, retailers, wholesalers, (possible shareholders), from the very top to the very bottom. In order to be successful we must consider more than just the bottom line, the dollar. As I address each employee issue, I considered not only state and federal laws but also what if any long-term impacts my decision may have upon the entire company and community at large. The Employee-at-will is a legal doctrine “which gives employers broad discretion to fire employees for a good reason, a bad reason, or no reason at all.” Halbert & Ingulli, (2012).There are three major exceptions to the rule to help prevent wrongful termination but only two of them apply in the state where I reside of WV. The Public-policy exception and Implied-contract exception are recognized as exceptions to the employee-at-will doctrine in West Virginia. West Virginia does not recognize the “covenant of good faith and fair dealing” policy. Muhi, (2001). Employees have the right to form collective bargaining unions, these unions help form collective agreements which are made to protect employees from being fired except for “good cause.” Tort law has made it possible for discharged employees to sue and recover monetary damages for violation of “public policy.” Public law applies when a plaintiff is able to show unlawful action such as illegal discrimination or retribution for whistleblowing. Cornell University Law School, (2010). I have several employees, 8 (eight) to be exact, that must be dealt with immediately. First, John, posted on his Facebook page criticizing our company’s most important client. The fact that my employee criticized our most important client on his Facebook page requires action. Since John is not protected by the National Labor Relations Act, I will refer to the employee-at-will doctrine. John can be fired for his posts under the common law exception for bad behavior. His post impacts our companies business and ability to perform and interact with our clients. I applied the Utilitarian approach to support my action, as we want to minimize harm and maximize good and add value to society while maximizing stakeholder wealth. This ties into the Corporate Social Responsibility approach. John will be fired.
Second, Jim sent emails out to other sales people protesting a change made in commission schedules and bonuses. He suggested everyone boycott the next sales meeting. Jim falls under the exception of “invasion of privacy.” There is no privacy issue here, he used the companies email system to express his opinion regarding pay and encouraged others to act against company policy. He is protected by freedom of speech with regards to his opinion, however, his is liable for the disruption of employer’s operation directly related to his bad behavior and can be terminated. I consider business and virtue ethics in making my final decision. I decided to hold a mandatory meeting for our salespeople to discuss recent changes made on commission and bonuses. This meeting offers opportunity to share comments, questions and concerns. By using virtue ethics, I plan on creating an environment where we encourage a positive, moral and ethical work environment, which in the long-run will benefit corporate profit.
Third, Ellen who started a blog to protest the CEO’s bonus, noting that no one below director has gotten a raise in two (2) years and portraying her bosses as “know-nothings” and “out-of-touch.” Ellen can blog all she wants and is protected by freedom of speech. It is not unusual for employees to complain or make comments on other peoples pay. I will speak with her directly and apply the ethics of care approach “by nurturing and reinforcing the ties we have with one another,” bringing collectively a happier work environment. Halbert & Ingulli, (2012).
Four, Bill who has been using his company-issued BlackBerry to run his own business on the side has no privacy protection and can be fired for using his company issued phone on company time for purposes other than company business. He is in violation of his employment contract. Bill will be terminated not only because of his misuse of the company cell phone, but for not performing his job duties at work. He will be terminated for “good cause” and does not have any legal protection. I referred to Business and Deontology ethics in making my decision.
Five, the secretaries in the accounting department decided to dress in black-and-white stripes to protest a memo announcing that the company has installed keylogger software on all company computers. As long as we don’t have a specific dress code in place, the secretaries can dress as they wish. Freedom of speech comes in all forms and is protected by law. The company has every right to install Keylogger software on all company computers, as long as the company uses the software as stated and not for illegal purposes, I’ll let them dress as they wish. I used the Utilitarianism approach believing that “given the situation” my decision would produce the greatest overall good. I will also require an in-service for all employees on the use and installation of the Keylogger software.
Six, Joe who has been disciplined for criticizing a customer in an email (on a company computer) is threatening to sue the company for invasion of privacy. There is already a case file on Joe pertaining to the disciplinary action taken. Joe voluntarily communicated over the company email system, thus expectation of privacy is lost. Our company is not legally bound by the tort known as “invasion of privacy.” I referred to Michael A. Smyth V. The Pillsbury Company. United States District Court, 1996 914 F. Sup.97 to support my decision and followed the Utilitarianism approach with him.
Seven, a supervisor wants to fire his secretary for insubordination. After speaking with her, I determine that she is not guilty of insubordination by refusing to prepare false expense reports for her boss. I spoke with her supervisor and determine that further investigation needs to be done, ie. a financial analysis of the supervisors expense reports. The secretary’s supervisor is informed that he cannot nor can the company fire her for refusing to break “public policy, and public law,” in addition, the supervisor shall be suspended pending the results of the financial report. Deontology ethics was applied here, we as a company, as a citizen must keep ourselves honest, ethical, and moral which in the long-run will establish a working environment that supports such positive behavior. Proper documentation will be placed in each employee file.
Eight, Anna’s boss refused to sign her leave request for jury duty and now wants to fire her for being absent without permission. We cannot fire her for performing a public duty, she is protected by the tort of wrongful discharge. The rights ethical approach was used here, Anna has rights not only with how she should be treated as an individual but also abiding by the law. She is exercising her legal rights. Beesley, (2012).
I recommend to the CEO that a Whistleblowing policy be put in place. We are planning on becoming a publicly traded company and need to be aware of our rights as a company and those of our employees. There are several state and federal laws, statutes and torts that we must familiarize ourselves. With a sound policy, we should be able to handle internal concerns before they get out of hand, harming not only the employee but the employers as well as the shareholders. First, the policy shall inform employees of the appropriate steps to take in communicating their ethical concerns internally. Second, our employees must believe that their concerns will be taken seriously and will be investigated. Third, our employees must feel confident that they will not suffer personal reprisals for using the appropriate internal channels to report perceived wrongdoing. In addition to the three fundamental items I’ve included, I also suggest that the Whistleblowing policy should include the following components.
1. A clear statement that employees who are aware of possible wrongdoing within the organization have a responsibility to disclose that information to appropriate parties inside the organization;
2. The designation of specific individuals or groups outside the chain of command as complaint recipients;
3. A guarantee that employees who in good faith disclose perceived wrongdoing to the designated parties inside the organization will be protected from adverse employment consequences; and
4. The establishment of a fair and impartial investigative process. Barnett, (1992). As a company there are many rules, laws, regulations, state, federal, torts, judicial rulings and whatever else you can throw in the basket that can make or break a company. It is our responsibility to be familiar with and/or know where to find the information needed. Having a whistleblowing policy in place will be beneficial for everyone in the long-run.

References:
Charles J. Muhi, (2001). The employment-at-will doctrine: three major exceptions. Retrieved from http://www.bls.gov/opub/mlr/2001/01/art1full.pdf
Cornell University Law School, (2010). Wrongful Termination. Retrieved from http://www.law.cornell.edu/wex/wrongful_termination
Halbert & Ingulli, (2012). 7th ed. Law and Ethics in the Business Environment. Cengage Learning
Tim Barnett, (1992). Why Your Company Should Have A Whistleblowing Policy. Retrieved from http://ethics.csc.ncsu.edu/old/12_00/basics/whistle/rst/wstlblo_policy.html