2.What steps could an organizational leader take to integrate a multigenerational, diverse workforce into the corporate culture?

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O P E N I N G CA S E

Two Profi les

Profi le of the New (Younger) Workforce “Stand back all bosses! A new breed of American worker is about to attack everything you hold sacred: from giving orders, to your starched white shirt and tie. They are called, among other things, ‘Millennials.’ There are about 80 million of them, born between 1980 and 1995 [others say between 1982 and 2003], and they’re rapidly taking over from the Baby Boomers who are now pushing 60.”1 “We are beginning to see in- creasingly younger people come in and ask long-term questions; fi ve years down the road, where can I grow in this company? This was not necessarily the case with Gen X [people born between 1964 and 1981]. There is also a greater emphasis on bonding within an institu- tion. Some companies are actually having camps and retreats where

7.6 Whistle- Blowing versus Or gan i za tion al Loyalty

Chapter Summary

Questions

Exercises

Real- Time Ethical Dilemma

Cases 19. Preemployment Screening and

Facebook: Ethical Considerations

20. Women on Wall Street: Fighting for Equality in a Male- Dominated Industry

Notes

7.1 Employee Stakeholders in the Changing Workforce

Ethical Insight 7.1

Point/CounterPoint

7.2 The Changing Social Contract between Corporations and Employees

7.3 Employee and Employer Rights and Responsibilities

Ethical Insight 7.2

7.4 Discrimination, Equal Employment Opportunity, and Affi rmative Action

Ethical Insight 7.3

7.5 Sexual Harassment in the Workplace

7 E M P L O Y E E S TA K E H O L D E R S

A N D T H E C O R P O R AT I O N

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7 Employee Stakeholders and the Corporation 425

they immerse people into living with one another 24/7 (like Accenture), learning the lore of the company. This would not have gone well with Gen X. This would have caused a riot with the Boomers, and Gen X sim- ply wouldn’t have been interested. . . . Employers hate the parental pres- ence, but it is now extending into the workforce. . . . Excessive parental involvement was originally the single biggest complaint among teachers several years ago, then it predictably moved into colleges, and now it is becoming a pervasive issue in HR [human resource] departments with parents doing everything from helping fi ll out applications to actually com- ing to their children’s interviews. . . . Many employers are working with this trend . . . employers are now working on co- marketing to parents.”2

Second Profi le of the New (Older) Workforce “Shirley Serey is the community college student of the future: 59 years old, MBA, corporate manager, breast cancer survivor— and new teacher of special education, helping fourth and fi fth graders with disabilities learn to read. . . . Serey is at the leading edge of tens of millions of Baby Boomers who are beginning to shift into a new phase of life and work. As many as four out of fi ve people in their 50s and 60s say they expect to continue to work, some because they have to for fi nancial reasons, but many more because they want to, for the social connections, intel- lectual engagement, and fulfi llment of making a difference. Neither old nor young, many are seeking ‘encore careers’ that combine a renewed commitment with continued income and increased fl exibility. . . . Shirley Serey is typical of the target market for such encore colleges. Her story weaves several themes common to boomers managing transitions to this new stage of life— the need for fl exibility, the unexpected obstacles in the search for meaning, an impulse to give something back, to help other people, and to make a direct and noticeable impact.”3

Employers and employees are experiencing a different mix of values, styles, and dilemmas in the changing workplace, as the above scenarios indicate. A review of workforce trends also indicates signifi cant changes at the societal level, for example, “the Department of Labor must work with a wide spectrum of job seekers, including those with special needs such as the disadvantaged, people with disabilities, veterans, disad- vantaged youth, and those who have lost their jobs due to foreign com- petition. Addressing the job seekers’ needs is further complicated by the dynamics of the changing workplace. New technologies, increased competition, and changing labor markets have prompted employers to downsize, change employment patterns, and seek alternative labor sources such as qualifi ed foreign workers.”4 A 2011 policy summit on America’s “workforce mosaic” revealed that “America’s workforce is currently being shaped by three converging trends: rapid growth in the non- white population, baby boomers who are staying in the workforce

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426 Business Ethics

longer, and veterans returning from the ongoing wars in Iraq and Af- ghan i stan.” UNC research shows that “79 million baby boomers will exit the U.S. workforce over the next 20 years.” This graying workforce will result in some signifi cant losses of experienced and top- level employ- ees of large companies and a potential shortage of American workers.5

This chapter addresses the following questions: What is different about today’s workforce, and how does this affect the corporation’s ethical responsibilities? What, if anything, binds employees to their companies these days? What is the changing nature of the employer– employee social and psychological contract? How has this contract changed historically? What are the boundaries of employee loyalty? When do employees have the right or obligation to “blow the whistle” on a company?

A number of issues that employees and employers face are also presented, such as dating in the workplace, same- sex marriage rights, types of discrimination, drug testing, Internet use, privacy, and sexual harassment. The rights and responsibilities of both employers and em- ployees are discussed with the aim of offering perspectives on what stakeholders can expect and how ethical dilemmas can be prevented and solved, beginning with an awareness of these issues. Creating a legal and ethical working environment where mutual respect and con- cern create conditions for productivity and human development is a worthy goal.

7.1 Employee Stakeholders in the Changing Workforce

The forces of globalization, deregulation, shareholder activism, and informa- tion technology continue to infl uence business practices and pro cesses, as discussed in the previous chapters. Industries and companies are downsizing, restructuring, merging, and reinventing their businesses. Mid- level manage- ment layers are being pressured, many diminishing. Functions are being out- sourced, off shored, eliminated, and replaced by online automation, cheaper international labor, and networked infrastructures. Knowledge workers with technological and people skills must manage pro cesses and themselves in cyber- space with speed, effi ciency, and accuracy.

Within the context of the “digital economy,” the following changes with employees and professional stakeholders continue to occur:6

• An increasing shift to knowledge work, which increases the potential for satisfying work but heightens stress.

• The concept of “a job and career for life” is dead or dying. An employee holds nine jobs by the age of 30. Professionals are changing careers fi ve to eight times on average during their working lives. Compensation, income, and the social distribution of benefi ts, including health care, are pressured by changing national and global economic conditions. Decreases

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in income are occurring among middle- and low- level professionals, and the gap between upper- and mid- to- low- level income holders is widening.

• Quality of work life is not inherent or guaranteed in the workplace. In one worst- case scenario, Thomas Malone of MIT stated that all work relationships could possibly be mediated by the market, with every employee functioning as a company in shifting alliances and ventures.7

Change in the workforce and workplace presents ethical tensions and issues that are addressed in this chapter.

The Aging Workforce

According to the Bureau of Labor Statistics, “the baby- boom generation moves entirely into the 55- years- and- older age group by 2020, increasing that age group’s share of the labor force from 19.5 percent in 2010 to 25.2 percent in 2020. The ‘prime- age’ working group (ages 25 to 54) is projected to drop to 63.7 percent of the 2020 labor force.”8 In 2001, for the fi rst time, the num- ber of workers aged 40 and older surpassed the number of those younger than 40. At the same time, those aged 16 to 24— the “Baby Busters” (who were born after the Boomers)— made up 16% of the workforce, a proportion that continues to decrease. The se niors, older than age 55, represented about 13% of the workforce. Se niors are now projected to represent 25.2% of the 2020 workforce, with the “Baby Busters” representing only 11.2% in 2020. “Over the 2010– 2020 de cade, 54.8 million total job openings are expected. While growth will lead to many openings, more then half— 61.6 percent— will come from the need to replace workers who retire or otherwise permanently leave an occupation.” Japan was the fi rst nation ever with a population in which the average age is 40. By 2020, 6 out of 10 Japa nese workers will be retired.9 Combined with generational diff erences, age diff erences can aggravate values and work ethic clashes as this chapter’s Real- Time Dilemma exemplifi es. Does age play a role in that dilemma?

One result of the population growth slowdown is that the number of managerial leadership positions will outstrip available talent. “While the im- pact will vary in diff erent countries, the aging workforce coupled with declin- ing birth rates in some countries will result in a shrinking talent pool that will require organizations to review and modify their human resource policies to adjust to the changing environment.”10 Older workers will be needed for their skills and experience, and also because of the shortage of younger workers to replace them.11

Generational Differences in the Workplace

As this chapter’s opening case suggests, generational diff erences off er chal- lenges to coworkers and managers. Generational analysis looks at diff erences among worldviews, attitudes, and values of generations of Americans. Large diff erences in the generations from World War II to the present in the U.S. population have had a substantial infl uence on government, corporate, and

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workplace policies. This information, although subjective, is used to develop workplace strategies and to evaluate ethical principles and beliefs of diff erent groups in the workforce.12 The following brief summary of fi ve generations’ dominant value orientations highlights some of these diff erences. As you read the descriptions of generational profi les, turn again to this chapter’s Real- Time Dilemma to help explain possible sources of the confl ict and potential or gan i za tion al issues and dilemmas that are about to erupt.

• GI Generation (born 1901– 1925). This generation survived the Great Depres- sion and served in World War II. Members of this generation are churchgo- ers and belong to clubs and professional organizations. They express rugged individualism but are members of many groups. They tend to believe in upward mobility, civic virtue, and the American Dream.

• Silent Generation (born 1926– 1945). This generation was too young to fi ght in World War II. They were infl uenced by the patriotism and self- sacrifi ce of the GI generation, from whom they did not wish to diff erentiate them- selves. Their dominant principles are allegiance to law and order, patriotism, and faith. The Silent Generation likes memorabilia such as plaques, trophies, and pictures of themselves with important people. Most members are already in some form of retirement (i.e., fully retired or working part time, occa- sionally or seasonally to bring in some additional income).13 If nothing else, the title promised a look at an era long gone: the 1950s; that is, the object of knowing derision today buried in clichés about a time when America was the land of happy automatons— a people unthinking, accepting, and re- pressed. The 1950s were characterized by serious, non- revolutionaries, and jobs- and marriage- focused young, in stark contrast to the more colorful de cades to come— years of riots, bomb- throwing, seizure of the universi- ties and the reign of the Weathermen.14 This generation is characterized by “giving back and contributing to the collective good.”15

• Baby Boomers (born 1945– 1964). This is currently the most powerful demo- graphic generation, with approximately 77 million members. They have led and set trends in society. They distinguish themselves from the former generations by assuming debt. Their “buy now, pay later” belief characterizes their instant gratifi cation practices. They can be moralistic, but they ques- tion authority and the moral and ethical principles of institutions. They do not “ join” or sacrifi ce personal plea sure for the good of the group or collec- tive. They mix and match religious traditions and avoid the dogma and teachings of single religions. Baby boomers value health and wellness, per- sonal growth, involvement, public recognition, status symbols, fi rst- class travel upgrades, visible roles such as speaking at an industry trade show, and any type of resort or retreat. As employees, they are “process- oriented and relationship- focused.”16 Baby Boomers (who represented 44% of the working population in 2012) have the lowest level of engagement, and they have the highest level of active disengagement— nearly one in four are actively disengaged. Because this generation makes up such a large part of the working population, and many may be in the workforce long past

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the traditional retirement age, a targeted eff ort to raise these workers’ en- gagement levels could have important ramifi cations for companies and the overall U.S. economy.17 More so than other generations, Baby Boom- ers respond to managers who make an extra eff ort to show that they care. Managers should keep this in mind during day- to- day interactions and fi nd ways to communicate interest in these employees by inquiring about their work and other important aspects of their lives.18

• Generation X (born 1965– 1981). Known as the “Baby Busters,” this genera- tion has 41 million members. Sandwiched between the two larger genera- tions, they feel demographically overlooked. They came from a time of high national debt and bleak job markets, and were labeled as the “McJob” generation— a phrase referring to holders of low- and entry- level jobs. This generation generally believes that they will get less materially than the boomers. Insecurity is a dominant theme for X-ers, who value close friends and virtual families more than material success. They, like the boomers, are also suspicious of institutions. They experience their journey through life as one that changes rapidly and continuously.

• Generation Y (born 1982– 2003). The millennial generation (or “Echo Boomers”) numbers about 80 million. They spend $170 billion a year of their parents’ and their own money and comprise one- third of the U.S. population. They have grown up with tele vi sion, computers, instant mes- saging, and new technologies, just as the Boomers grew up with the tele- phone. Y-ers don’t want to be associated with X-ers, whom they believe are selfi sh and complaining and the least heroic generation— a bunch of “slackers.” Y-ers started growing up with a strong job market. They are ambitious, motivated, extremely impatient and demanding, and have a sense of entitlement.

This group is also extremely practical. They welcome clear rules and guidelines, and display high levels of trust and optimism. They are keenly aware of current events and are sensitive to their surroundings. They defi ne success in terms of team rather than individual achievement.19 Millennials place a high priority on workplace culture and desire a work environment that emphasizes teamwork and a sense of community. They also value trans- parency (especially as it relates to decisions about their careers, compensa- tion and rewards). They want to provide input on their work assignments and want and need the support of their supervisors. Millennials also are particularly attuned to the world around them, and many want the chance to explore overseas positions. All of the above statements also are true of non- Millennials, yet not to the same degree as the Millennial generation. With regard to ethics, members of this generation observe fewer boundar- ies than previous generations; are more fl exible about when and where to apply boundaries; are more open, transparent, fl exible; are more likely to discuss work activity with private and public people; are more likely to en- gage in and tolerate behavior that is unacceptable; are a more at- risk gen- eration than the others, and, therefore, are more likely to observe misconduct and experience retaliation after reporting it; are more likely than older

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generations to use ethics and compliance offi cers; and are more likely to respond to ethics and compliance programs that include social interaction and support (training, advice, helplines).20

Generation Y is more positive than other employee groups and is more likely to agree that “se nior management communicates a clear vision of the future direction of my or ga ni za tion.” They:

• have more favorable views on workplace issues, from work– life balance to per for mance reviews, to having access to their immediate supervisor.

• value teamwork and fairness and are more critical than other age groups on issues of fairness and cooperation.

• want to be challenged at work. • are motivated less by money and more by opportunities to advance and

have a life outside of the offi ce. • are concerned about tuition reimbursement and fl exible spending

accounts for dependent care.

Over half of Generation Y-ers would leave their or ga ni za tion to work for an or ga ni za tion that off ered better benefi ts.21 At this point in their ca- reers, Millennials are generally more upbeat about all aspects of engagement than are Baby Boomers or Generation X members, but Millennials are par- ticularly more positive about growth and development opportunities. De- spite their higher engagement levels, Millennials are the most likely of all generations to say they will leave their company in the next 12 months if the job market improves. More than one in four of these young workers strongly agreed with this statement when asked in 2012.22

From a manager’s perspective, Generation Y employees require “super- high maintenance,” since they are “on fast- forward with self- esteem.” They often expect offi ce cultures to adapt to them. With these attitudes, they generally require coaching, rigorous feedback, and smaller and more realistic goal setting, with deadlines and increasing responsibility.

From the employer’s perspective, integrating individual and group diff er- ences in the workforce requires, as mentioned earlier, leadership, planning, new policies, and training. In larger, more complex organizations, providing education and training to integrate the workforce is a necessity.23 With which of these values do you identify? What other values that are not listed here mo- tivate you? Underlying individual values combined with other background factors infl uence perceptions, beliefs, behaviors, and ethical decisions.

Steps for Integrating a Multigenerational Workforce

Generational diff erences may be only one among several issues that cause confl ict and ethical dilemmas in the workplace. Using communication skills and emotional intelligence (managing self, others, and relationships with awareness and sensitivity) are important. Here are steps that employers can use to help diagnose, prevent, and resolve misunderstood generational diff er-

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ences. If you are not a boss, team leader, or supervisor, read these steps as if you were one. Taking this perspective can help you see the larger picture outside of a par tic u lar generational lens.24

Identify the Problem Areas Where do I see the problems? Where do I expect to see the problems? Is there resentment about special treatment to se nior or younger members in the workplace? Are the problems between individuals or groups from diff erent generations? What are the sources of the problems: value diff erences, rewards, motivation, work methods, other?

Get To Know the Individuals Inside Their Roles and Positions For Millennials and Gen X-ers, as well as members of other generations, it is important to arrange for conversations to discuss broader topics and subjects that are important to them. Do not wait for employees to come to you; it is important to plan, arrange, and invite individuals to conversations where needs and perceptions can be shared in nonthreatening ways. Being able to listen to the other’s views, opinions, and perceived or experienced issues will help you understand the person and his or her issues. These are necessary fi rst steps that lead to problem resolution.

Understand and Anticipate Expectations of Different Generations “One size (of leadership or management) does not fi t all.” Although indi- viduals must be recognized and treated as the unique individuals they are, it is also important for managers to seek balance between the employee and the company. Knowing generational members’ expectations is important in negotiating this balance between responsibilities and obligations. “This can be achieved when a company (1) does not ask too much of its employees and (2) knows what it’s willing to give employees before they’ve been given too much.”25

Develop a Personal Growth and Development Plan for Each Employee Millennials and Gen X-ers value and enjoy learning and benefi t from their work when they are engaged. Assisting them to develop specifi c future goals and marketable skills is motivational and will focus their high work ethic and energy toward positive eff ort and outcomes.

Engage and Communicate Younger entrants into the workforce are accustomed to being engaged, not mandated or reprimanded in an authoritarian way. Seek their input and advice. Confl icts between Gen X-ers and Millennials often occur when the former try to take charge over the latter. Neither likes to be told unilaterally what to do. If reprimands or criticisms are necessary, these can best be communicated one on one, as soon as a wrong action is done, and as objectively as possible. Reverse mentoring and mutual mentoring are two newer ways that Gen X-ers and previous generational types can learn from younger professionals. These more recent forms of mentoring can be eff ective ways of sharing and

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learning diff erent professional values and work ethics. Generation X, Millen- nials, and Baby Boomers are all most engaged when they have the opportunity to do what they do best every day. Engagement for Millennials, Generation X, and Baby Boomers is connected to having a strong sense of what their or ga ni- za tion stands for. Find ways to help these employees verbalize and internalize what the company’s mission and purpose means to them.26

Be a Leader, Not a Friend Gen X-ers and Millennials are looking for role models in organizations, not buddies in a boss. Both generational members want to be led, since they gen- erally have friends. This does not mean that they want to be led by authori- tarian or unreasonable leaders. Character counts. Gen X-ers and Millennials move toward bosses who have strong character. They know when they see strong character. For eff ective managers, character means, “Do what you say and say what you do” in a reliable, trustworthy way and “Do the right thing”— although it may not always be comfortable.

Ethical Insight 7.1

Bridging Diversity Gaps in the Workplace

Do Companies Use Mentoring Programs and Why Are They Signifi cant? • 71% of Fortune 500 companies and 76% of Fortune’s top 25 companies

operate a mentoring program. • Promotion: 75% of executives point to mentoring as playing a key role in

their careers; and 44% of CEOs list mentoring programs as one of the three most eff ective strategies to enhance women’s advancement into se nior management.

• Productivity: Managerial productivity increased by 88% when mentoring was involved, versus only a 24% increase with training alone.

• Development: More than 60% of college and graduate students listed mentoring as a criterion for selecting an employer after graduation; 96% of executives say mentoring is an important development tool.

• Retention: 77% of companies report that mentoring programs were eff ective in increasing retention; 35% of employees who do not receive regular mentoring look for another job within 12 months.”

New and Changing Types of Mentoring Programs The old mentoring model assigned a younger professional to a more se nior pro- fessional for an indefi nite time. The following programs refl ect new trends:

• Short- term, goal- oriented mentoring: Mentor/mentee are paired with specifi c goals that have time limits.

• Peer- to- peer mentoring: Young employees are paired together. • Speed mentoring: Mentor/mentee are paired in restricted time- bound

sessions for quick- hit information and networking, e.g., one hour.

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7 Employee Stakeholders and the Corporation 433

• E-mentoring: E-mail is the medium between paired mentee and mentor. • Reverse mentoring: Se nior executives’ mentees are paired with younger

professional mentors to help se nior executives catch up on new practices.

• Job- fi t- related mentoring: Par tic u lar mentors and mentees are assigned to work on specifi c jobs.

• Mutual learning, adaptation, and change: Mentor and mentee are paired based on a learning partnership aimed at mutual growth and development.

Questions 1. Which of the above types of mentoring programs might help ease the

potential ethical dilemmas in this chapter’s Real- Time Dilemma? 2. Suggest how one or more of the mentoring programs here might be arranged

by Ralph the CEO to help Bill and Lana’s working relationship.

Sources: Katz, N. (February 2007). Enhancing eff ectiveness in mentoring. Nation’s Cities Weekly. http://www.insala.com/Articles/leadership-coaching/mentoring-current-trends.asp, accessed

April 22, 2014. Mentoring: Current trends. (November 16, 2007). Insala.com. http:// www .insala .com /Articles

/leadership -coaching /mentoring -current -trends .asp, accessed January 8, 2014. Off steing, E., Morwick, J., and Shah A. (March 22, 2007). Mentoring programs and jobs: A

contingency approach. Review of Business, 27(3), 32– 37. Petrin, R. ( June 6, 2011). Business mentoring matters. Management Mentors. http:// www

.management -mentors .com /about /corporate -mentoring -matters -blog /bid /62174 /Statistics -on -Corporate -Mentoring, accessed January 9, 2014.

Women in the Workforce

In 2011, women accounted for 47% of all employed persons 16 years of age and older.27 In the same year, 58.1% of women were in the labor force, down 0.5% from 2010.28 Overall, however, this percentage has increased from 43% four de cades ago. The labor force participation rate has increased during this period in all of the countries studied by the Bureau of Labor Statistics, except Japan. In 2009, only a few countries, notably Canada and Sweden, had labor force participation rates for women that were higher than the U.S. rate.29

Women now “own 40 percent of all businesses and hold 43% of executive, administrative and managerial positions in the U.S. economy, narrowing the male- female wage gap to its lowest point in history.”30 Women have held over half of all managerial and professional specialty positions in 2013. Of members of boards of directors, 16.6% are women, and 8.1% of top earners are women. Meanwhile, 4.2% of Fortune 500 CEOs were women, and 14.3% of Fortune 500 corporate offi cers were women.31 The Families and Work Institute also noted, in their National Study of the Changing Workforce, that “the desire for jobs with more responsibility among young women with children is at its highest point.” Women have also made educational advances.

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434 Business Ethics

It is projected that by 2016, women will “earn 60% of bachelor’s, 63% of master’s and 54% of doctorate and professional degrees.”32 Figure 7.1 suggests questions leaders and managers can ask to assess whether or not their organi- zations are capitalizing on gender diversity.

Catalyst released a survey discussing “Women in U.S. Corporate Leader- ship” in 2003 titled “What Keeps Women from Reaching the Top?”33 The fi ndings showed the top fi ve barriers to be:

• Lack of signifi cant general management or line experience (47%). • Exclusion from informal networks (41%). • Stereotyping and preconceptions of women’s roles and abilities (33%). • Failure of se nior leadership to assume accountability for women’s

advancement (29%). • Commitment to personal/family responsibilities (26%).34

In the same study participants cited the following top fi ve success strate- gies they used to reach the top:

• Exceeding per for mance expectations (69%). • Successfully managing others (49%). • Developing a style with which male managers are comfortable (47%). • Having recognized expertise in a specifi c content area (46%). • Taking on diffi cult or highly visible assignments (40%).

Figure 7.1

Does Your Or ga ni za tion Capitalize on Gender Strength?

• What evidence demonstrates that women enjoy working in the or ga ni za tion, and how is this monitored?

• What training and development opportunities are there, and how well are these accessed? • What mentoring and coaching opportunities exist for women? How are these implemented

and monitored? • Do women have real choices about work– life responsibilities? • How is women’s advancement supported through internal networks? • Who are the women’s visible role models in the or ga ni za tion and why? • How does the or ga ni za tion actively attract and position itself with women? • What do the stats and trends show when it comes to attracting, retaining and develop-

ing women? • How can women be assured of fair and transparent promotion pro cesses, and acces-

sible dispute mechanisms? • How are equal pay for equal work, fair rewards, and recognition for women monitored? • What do the women think about the effectiveness of parental and care support options? • What external awards and recognitions have the or ga ni za tion (and the female employees)

received?

Source: Adapted from Aurora Gender Capital Management’s online ser vice for women to research and compare organizations at http:// www .wherewomenwanttowork .com .

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Do you agree with the top fi ve barriers women face to “get to the top” of organizations? If not, what factors do you believe account for the lack of ad- vancement of women to more se nior level and corporate board positions?

Same- Sex Marriages, Civil Unions, Domestic Partnerships, and Workforce Rights

The U.S. Supreme Court ruled on June 26, 2013 that section 3 of the Defense of Marriage Act is unconstitutional.35 The federal government can no longer discriminate against married lesbian and gay couples with regard to federal benefi ts and protections.36 Same- sex couples validly married by December 31, 2013 can fi le 2013 federal taxes as married couples.37 Other tax changes were also amended under this law.38

In 2004, Massachusetts became the fi rst state to grant gays and lesbians the right to marry. Whether or not other states will recognize Massachusetts’ same- sex unions is unresolved. How would the benefi ts be aff ected, for ex- ample, of a same- sex married Boston employee moved by an employer to another state that prohibits gay marriages? “Civil union,” a new legal cate- gory, has been created that extends rights to same- sex couples. At the time of writing, 13 states (Massachusetts, New Hampshire, Vermont, California, Connecticut, Iowa, Delaware, Minnesota, New York, Rhode Island, Maine, Mary land), plus the District of Columbia, allow same- sex marriage, and 35 states have limitations on it.39 Marriage licenses are now issued to same- sex couples in Massachusetts, Connecticut, Iowa, Vermont, New Hampshire, New York, and the District of Columbia. New York and Mary land are the only states, to date, that recognize same- sex marriages from other states. Civil unions, as mentioned above, provide state- level spousal rights and are allowed in the following states: Delaware, Hawaii, Illinois, New Jersey, and Rhode Island. “Domestic partnership,” another new category, was created that gives rights to unmarried couples, “including (but not necessarily lim- ited to) same- sex couples. Laws vary among states, cities, and counties. Ter- minology also varies; for example, Hawaii has “reciprocal benefi ciaries law.” Domestic partnerships granting nearly all state- level spousal rights are allowed in California, Oregon, Nevada, and Washington. Those providing only some state- level spousal rights are Hawaii, Maine, Wisconsin, and the District of Columbia. These rights are recognized only on the state or local level so designated.40

Similar domestic partnership systems exist across the globe. Same- sex marriage is now legal in all Canadian provinces. Sweden legalized same- sex marriage in 2009, following Norway in 2008. The Netherlands expanded its defi nition of marriage in 2001 to include both opposite- sex and same- sex couples. Belgium followed in 2003, and same- sex couples have been allowed to adopt children since 2006. Spain also voted to extend full marriage rights to same- sex couples in 2005. Portugal and Iceland legalized same- sex marriage in 2010,41 and Denmark followed in June 2012.42 Most recently, New Zea- land and France legalized it in 2013.

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Some po liti cal jurisdictions have special legislation that allows gay and lesbian couples to register their committed relationships and gain some ben- efi ts. However, they do not receive all of the advantages that opposite- gender couples automatically acquire when they marry. These areas include most of the Scandinavian nations, states in the United States where the arrangement is called a civil union, and others.43

Several states have also expanded the legal rights available to spouses in same- sex relationships, while also limiting marriage to opposite- sex couples with civil unions and domestic partnerships. Six states have adopted civil unions available to both same- sex and opposite- sex couples. Civil unions pro- vide legal recognition of the couples’ relationship, while providing legal rights to the partners, similar to those accorded to spouses in marriages. From July 1, 2013, civil unions ceased to be off ered in Delaware, and Rhode Island fol- lowed a month later, after the states’ respective same- sex marriage laws took eff ect. Two states have adopted broad domestic partnerships that grant nearly all state- level spousal rights to unmarried couples. Domestic partnerships are available to both same- sex and opposite- sex couples.44

“At least 9,390 employers in the U.S. off er domestic partner health ben- efi ts for their employees. Of these, 95% off er the benefi ts to both same- sex and diff erent- sex partners.” According to the Bureau of Labor Statistics, only “thirty- three percent of state and local government workers and 29 percent of private sector workers have access to health care benefi ts for unmarried domestic partners of the same sex.” A 2012 study showed that “51 percent of small businesses currently off er equal benefi ts to employees with same- sex partners or spouses, and 50 percent of those who do not say they would like to off er such benefi ts in the future.”45

The Increasing Cultural Mix: Minorities Are Becoming the Majority

By 2050, the U.S. population is expected to increase from 282.1 million to 439 million. By as early as 2042, white people will be a minority in the United States. According to new projections from the Census Bureau, “eth- nic and racial minorities will comprise a majority of the population of the United States in a little more than a generation.” Minorities including His- panics, Blacks, Asians, American Indians, and Native Hawaiians and Pacifi c Islanders “will together outnumber non- Hispanic whites.” African Ameri- cans, Asian Pacifi c Islanders, and Hispanics made up more than one- third of the U.S. population in 2010 and the numbers have only continued to rise. By 2050, minorities will represent 54% of America.46 The Hispanic com- munity is one of the greatest untapped markets we have ever seen. Already the largest minority in the United States, their numbers continue to grow faster than any other group. Between 2000 and 2010, the Hispanic popula- tion grew by 43%, or four times the nation’s 9.7% growth rate. In real num- bers, this was an increase of 15.2 million people of Hispanic descent and accounted for more than half of the total U.S. population increase of 27.3 million.

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The total population of Hispanics in the United States today is 50.5 mil- lion people strong. Hispanics are also one of the most optimistic groups: most believe the struggling economy has hit them the hardest, yet conversely, they have the highest hopes for the future. According to a Pew Hispanic Research survey conducted in January 2012, two- thirds of Hispanics expected to im- prove their fi nancial status in 2012, while in the general population just over half said the same.47

Factors aff ecting this trend are birthrates and immigration.48 Immigra- tion undeniably benefi ts the United States; the economic advantages are signifi cant. Many immigrants are natural entrepreneurs, establishing com- panies, creating jobs, and driving innovation. Well- educated and highly trained foreign workers are inventive and productive. Expanded work- forces increase business fl exibility, allowing companies to quickly respond to changing demands. Larger labor forces also encourage specialization. Labor productivity rises as companies adjust to larger work forces and invest in employees.49

It is projected that minorities “will constitute a majority of American children under 18 by 2023 and of working- age Americans by 2039.”50 This forecast indicates that by 2050, “the number of Hispanic people will nearly triple, to 133 million from 47 million, to account for 30 percent of Ameri- cans.” The Asian population is expected to increase to 41 million, or more than 9% of the U.S. population; and the black population will increase to 66 million, or 15% of the population over the same period. “Several states, in- cluding California and Texas, have already reached the point where members of minorities are the majority.” About 353 of the nation’s 3,143 counties, or 11%, are now “majority- minority.” Six of those counties tipped to that status in 2012: Mecklenburg, North Carolina; Cherokee, Oklahoma; Texas, Okla- homa; Bell, Texas; Hockley, Texas; and Terrell, Texas.51

For the fi rst time in more than a century, the number of deaths now ex- ceeds births among white Americans.52 The aging white population has a sig- nifi cant impact on the trend toward diversity. “When all the baby boomers will have turned 65, nearly 20 percent of Americans will be over 65. The government also projects that in fi ve years, minorities will make up more than half of children under 18. Not long after, the total U.S. white popula- tion will begin an inexorable decline in absolute numbers, due to aging baby boomers.”53 By 2050, about 89 million Americans will be in that group.54 The impact of these demographic changes on markets, customers, workforce composition, values, and ethics will be signifi cant.

Educational Weaknesses and Gaps

A recent global study on educational levels revealed several trends that will have a signifi cant impact on the workforce, not only in the United States, but on a global scale. “Globally, the number of children enrolled at the secondary level has tripled since 1970.”55 In addition, “95% of primary school graduates continue their education at the lower secondary level in most countries in Central and Eastern Eu rope, Central Asia, and North America and Western

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Eu rope.” The education of those entering the workforce is now being shaped heavily by globalization, which is characterized by the dominance of En glish “as the dominant language of scientifi c communication”; the availability of “universal means of instantaneous contact and simplifi ed scientifi c commu- nication,” and the “concentrated own ership of publishers, databases, and other key resources.” This has created an “in e qual ity among national higher edu- cation systems as well as within countries.” Countries in Africa, for example, are not positioned with the same resources and educational standing. China and India, on the other hand, are “currently the world’s largest and third largest academic systems.”

These educational trends and gaps aff ect the pool of applicants and current employees. For example, it is projected that the majority of the student popu- lation in the most developed countries will be comprised of women. It is also expected that “the mix of the student population will become more varied, with greater numbers of international students, older students, part- time stu- dents, and other types.”56 This diversity has already begun to be refl ected in the U.S. workforce.

A 2012 McKinsey & Co. report titled Education to Employment demon- strated the challenging mismatch between our educational system and the job skills employers need:57 45% of U.S. employers reported that lack of skills is the “main reason” for entry- level vacancies and only 42% of worldwide employ- ers believe new graduates are adequately prepared for work.58

Interestingly, the United States shows no gap in education attainment, with very high levels of literacy and women’s enrollment in primary, secondary, and tertiary education.59

POINT/COUNTERPOINT Student Education Debt and Loans: Whose Problem and Who Should Pay? Student loans exceed $1 trillion, which represents 81% of the most burdened borrowers. Those with over $40,000 of student debt have private loans with interest rates of or exceeding 8% or higher, according to the Consumer Fi- nancial Protection Bureau (CFPB). A College Board study stated that 60% of students who earned bachelor’s degrees in 2012 graduated with debt. The average debt was $26,500.

The U.S. Congress has approved new rates for federal loans allowing un- dergraduates to borrow at a 3.9% interest rate for subsidized and unsubsidized loans. Graduate students will be able to borrow at 5.4%, and parents can borrow at 6.4%, at least for 2013.

Unlike federal student loans, private loans cost more because they off er less repayment fl exibility and typically cannot be discharged in bankruptcy. Most student debt is diffi cult, almost impossible, to refi nance— burdening borrow- ers with high rates in a low- rate environment and slowing the economy. “Repaying a student loan should be simple,” CFPB director Richard Cordray said in a statement. “When ser vicers pro cess payments to maximize fees and

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penalties they undermine the trust of their customers. Student loan borrow- ers deserve better; they deserve transparency and accountability.”

Nearly half of all complaints were related to struggling borrowers who were seeking a loan modifi cation or other option to reduce their monthly payment.

The average American will also likely see interest rates increase as the Trea- sury increases rates to attract investors. Interest rates will also increase for mort- gages, car loans, student loans, and credit cards. The cost of higher education is also creating a sense of more burden than benefi t for some students. A Wells Fargo study found that one- third of Millennials said they would have been better off working instead of going to college because of having to pay tuition.

Rising costs in education increases student loan debt. An art degree costs as much as a computer science degree. Which is more likely to result in a job? Lenders, in this case the government, should make a fact- based determination of a student’s likelihood to graduate and get a job, and their expected income. Prospective students applying for loans could be evaluated for “credit worthi- ness” score. A student loan score would be based on a formula including their grade point average, major, and academic institution. Each of these variables is directly related to a student’s ability to get a job upon graduation and repay their loans. For example, a STEM (science, technology, engineering and mathematics) major at MIT would yield a higher score and loan compared to a religious studies major at a lesser- ranked school.

Instructions: (1) Each student individually will adopt either the Point or CounterPoint argument and justify their reasons (with arguments using this case and other evidence/opinions). (2) Then, either in teams or designated ar- rangements, each shares their reasons. (3) Class debrief and sharing of insights.

POINT: Students should pay their debts; they borrowed, they pay. What pre- ce dent does this set in a capitalist, market economy? It’s time to stop treating all degrees alike. Some degrees result in jobs, others don’t. Create a scoring system and even backdate it. Those degrees that have high job potential should have diff erent payback terms than those that don’t. If the loans are not paid, the economy continues to suff er and we all pay. Next, people will want the government to pay for their mortgages, car loans, and then what?

COUNTERPOINT: The government should forgive and absorb student loan debts. The loans and terms made were and are unstable and are near im- possible to collect from every student. Students are assets to the future of this country. Why treat them like their loans— liabilities? Education is the foun- dation of democracy. Should students be encouraged to become hourly wage workers at low- tech jobs? Learning how to think creates good citizens, a middle class, and entrepreneurs— and their degrees don’t have to be only in computer science.

SOURCES Jacobson, Louis. (October 13, 2013). Ten questions about debt ceiling. PolitiFact

.com. http:// www .politifact .com /truth -o -meter /article /2013 /oct /13 /ten -questions -about -debt -ceiling /, accessed January 8, 2014.

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Kadlec, Dan. (October 18, 2013). Student loans are becoming a drag on the U.S. economy. Time .com. http:// business .time .com /2013 /10 /18 /student -loan -are -becoming -a -drag -on -the -us -economy /, accessed January 8, 2014.

Nasiripour, Shahien. (October 22, 2013). Student loan servicing beset by prob- lems faces calls for overhaul. Huffi ngtonPost .com. http:// www .huffi ngtonpost . com /2013 /10 /22 /student -loan -servicing _n _4144760 .html, accessed January 8, 2014.

Onink, Troy. ( July 31, 2013). New student loan rates: 3.9% for students, 6.4% for parents. Forbes.com. http:// www .forbes .com /sites /troyonink /2013 /07 /31 / new -student -loan -rates -3 -9 -for -students -6 -4 -for -parents /, accessed January 8, 2014.

O’Shaughnessy, Lynn. (October 12, 2013). Lenders making life tough for student loan borrowers. CBSNews.com. http:// www .cbsnews .com /8301 -500395 _162 -57607806 /lenders -making -life -tough -for -student -loan -borrowers /, accessed January 8, 2014.

Sabhlok, Raj. (December 14, 2012). Student loan crisis solved—next problem? Forbes.com. http:// www .forbes .com /sites /rajsabhlok /2012 /12 /14 /student -loan -crisis -solved -next -problem /, accessed January 8, 2014.

Touryalai, Halah. (October 23, 2013). College costs slow down, but aid falls and average student’s debt hits $27k. Forbes.com. http:// www .forbes . com /sites /halahtouryalai /2013 /10 /23 /college -costs -slow -down -but -aid-falls -and -average -students -debt -hits -27k /, accessed January 8, 2014.

Walia, Hardeep. (September 26, 2013). The unspoken cause of the student loan crisis. Forbes.com. http:// www .forbes .com /sites /hardeepwalia /2013 /09 /26 /the -unspoken -cause -of -the -student -loan -crisis /, accessed January 8, 2014.

Mainstreaming Disabled Workers

Hiring and mainstreaming qualifi ed disabled workers is increasing in impor- tance because of the combined eff ects of the shrinking and aging of the workforce. The International Labor Or ga ni za tion estimated that 386 million working- age people globally have a disability, and that “unemployment among persons with disabilities is as high as 80 percent in some countries.”60 Disabilities aff ect a large percentage of the workforce. In 2004, only 35% of working- age people with disabilities in the United States were employed. “One third of the employers surveyed said that persons with disabilities can- not eff ectively perform the required job tasks. The second most common reason given for not hiring persons with disabilities was the fear of costly special facilities.” Disabilities are categorized as permanent (for example, physical disabilities), temporary (such as those resulting from injury or stress), and progressive (e.g., AIDS, alcohol and drug addiction, cancer). An assess- ment from the National Or ga ni za tion on Disability/Harris Survey of Ameri- cans with Disabilities concluded that disabled Americans are three times as likely to live in poverty as the general public, twice as likely to drop out of

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high school, and twice as likely to be constrained by transportation options; also, three times as many individuals with disabilities have less health care than the general public. It is interesting to note that “everybody is just one car wreck away, a diagnosis away, a progressive condition away from joining the ranks of the disabled.”61 Employers who hire persons with disabilities report they are more likely to be loyal, appreciative to their employers, and able to think outside the box.

Balancing Work and Life in Families

As more dual- career and child- rearing couples enter the workforce, confl icts and problems evolve over roles and responsibilities as families cope with workplace demands. Working family models illustrating these tensions have evolved over de cades. Four such models, which are summarized in Figure 7.2, include (1) an early model depicting complete separation of work and family life and issues, in which men worked and women maintained the family; (2) an overlapping model of “work” and “family life” spheres in which the boundaries were still fuzzy, but roles were recognized as being interrelated; (3) a model that defi ned multiple roles and responsibilities, including “his work,” “her

Figure 7.2

Evolution of Work and Family Life Systems Models

Source: Adapted with permission from Barnett, R. (March 1999). A new work– life model for the twenty- fi rst century. Annals of the American Academy of Po liti cal and Social Science, 562, 143– 158.

MODEL 1 THE SEPARATE SPHERES MODEL

MODEL 2 THE OVERLAPPING SPHERES MODEL

MODEL 3 THE WORK–LIFE INTEGRATION MODEL

MODEL 4 THE WORK–LIFE SYSTEMS FRAMEWORK

WORK WORK

FAMILY

Tension Conflict Win–Lose

LIFE

Buffer Resources Interdependence Win–Win

HIS WORK

HER WORK

WORKER’S SOCIAL SYSTEM

WORKER Workplace needs, values, and aspirations

Job conditions Job quality Workplace policies

Nonworkplace needs, values, and aspirations

SPOUSE Workplace needs, values, and aspirations

Job conditions Job quality Workplace policies

Nonworkplace needs, values, and aspirations

Children, Parents, Friends, Community

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work,” and “family” obligations, which, like the previous two models, was based on scarcity and zero- sum assumptions (i.e., a fi xed number of resources that resulted in win– lose situations) regarding the allocation and use of re- sources and responsibilities at home and at work; and (4) the most recent work– life systems model, which assumes a systems perspective in which roles and responsibilities are not seen as competitive, isolated, or overlapping in undefi ned ways between family members, and the or ga ni za tion and commu- nity are built into individual and family responsibilities, which are shared to optimize the well- being of the entire system (company, employees, and fami- lies). In the fourth model, the emphasis also shifts from individual and family to include workplace needs, values, and aspirations; job conditions; and qual- ity of life. Company policies are recognized as part of the work– life equation and include fl extime and part- time arrangements.

Several companies have consistently been ranked among the top 10 fi rms over the past fi ve years from the annual survey of the “100 Best Corporations for Working Mothers.” These companies include Deloitte, Discovery Com- munications, Ernst & Young, General Mills, Pricewater houseCoopers, Well- Star Health System, and Bank of America.62

In the following sections, we turn to topics regarding how employers have dealt with, and are dealing with, the legal and ethical issues of changing workforces.

7.2 The Changing Social Contract between Corporations and Employees

The social contract that has historically defi ned the employee– employer re- lationship is known as the “employment- at- will (EAW) doctrine.” Basically, the EAW doctrine holds that the employer can dismiss an employee at any time for any reason, as long as federal and state laws and union contracts are not violated; likewise, employees are also free to terminate their employment with a company whenever they choose and for what ever reason. This doctrine remains the dominant view of the employment relationship in the United States, although parts of the doctrine have eroded since its inception.63 The EAW doctrine has been in eff ect since 1884, when the Payne v. Western & Atlantic R.R. Co. judgment ruled that “all may dismiss their employees at will, be they many or few, for good cause, for no cause, or even for cause morally wrong without being thereby guilty of legal wrong.” Essentially, the EAW doctrine can be defi ned as “the right of an employer to fi re an employee with- out giving a reason and the right of an employee to quit when he or she chooses.”64 If employees are unprotected by unions or other written contracts, they can be fi red, according to this doctrine. As the insert “Read Carefully before Signing” shown in Figure 7.3 illustrates, employees can be and are asked to acknowledge how tenuous their “contract” with a company can be.

The EAW doctrine evolved as part of the laissez- faire philosophy of the Industrial Revolution. Between the 1930s and 1960s, however, excep-

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tions to the doctrine appeared. Federal legislation since the 1960s has been enacted to protect employees against racial discrimination and to provide rights to a minimum wage, to equal hiring and employment opportunities, and to participation in labor unions. Over time, the following exceptions to the EAW doctrine have evolved: (1) the good faith principle; (2) the public policy principle; and (3) implied contracts.

Good Faith Principle Exception

Some states have other obligations that must be addressed by employers, like “good faith” or “fair dealing” practices.65 A good faith principle is based on the premise that employers should practice fairness and reasonableness in their actions with employees. For example, an employer should demonstrate that opportunities were off ered for a terminated employee to improve his/her per for mance before the employee was fi red. Companies that demonstrate fairness in their dealings and policies with employees show good faith.66

Figure 7.3

Employee Contract under the EAW Doctrine

Read Carefully before Signing

I understand that refusal to submit to the testing noted [elsewhere] or a positive drug screen result will eliminate any consideration for employment.

I also certify that the statements and information furnished by me in this application are true and correct. I understand that falsifi cation of such statements and information is grounds for dismissal at any time the company becomes aware of the falsifi ed notifi cation. In consideration of my employment, I agree to conform to the rules and regulations of the company and acknowledge that my employment and compensation can be terminated, with or without cause, and with or without notice, at any time, at the option of either the company or myself. I further understand that no policy, benefi t or procedure contained in any employee handbook creates an employment contract for any period of time and no terms or conditions of employment contrary to the foregoing should be relied upon, except for those made in writing by a designated offi cer of the Company.

I agree and hereby authorize XYZ, Inc. to conduct a background inquiry to verify the in- formation on this application, other documentation that I have provided and other areas that may include prior employment, consumer credit, criminal convictions, motor vehicle and other reports. These reports may include information as to my character, work habits, per- for mance, education and experience along with reasons for termination of employment from previous employers. Further, I understand that you may be requesting information from various federal, state and other agencies which maintain rec ords concerning my past ac- tivities relating to my driving, credit, criminal, civil, and other experiences, as well as claims involving me in the fi les of insurance companies. I authorize all previous employers or other persons who have knowledge of me, or my rec ords, to release such information to XYZ, Inc. I hereby release any party or agency and XYZ, Inc. from all claims or liabilities, what ever that may arise by such disclosures or such investigation.

Date of Application Signature of Applicant

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Public Policy Principle Exception

Since the 1970s, state court decisions have limited the EAW doctrine. Spe- cifi cally, state courts have upheld employees’ rights to use legal action against their employers if an employee termination violated “public policy” princi- ples; examples include (1) if employees were pressured to commit perjury or fi x prices; (2) if employees were not permitted to perform jury duty or fi le for workers’ compensation; (3) if employees were terminated because they refused to support a merger; and (4) if employees reported alleged employer violations of statutory policy (whistle- blowing).67

Implied Contract Exception

An important 1981 California Appeals Court decision, Pugh v. See’s Candies, Inc., ruled that, in a noncontractual employment arrangement, an implied promise from the employer existed. The employer could not act arbitrarily with its employees regarding termination decisions when considering the following factors: (1) duration of employment; (2) recommendations and pro- motions received; (3) lack of direct criticism of work; (4) assurances given; and (5) the employer’s acknowledged policies.68 Other implied contract exceptions include statements in employee and personnel handbooks, manuals, guide- lines, letters off ering employment, and verbal statements made to employees regarding job security and promises of continuing employment.69

Although the EAW doctrine has undergone change, it remains the corner- stone of U.S. labor law, as is illustrated in Figure 7.3. States vary on the applica- tion of the EAW doctrine, but the U.S. Eighth Circuit Court of Appeals favored employers. The federal court has stated that it will not act as a “superpersonnel board” of a company. Figure 7.3 is a copy of a contract an employee must sign before beginning work at this reputable company in Massachusetts. It is an example of a strongly worded EAW- oriented contract.

At issue in the EAW doctrine is the continuing debate over the nature of property and property rights. Each or ga ni za tion defi nes property rights and responsibilities off ered to managers and employees, such as severance payments, pensions, stock options, access to resources, and golden parachutes. Employers also view employees’ labor, time, and eff ort as part of their property. At issue in the EAW doctrine is whether an employee’s education, skills, and other intangible assets are seen as the employee’s “property,” and if so, whether employees have certain rights regarding these assets. Due pro cess is one such right that accompanies the EAW doctrine.70

The debate will continue over whose “property” and rights take pre ce- dence, and whose are violated and on what grounds, between employer and employee, especially in disputed fi rings that do not involve clear legal viola- tions of employee rights, such as blatant discrimination. One scholar has noted that “The present- day debate revolves mainly around utilitarian issues. To what extent is the welfare of society advanced by preserving or limiting the traditional prerogatives of employers? Employers typically favor employ- ment at will not because they want to fi re without cause but because they

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would rather avoid the need to account for their personnel decisions in court and face the possibility of stiff punitive awards. Even advocates of greater employee protection recognize the dangers of the courts becoming too deeply involved in business decision making.”71

The next section presents employee rights and employer responsibilities and off ers recommendations to managers for avoiding arbitrary termination decisions.

7.3 Employee and Employer Rights and Responsibilities

Employers and employees have rights and responsibilities each should honor with respect to the other. This section discusses these mutual responsibilities, some of which stem from rights by law and legislation, while others are based on ethical principles. As discussed in Chapter 5, a values- based, stakeholder management approach views the employer– employee relationship as one grounded on mutual trust and reciprocal responsibility. Although laws and legislation serve the purpose of protection for both parties, without trust that is demonstrated in fair and equitable treatment of basic rights and responsi- bilities, one or both parties stand to lose. Nevertheless, not all employers or employees have a personal, professional, or or gan i za tion al ethic that respects the other’s rights in all situations. Historical attitudes, negative prejudices, and ste reo types sometimes surface in institutionally unjust practices toward indi- viduals and groups. On the other hand, employers must protect their property and assets against illegal and unethical practices of certain employees. When voluntary trust and mutual respect fail and harm is done to employers or em- ployees, the legal system can be evoked.

The EAW doctrine was a transition from a feudal Eu ro pe an governance context to a modern pluralistic U.S. context. Employers still control private property and proprietary rights over their intellectual property. Employees claim their constitutional rights to individual freedom, liberty, and control over their private lives. Employers try to maximize productivity and profi ts, to sustain fi nancial growth and stability, to minimize costs, to improve qual- ity, to increase market share, and to stabilize wages. Employees seek to in- crease their wages and benefi ts, to improve working conditions, to enhance mobility, and to ensure job security while demonstrating mutual respect for the value of their labor. No perfect boundary exists between employer and employee rights in a capitalist market economy.

Before discussing specifi c rights and responsibilities between employers and employees, this section begins by defi ning “rights” and two premises based on this defi nition. Then, two or ga niz ing concepts that underlie employee rights are suggested: balance and governmental rights. The concept of balance is based on utilitarian ethical reasoning and that of moral entitlement is based on Kantian nonconsequentialist reasoning. Although these concepts are not mutually ex- clusive, it is helpful to understand the logic behind them in order to argue their merits and shortcomings as they apply to specifi c workplace controversies.

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Moral Foundation of Employee Rights

The ideal relationship between employer and employees is one based on mu- tual respect and trust. Trust generally leads to open communication, which, in turn, provides an environment of collaboration and productivity. In many companies, this is, unfortunately, not the case. Power and authority relation- ships between employers and employees are, by defi nition, asymmetrical. Employees are generally, as stated by J. Rowan, in a “comparatively inferior bargaining position with respect to their employers. This inequity opens up possibilities for various sorts of exploitation, such as inadequate compensa- tion, discrimination, and privacy invasions, all of which have been known to occur.” Rowan also notes that “employee rights are complex, in that manag- ers, as a prerequisite for making ethically sound decisions, must assess which alleged employee rights are legitimate . . . and must weigh them against the rights of those in other stakeholder groups.”72

A right can be understood as a “moral claim.” A right is moral when it is not necessarily part of any conventional system, as are legal rights. A right is a claim because it corresponds with a duty on the part of the person against whom the right is held. For example, I claim that I have a right to be safe in my workplace. I hold this claim against my employer, because the employer has the duty to provide me with this safety. Under par tic u lar circumstances, my moral claim can be argued and disputed. It may not be an absolute claim.

The moral foundation for employee rights is based on the fact that employ- ees are persons. One generic right that all persons have is a right to freedom, including the concept of negative freedom (i.e., the right not to be coerced or inhibited by external forces). Regarding employees, this right to freedom is a claim “that when managers choose to hire employees, they must bear in mind that they are dealing with persons, and the (positive and negative) freedom of their employees is therefore to be respected.”73 The second generic right of employees is the right to well- being. This right follows from individuals’ hav- ing interests, which are preconditions for pursuing goals. Interests and the pur- suit of goals are morally important because they are not satisfi ed when a person does not have well- being. When employees cannot satisfy their job- related goals, interests, and requirements because of work- related conditions, an em- ployee’s right to well- being may have been violated. With regard to these ar- guments on the moral foundation of employee rights, Sanford Jacoby has noted, “Employees should at all times be treated in a way that respects them as persons.”74 We might add that the same observation holds true for employers; they also should be treated with respect as individuals.

The Principle of Balance in the Employee and Employer Social Contract and the Reality of Competitive Change

As common law and custom have evolved from the EAW doctrine to implied employee rights, employers have the opportunity to consider more than stockholder and fi nancial interests when dealing with employee stakeholders.

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As discussed in Chapter 5, a values- based stakeholder management perspec- tive views the employee– employer relationship from a win– win foundation. Both employers and employees act from a base of values. Employer- employee working relationships are enhanced when the values of the or ga ni za tion re- fl ect and align stakeholder with stockholder interests. Productivity, innova- tion, personal and professional growth are more likely to result from this type of alignment.

In a highly competitive, globalizing environment in which intellectual skills, fl exibility, and speed of work are emphasized, traditional views of com- pany own ership and employee loyalty change. Employees’ and workers’ needs can also be diminished in polarizing po liti cal climates where governmental bodies and co ali tions funded by interest groups seek to implement special demands. The evolving social contract between employers and employees still recognizes employers’ power over their physical and material property, but the contractual relationship between employer and employee aims in principle at balance, mutual respect, integrity, and fairness. The employer’s business inter- est can and should be balanced against the employee’s welfare, interests, and willing contribution to add value. In the early twenty- fi rst century, small- and mid- sized employers are also pressured to balance global economic demands and tighter profi t margins with employee interests. Larger fi rms continue to reduce their workforce and cut costs through outsourcing and off shoring, as discussed earlier in the text. Although employers generally have more power than employees in the contractual relationship, employees in the United States, for example, are still citizens under the protection of the Constitu- tion. Employees must also balance their self- interests and motivations with the need of the or ga ni za tion to succeed, which is necessary for the or ga ni za- tion to provide employment.

It is interesting to note that the principle of balance in the employer–em- ployee relationship has been historically prevalent in some of the developed Asian countries, such as Japan, South Korea, Singapore, and Taiwan. In Japan, in par tic u lar, the Confucian tradition of harmony has underscored the coop- erative relationship between unions and companies.75 Eu ro pe an countries, including Germany and France, have also enacted laws that protect employee benefi ts and welfare. Some of these countries have traditions that include so- cialism and strong populist social policies. Some of these traditions and prac- tices are also beginning to change under the competitive pressures of economic downturns, the use of information technology, and global competition. For example, lifelong employment in many Japa nese companies is no longer guar- anteed. Off shoring and outsourcing are now practiced at Sony, Matsushita, and Toshiba, to mention just a few fi rms.76

Rights from Government Legislation

Employee rights are based on principles determined by law. Certain govern- ment rights (federal, state, and local) of the employee are not negotiable in written or implied contracts, for example, rights related to the minimum wage; sexual harassment; discrimination based on race, creed, age, national

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origin, gender, or disability; and the right to assemble. Although employee rights based on certain legislation are not always negotiated according to employer– employee self- interests, these rights can be disputed, depending on circumstances. Reverse discrimination, to be discussed later, is one such example. Although private corporations are the property of the own ers, certain employee legal rights are still within a corporation’s boundaries. (Refer back to Chapter 2 for a discussion of diff erent classifi cations of moral rights.)

Employer Responsibilities to Employees

Employers are obliged to pay employees fair wages for work performed and to provide safe working conditions. Review and answer the questions in the box entitled, “Who Has Rights in this Situation?” After you have answered and discussed the questions, what, if anything, did you learn about your and other classmates’ values and beliefs regarding employee– employer responsibilities, obligations, and rights?

Fair Wages Fair wages are determined by factors such as what the public and society sup- port and expect, conditions of the labor market, competitive industry wages in the specifi c location, the fi rm’s profi tability, the nature of the job and work, laws governing minimum wages, comparable salaries, and the fairness of the salary or wage negotiations.77 As we will see later in this chapter, fair wages for comparable jobs held by men and women are not always paid.

Full- time working women had median weekly earnings of $713, or 82% of the $869 median for men. Full- time working black men earned a median weekly wage of $646 per week, or 72.1% of the median for white men ($896). Full-time working black women earned a median weekly wage of $621, or 85.3% of those for white women ($728). Median earnings of full- time em- ployed Hispanics was $576— lower than those of blacks ($632), whites ($813), and Asians ($916).78

Based on The Institute for Women’s Policy Research wage gap fact sheet, “If the pace of change in the annual earnings ratio continues at the same rate as it has since 1960, it will take another 45 years, until 2058, for men and women to reach parity.”79

Who Has Rights in This Situation?

Aparna Jairam (a high- tech employee in India) isn’t trying to steal your job (you’re a high- tech U.S. employee). That’s what she tells me, and I believe her. But if Jairam does end up taking it— and, let’s face facts, she could do your $70,000- a-year (U.S.) job for the wages of a Taco Bell counter- jockey—

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Safe Working Environment Employers also are obliged to provide workers with a safe working envi- ronment and safe working conditions. The Occupational Safety and Health Administration (OSHA) and federal laws and regulations provide safety standards and enforce employer institution of the company’s own safety stan- dards. The problems of employers providing— and of employees accepting— safe working environments stem from: (1) lack of knowledge and of available, reliable information about levels of health risks; (2) lack of appropriate com- pensation proportional to the level of occupational risk; and (3) employees accepting known risks when the employer does not off er any safer alterna- tives. When the option is employment versus no employment, workers, es- pecially in low- income, noncompetitive employment regions, often choose jobs with hazardous risks to their health or life. Employees have a right to know about unsafe working conditions, as we also discuss later in the chapter.

Employers should pay competitive wages commensurate with the occu- pational risks associated with a profession, job, or work setting. For example, race car drivers would not be expected to receive the same pay as college professors. Employers also are expected to provide full information on the risks and health hazards related to the work, products, and working environ- ments to all employees exposed to those risks. Finally, employers also should off er health insurance programs and benefi ts to employees exposed to work- place hazards. Not all employers, especially with recent economic conditions, meet these obligations. Employers who cannot provide health and protection

she won’t lose any sleep over your plight. When I ask what her advice is for a beleaguered American programmer afraid of being pulled under by the global tide that she represents, Jairam takes the high road, neither dismissing the concern nor offering soothing happy talk. Instead, she recites a portion of the 2,000- year- old epic poem and Hindu holy book, the Bhagavad Gita: “Do what you’re supposed to do. And don’t worry about the fruits. They’ll come on their own.”

QUESTIONS

1. Do you agree with Aparna? Why or why not? Please explain. 2. On what, if any, ethical grounds could you either justify or reject her

assessment? Explain.

SOURCE

Pink, D. (February 2004). The new face of the silicon age. Wired Magazine, 12(2). http:// www .wired .com /wired /archive /12 .02 /india .html, accessed January 8, 2014.

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of employees in high risk, potentially unsafe environments should not be in that business.

Many companies are proactive in developing standards and monitoring for safe working conditions. Apple, for example, announced in February 2012 that it would audit the working conditions at its overseas factories and make the fi ndings public, through the Fair Labor Association. The company has made a public commitment to hold its supply chain accountable for appro- priate, safe working conditions. “Apple has said that if the companies manu- facturing its products do not mea sure up to its labor and human rights standards, it will stop working with them.” Apple, like many manufacturers, has not been immune to incidents with unsafe working conditions. Company reports indicate previous instances of “excessive overtime, underage workers, improperly disposed hazardous waste and falsifi ed rec ords.” In 2010, “137 workers at an Apple supplier in eastern China were injured after they were ordered to use a poisonous chemical to clean iPhone screens.” In 2011, “two explosions at iPad factories killed four people and injured 77.” It is expected that there will be repercussions across the electronics industry, as Apple is an industry leader and many of the suppliers are used by multiple companies within the industry. Apple was the “fi rst technology company to join the Fair Labor Association,” joining in January of 2012.80

Working Conditions that Empower Employees Although employers are not required by law to off er employees working con- ditions that provide meaningful tasks and job satisfaction, doing so can lead to increased per for mance, job satisfaction, and productivity. Employees work most productively when they can participate in the control of their tasks, when they are given responsibility for and autonomy over their assignments, and when they are treated with respect.81 Quality of work life (QWL) programs that have provided employees with more autonomy, participation, satisfaction, and control in their work tasks have demonstrated positive results.82 Many com- panies that have or ga nized self- designing work teams, quality circles, and learning communities to tap into employee creativity and abilities have also provided opportunities for innovation. As noted in Chapter 5, there is an in- crease in companies off ering opportunities for employees to practice their own religious and spiritual rituals during the work day. Employers and employees both gain when personal and or gan i za tion al needs are met. Working environ- ments that can provide conditions for this alignment are increasing in order to attract and retain talent.

Employee Rights and Responsibilities to Employers

Employees are responsible for fulfi lling their contracted obligations to the corporation; for following the goals, procedural rules, and work plans of the or ga ni za tion; for off ering competence commensurate with the work and job assignments; and for performing productively according to the required tasks. Other responsibilities include timeliness, avoiding absenteeism, acting legally and morally in the workplace and while on job assignments, and respecting the intellectual and private property rights of the employer.

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Employee Rights in the Workplace

Labor, along with money and materials, is considered capital in a free- market system. However, labor is not the same as materials and money; labor also means human beings who have general constitutional rights that should not be relinquished between working hours.83 Yet, clashes of interests and of stakes between employee rights and management demands frequently occur. The boundary between an employer’s private property and an employee’s indi- vidual rights is often blurred in everyday experience. Understanding em- ployee rights is part legal and part ethical because these rights must be viewed and interpreted within corporate policy, procedures, and par tic u lar circum- stances. In some instances, there are clear violations of an employee’s rights; other times there are “gray,” or uncertain, areas. When employees and employ- ers cannot agree on whose rights are seriously violated, third- party negotiation, arbitration, and even settlement may be required. This section presents major types of employee rights in the workplace:

• The right not to be terminated without just cause. • The right to due pro cess. • The right to privacy. • The right to know. • The right to workplace health and safety. • The right to or ga nize and strike. • Rights regarding plant closings.

These rights become even more important in a society that rapidly trans- forms technological and scientifi c inventions into part of the human work- place environment.

Just Cause Termination A basic principle in disciplinary termination cases is that the employer must have “ just cause” for imposing the action. A test for determining whether there is “ just cause” was developed by Arbitrator Daugherty in the celebrated Enterprise Wire case (46 LA 359, 1966 and 50 LA 83). An absolute “no” answer to any one or more questions in this guideline indicates that the employer’s action was “arbitrary, capricious and/or discriminatory in one or more re- spects, thereby signifying an abuse of managerial discretion and allowing the arbitrator to substitute his judgment for that of the employer.”

1. Was the employee adequately warned of the consequences of his conduct? 2. Was the employer’s rule or order reasonably related to effi cient and safe

operations? 3. Did management investigate before administering the discipline? 4. Was the investigation fair and objective? 5. Did the investigation produce substantial evidence or proof of guilt? 6. Were the rules, orders, and penalties applied evenhandedly and without

discrimination to all employees? 7. Was the penalty reasonably related to the seriousness of the off ense and

the past record?84

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As a principle, it also has been argued that workers should have three rights regarding work to maintain self- respect:

• The right to employment. • The right to equal opportunity. • The right to participate in job- related decisions.85

These rights are less entitlements than goals and depend on market con- ditions. Just cause termination is problematic when other forms of employer discrimination are determined, such as discrimination in age, gender, disabil- ity, race, national origin, and other Title VII areas. For example, an Ohio jury awarded a 68- year- old woman $30.6 million in an age discrimination lawsuit after a jury ruled that the company violated her rights by refusing to give her another job within the company when it terminated her from her manage- ment position.86

Due Pro cess Due pro cess is one of the most important underlying rights employees have in the workplace because it aff ects most of their other rights. Due pro cess refers to the right to have an impartial and fair hearing regarding employers’ deci- sions, procedures, and rules that aff ect employees. As applied in the workplace, due pro cess essentially refers to grievance procedures.

At a more general level, due pro cess rights protect employees from arbi- trary and illegitimate uses of power. These rights are based on the Fifth and Fourteenth Amendments of the Constitution, which state that no person shall be deprived of “life, liberty, or property, without the due pro cess of law.”

Patricia Werhane states that the following corporate procedural mecha- nisms are needed to ensure employees’ right to due pro cess:87

• Right to a public hearing. • Right to have peer evaluations. • Right to obtain external arbitration. • Right to an open, mutually approved grievance procedure.

The right to due pro cess applies to other employee rights, such as those in- volving privacy; safety and health; safe working environments; holding meetings and gatherings; and hiring, fi ring, and other human resource decisions.

Right to Privacy Employees’ right to privacy remains one of the most debated and controver- sial rights. It raises these questions: Where does the employer’s control over employee behavior, space, time, and property begin and end? What freedoms and liberties do employees have with employer property rights? What rights do employers have to protect their private property, earnings, and costs from employees? The U.S. Constitution does not actually refer to a person’s right to privacy; the working defi nition of employees’ right to privacy has come to

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mean “to be left alone.” Privacy in the workplace also can refer to employees’ right to autonomy and to determine “when, how, and to what extent infor- mation about them is communicated to others.”88 The extent of an employee’s privacy in the workplace remains an unsettled area of controversy. The defi - nition of what constitutes an employee’s privacy is still somewhat problem- atic, including the notion of psychological privacy (involving an employee’s inner life) and the notion of physical privacy (involving an employee’s space and time).89 In the 1965 Griswold v. Connecticut case, the Supreme Court ruled that the Constitution guarantees individuals a “zone of privacy” around them into which the government cannot intrude. Proponents of this defi ni- tion argue that this zone includes personnel rec ords and fi les and protection against polygraph and psychological testing and surveillance in the workplace. The ruling also is intended to protect employees in their after- work activi- ties; their need for peace and quiet in the workplace; their dress, manners, and grooming; and their personal property in the workplace. Identifying this “zone of privacy” has proved complicated, especially in cyberspace and the use of technological surveillance.

Technology and Employee Privacy Although employee privacy rights remain largely undefi ned regarding uses and abuses of emerging technologies in the workplace, the following main types of court- upheld privacy violations and permissible employee privacy inquiries can serve as guidelines. Court- upheld privacy violations include:

1. Intrusion (locker room and bathroom surveillance). 2. Publication of private matters. 3. Disclosure of medical rec ords. 4. Appropriation of an employee’s name for commercial uses. 5. Eavesdropping on employee conversations and retrieving or accessing

employee e-mail (if unauthorized).

Permissible employee privacy inquiries include:

1. Criminal history inquiries. 2. Credit history inquiries. 3. Access to medical rec ords.90

Confl icts of Interest Employee responsibilities to employers become complicated when confl icts of interest appear; that is, when an employee’s private interests compete or are not aligned with the company’s interests. More obvious confl icts of interest arise in a number of situations, such as taking or off ering commer- cial or personal bribes, kickbacks, gifts, and insider information for per- sonal gain.

The so- called gray areas are more problematic for determining whose interests are violated at the expense of others. For example, an employee quits a fi rm, joins a competitor, and then is accused by the former employer of

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stealing proprietary property (i.e., passing on intellectual property, sharing trade secrets, or off ering a competitive advantage by divulging confi dential information). Whose interests are violated?91 Some courts have used a “bal- ancing model” based on utilitarian logic to resolve trade- secret- protection cases; that is, an employee’s interest in mobility and opportunity is weighed against the employer’s right to decide the extent of protection given to confi - dential information. For example, the following three criteria have been used to decide whether trade secrets have been divulged by employees:

1. True trade secrecy and established own ership must be shown. 2. A trade secret must have been disclosed by an employee, thus breaching a

duty of confi dentiality. 3. The employer’s interest in keeping the secret must outweigh the

employee’s interest in using the secret to earn a living and the public’s interest in having the secret transmitted.

Courts also use other considerations in these types of rulings (for example, contract obligations, promises made, truthfulness, confi dentiality, and loy- alty). The point here is that as technology and expertise become more sophis- ticated and as employee mobility— and downsizing— increase, workplace and courtroom criteria regarding the proof of confl ict of interest also grow more complicated. Although a utilitarian model is used to help determine confl ict- of- interest court cases, such as trade secrecy, ethical principles such as rights, duty, and justice also remain essential considerations for determining right and wrong; violations of loyalty, confi dentiality, or truthfulness; and harm done to either employers or employees.

Other Employee Rights and Obligations to Employers

Polygraph and Psychological Testing Employers are particularly concerned about employee privacy rights regard- ing testing. Polygraph and psychological testing, and other related techniques that many managers would like to use to prevent and detect crime in the workplace, may constitute a violation of employee rights. Workplace theft has been estimated by the U.S. Department of Commerce to cost in excess of $40 billion a year in the United States.92 Here are some of the issues surrounding the use of polygraphs and psychological testing:

1. These tests are not reliable or valid; they are only indicators. 2. The tests, to some extent, can be manipulated and infl uenced by the

operators. 3. The tests may include irrelevant questions (such as those pertaining to

gender, lifestyle, religion, and after- work activities) that invade a person’s privacy.

4. Employees do not have control over the test results or how the information is used.

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Researchers in the fi eld of honesty testing have concluded that only 1.7% (at worst) to 13.6% (at best) of such tests are accurate.93

Workplace Surveillance Surveillance of employees at work (that is, employers using technology to spy on and invade workers’ privacy) is also a subject of concern. Software pro- grams are used to monitor workers who use computer terminals.94 Although there are pros and cons of surveillance videos in the workplace, as Ethical Insight 7.2 shows, there are no clear- cut answers as to whether or not to use such equipment to monitor employee per for mance. Employers can detect the speed of employees’ work, number and length of phone calls made and re- ceived, breaks taken, when machines are in use, and so on. Although some form of work- related monitoring is certainly legal and even necessary, the ethical issues that the American Civil Liberties Union (ACLU) raise are the possible invasion of employee privacy and fair treatment. What type of infor- mation does an employer have a right to, and what eff ects do stress and anxiety from monitoring have on employee welfare? The Electronic Communications Privacy Act renders electronic eavesdropping through computer- to- computer transmissions, private videoconferences, and cellular phones illegal.

A study released by the Society for Human Resource Management, a trade association in Alexandria, Virginia, showed that 80% of the organizations in the study used e-mail. Only 36% of those groups had policies concerning e-mail use and only 32% had written privacy policies. The issue of individual employee privacy remains somewhat undefi ned in the workplace.95

Ethical Insight 7.2

Pros and Cons of Employers Using Video Surveillance

Pros Cons Increased safety: Improves the security

of employers and employees. Theft deterrent: Saves companies by

preventing stolen products. Prompts good behavior: Monitoring can

encourage productive behavior.

Potential invasion of privacy: Camera installation in improper locations and video footage monitored and stored inappropriately presents liability for invasion of privacy claims and costly legal actions.

Provides evidence of a crime: Proof of stolen goods can be provided with electronic monitoring.

Can provide false sense of security. Lowers morale: Can promote a lack of

trust, negatively aff ecting an employee’s work per for mance.

Questions 1. How would electronic video surveillance affect you and your per for mance in

the workplace? 2. Can you identify with an employer’s need and justifi cation for this equipment?

Explain.

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456 Business Ethics

3. What other means of monitoring employee per for mance would you recom- mend and why?

Source: Bryant, Lynn. (October 12, 2006). What are the pros and cons of monitoring employees using video surveillance? http:// www .video -surveillance -guide .com /monitoring -employees -using -video -surveillance .htm, accessed February 3, 2014.

Internet Use in the Workplace This is another undefi ned area regarding employee use of technology that requires the employer’s development of “appropriate use policies” (AUPs). The use of the Internet for personal reasons has become a signifi cant source of wasted time and productivity loss for many companies. Social media is a particularly tricky culprit— many companies have turned to social media for advertising and communication among employees; however, the temptation and access to the Internet for personal reasons is great. “An April 2010 study by managed security ser vices company Network Box shows employees visit Facebook on the job more than any other web site. Facebook usage is double that of the next most pop u lar site, Google. A 2009 Deloitte LLP study showed nearly 40 percent of employees never take into consideration what their em- ployers would think about their social media site postings.”96

A poll taken by eMarketer in 2014 found that nine in ten U.S. companies will use social media for marketing purposes in 2014 to promote their brand- ing. A growing number of companies also have social media policies in place for employees as well as for marketing and other operational purposes.97 Such policies can help mitigate risks. Consider the following example: “let’s say a manager at a Fortune 500 company posted a disparaging Facebook comment about one of his clients. His boss saw the comment and asked him to remove it, but it was too late. Someone forwarded the comment to the client, and the company lost a huge piece of business and took a serious blow to its reputa- tion. The person who posted the comment also lost his job.”98

Companies must fi nd the appropriate balance of Internet use for personal and professional reasons, as the Internet (particularly social media) is such an integrated part of the lives of employees and can have many benefi ts to the company. AUPs are a good start.

Jo Tucker, head of labor and employment practices at Morrison and Foer- ster, a law fi rm based in Irvine, California, stated that “if a worker is using a computer in a company offi ce, on company time, privacy is what the employer says it is.”99 Without AUPs, Internet use in the workplace remains a guess- ing game between employer and employee. An employee Internet use policy depends on the company, its corporate culture, and the nature of its business. The policy must have the involvement and endorsement of top- level leader- ship. Monitoring capability, with employee awareness, must also accompany the policy. As J. Martin states, “A clear AUP policy eff ectively removes em- ployee expectations of privacy on the Internet, eliminating potential law- suits.”100 All use policies should also be spelled out clearly with no ambiguities and with simple, easy, enforceable rules. Part of such a policy involves the

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7 Employee Stakeholders and the Corporation 457

security of data for the entire company, because the reputation of the system and violations of it involve not only employees but also all stakeholders. A policy on Internet use can help companies in the following ways: (1) save em- ployee work time; (2) prevent tying up phone lines and computer disk space that could be used for vital company business; (3) prevent exposing sensitive company data stored on computers to outside attack; and (4) prevent creations of conditions that enable employee harassment of each other and, ultimately, of the company.

Guidelines off ered to employers regarding employee privacy include:

• Inform employees not to assume privacy in the workplace. • Require employees to acknowledge the company’s privacy policy in

writing. • Use private information only for legitimate purposes. • Limit access to private information about employees to only those with a

need to know. • Secure employee medical rec ords separately from other personnel fi les. • Obtain signed permission releases and waivers before using an employee’s

name or photograph in any commercial advertisement, promotional material, or training fi lm.101

Dating in the Workplace As employees spend more time in the workplace, it is not uncommon for attraction and dating to occur. An annual survey of workplace romance noted that, in 2010, 60% of workers claimed to be involved in workplace romance. This is an issue that aff ects all employees, not just those engaging in the rela- tionships. For example, the survey also revealed that “53.2% of those surveyed say they’ve known a married co- worker who had an offi ce aff air, and 40.4% say they’re acquainted with a married or committed co- worker who’s had a romantic liaison while on a company business trip.”102 More recently, a 2013 poll taken by work– life and benefi ts con sul tants Workplace Options reported that 84% of 18- to- 29 year olds said they’d date a coworker, versus 36% of Gen X-ers (ages 30– 45) and only 29% of Boomers (ages 45– 65). Three- quarters of Millennials (71%) “see a workplace romance as having positive eff ects such as improved per for mance and morale. Also, 40% of millennials would engage in a relationship with a boss, versus just 12% of older employees.”103 Issues leading to liability and ethical dilemmas can arise whenever problems in the dating relationships occur, especially when one party is more powerful and demand favors from the other. Gossip, accusations, and even sexual harass- ment complaints can and do occur. The guidelines off ered in Figure 7.4 can help protect both employers and employees.

Drug Testing and Privacy Rights Privacy is also an issue in drug testing. Advocates for employee drug testing argue that company health costs and costs associated with sick and lost (non- productive) days are aff ected when employees contract serious diseases, such

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458 Business Ethics

as AIDS, or suff er from drug and alcohol addiction. Also, in industries (such as the airline industry or nuclear plant operations) where drug abuse can cost the lives of innocent people, screening drug abusers is viewed as in the public interest. Those who oppose forced employee drug testing argue that the practice violates employees’ rights to due pro cess and privacy.

The following guidelines can be used by companies for policy develop- ment in drug- testing programs:104

1. Tests should be administered only for jobs that have a clear and present potential to cause harm to others.

2. Procedural testing limitations should include previous notice to those being tested.

3. Employees tested should be notifi ed of the results. 4. Employees tested should be informed that they are entitled to appeal the

results. 5. The employer should demonstrate how the information will be kept

confi dential (or destroyed).

Four steps managers can take to develop corporate policy guidelines to prepare for privacy regulation in general are:105

1. Prepare a “privacy impact statement.” An analysis of potential privacy implications should be part of all proposals for new and expanded systems.

2. Construct a comprehensive privacy plan. The privacy impact statement provides the input for planning; the plan specifi es all that has to be achieved.

3. Train employees who handle personal information. Make employees aware of protecting privacy and of the par tic u lar policies and procedures that should be followed.

4. Make privacy part of social responsibility programs. Keep or gan i za tion al members informed about company plans regarding privacy issues, with or without regulatory pressures.106

Figure 7.4

Quick Tips for Offi ce Romance

• Find out if the company has a policy on dating; if not, check in with Human Resources or the legal/professional department

• Be professional and maintain your dignity • Stay away from those in higher and lower positions; power differences add complexity

to an already possibly gray area • Date someone outside your work/offi ce area if possible • Discuss and confront personal issues after working hours and off-site • Plan for the worst • If relationship- related issues get too complicated, think about leaving

Source: Adapted from Doyle, Alison. (n.d.). How to handle an offi ce romance: Tips for handling offi ce relationships. About.com. http:// jobsearch .about .com /od /careerdevelopment /a /offi ce -romance .htm, accessed March 4, 2014.

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Ge ne tic Discrimination Should employers perform DNA testing on employees when several areas of discrimination could surface? Two examples are: (1) employment based on a person’s predisposition to a disease could negatively and unfairly aff ect hiring, fi ring, and benefi ts; and (2) insurance companies that could obtain an employ- ee’s ge ne tic information would also be able to deny a person certain benefi ts.

The following lawsuit is the fi rst initiated by the Equal Employment Op- portunity Commission (EEOC) to eff ectively enforce the Ge ne tic Informa- tion Nondiscrimination Act (GINA) of 2008. This case and another (against Burlington Northern Santa Fe Railway Company in Fort Worth, Texas, also for carpal tunnel syndrome, in April 2001) emphasize the integral relation- ship between conduct prohibited under GINA and conduct prohibited under the Americans with Disabilities Act of 1990 as amended (42 U.S.C. §12101 et seq., Pub. L. 101- 336). GINA Title II prohibits both the acquisition and the use of ge ne tic information in employment contexts.

More recently, the case of Rhonda Jones empowered the enforcement of EEOC policy toward ge ne tic discrimination. Jones was temporary memo clerk for Fabricut, Inc. Her temporary employment was running out when she applied for a permanent position. The company at fi rst off ered her the position before violating the GINA Title II law when, as part of its pre- employment medical examination, it allegedly requested Rhonda Jones’ fam- ily history with regard to several specifi c conditions. “GINA defi nes ‘ge ne tic information’ broadly to include family medical history.”107 Based on the pre- employment medical examination, Fabricut allegedly “required Jones to ob- tain additional testing to rule out carpal tunnel syndrome (CTS).” Even though later testing did rule out CTS, information she gave the company, Fabricut allegedly withdrew their job off er “on the basis of the pre- employment medical examination and its view that she had CTS.” As part of the consent decree settling the case, Fabricut agreed to pay $50,000 in damages. The com- pany also agreed to undertake corrective actions that include posting a non- discrimination notice to employees. GINA requires that employers post a non- discrimination notice, and “Equal Employment Opportunity is the Law” posters are readily available on the EEOC Web site. Fabricut also agreed to have its employees responsible for hiring decisions undergo non- discrimination training and further agreed to distribute non- discrimination policies to its employees.108

The Right to Know and Workplace Health and Safety Every employee is entitled to a safe, healthy workplace environment, because one in 10 employees in private industry suff ers from an industrial accident or disease while working. Information about unsafe, hazardous workplace con- ditions and some form of protection from these hazards are needed.109 Em- ployees have a right to know the nature and extent of hazardous risks to which they are exposed, and to be informed and trained about and protected from those risks. Right- to- know laws have been passed in 20 states since the mid- 1980s.110

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OSHA is the federal agency responsible for researching, identifying, and determining workplace health hazards; setting safety and health standards; and enforcing the standards. These remain major tasks. Critics of OSHA claim they are too overwhelming for one agency to monitor and execute eff ectively. The missions and bud gets of government regulatory agencies— including OSHA— are also a function of the politics of the governing administration and Congress.

Smoking in the Workplace Legislation has, or is projected to, ban smoking in public places including workplaces in several countries including the United States.111 Among stake- holders who have argued and lobbied against smoking in the workplace are the Environmental Protection Agency (EPA), OSHA, and Action on Smoking and Health (ASH)— the powerful national antismoking group. Prosmoking advocates include the tobacco industry and its lobbying group, the Tobacco Institute, and the Bakery, Confectionery, and Tobacco Workers union. OSHA has not been able to place an absolute ban on smoking in all workplaces to date, even though tobacco has been shown to be one of the leading causes of death. The issue refl ects societal habits and attitudes and the politics and eco- nomics of the industry.112

Consider these facts: It is estimated that 22% of adult men and 18% of adult women in America were regular smokers in 2010. Approximately 80% of workers are protected to some extent by a workplace policy, and nearly half of all indoor workers are employed in smoke- free workplaces. Twenty states and the District of Columbia have laws that restrict smoking in private- sector workplaces.113 The American Nonsmokers’ Rights Foundation stated that 81.3% of the U.S. population, as of April 2013, currently resides under a ban on smoking in “workplaces, and/or restaurants, and/or bars, by either a state, commonwealth, or local law.” Almost 75% of 1,794 facility managers in a survey claim they ban or segregate smoking in their workplaces.114

One of OSHA’s strategies has been to link smoking in the workplace to indoor air- quality problems and pollution and to legislate against it. The Clean Air Act is one such move to further restrict indoor smoking in public facilities. Employers need to keep track of laws and regulations that aff ect employee rights regarding smoking in the workplace.115 Still, a bigger issue in the battle between state and federal governments and tobacco companies, at the time of writing, is over electronic cigarettes that deliver nicotine in the form of water vapor and come in diff erent fl avors. The big questions are: Who should be able to use the product? How should the product be taxed? And what, ex- actly, is it in the fi rst place?116

The Right to Or ga nize and Form Unions Workers have a right to or ga nize, just as own ers and managers do. Individu- als, as workers and citizens, have the right of free association to seek common ends. This also means employees have a right to form unions. Although unions have a right to exist, they have no special rights beyond those due organiza- tions with legal status.117

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Plant Closings and Employee Rights Companies have the right to relocate and transfer operations to any place they choose. If fi rms can fi nd cheaper labor, raw materials, and transportation costs; lower taxes; no unions; and other business advantages for making a profi t elsewhere, they often close plants and move. Companies also close plants because of loss of competitiveness, fi nancial losses, and other legitimate eco- nomic reasons. The ethical questions posed to corporate managers regarding plant closings are: What rights do the employees who are aff ected by the clos- ing have? What responsibilities does the company have toward the aff ected communities, and even toward the national economy?

Since August 1988, companies with more than 100 employees must by law give 60 days’ notice to workers before closing. Employees also have moral rights— to be treated fairly, equally, and with justice— when companies de- cide to relocate or close. Employees have the right to be compensated for the costs of retraining, transferring, and relocating; they have rights to severance pay and to outplacement and support programs that assist them in fi nding alternative employment; and they have the right to have their pension, health, and retirement plans honored.118

Employees also should be given the right to fi nd a new own er for the plant and to explore the possibility of employee own ership of the plant before it is closed.119 These rights extend beyond workers and include the welfare of the communities where the plant operates. Plant closings aff ect jobs, careers, fam- ilies, and the local tax base, and can even negatively aff ect the regional and national economies, when sizable operations are shut down or moved abroad.

What ever the motivations for corporate closings or transfer of facilities, the rights of employees and local community groups stand, even though these rights are often negotiated against the utilitarian interests of corporations in specifi c economic contexts. As mentioned earlier, with globalization and in- creased pressures on corporate profi ts, plant closings have become almost com- monplace. Responsible employers keep employees informed of planned facility closings.120

The Family and Medical Leave Act The Family and Medical Leave Act (FMLA) was enacted into law in 1993, eight years after it was introduced in Congress by Christopher Dodd, William Clay, and Patricia Schroeder. The fi nal rules were established in 1995. The FMLA entitles eligible employees to a maximum of 12 weeks of unpaid leave per year for the birth or adoption of a child; to care for a spouse or immedi- ate family member with a serious health condition; or when an employee is unable to work because of personal illness. The 12 weeks need not be used consecutively because intermittent leave or reduced work schedules are al- lowed under the act. To be considered eligible, an employee must have been employed for a continuous 12- month period and for at least 1,250 hours dur- ing the year preceding the leave.

Companies that employ at least 50 people within a 75- mile radius are man- dated to off er such leave. The employer is required to maintain any preexisting

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health coverage during the leave. Once the leave is concluded, the employee must be reinstated to the same position or an equivalent job. An equivalent position must have the same pay, benefi ts, working conditions, authority, and responsibilities.

Employers have the right to request a 30- day advance notice for foresee- able absences and may require employees to present evidence to support medically necessary leave. Employers may request employees to obtain a sec- ond medical opinion at the employer’s expense. Employers may deny rein- statement of employment to “key employees.” Such employees must be among the 10% highest paid company employees, and their absence must have a serious economic impact on their or ga ni za tion. It is the duty of em- ployers to inform employees of their status as “key employees” when they request a leave.

Major problems with the FMLA, from employees’ experience, have been serious illnesses (e.g., Price v. City of Fort Wayne); from employers’ perspective, rising health and company costs; and from government’s viewpoint, admin- istrative requirements (e.g., Viereck v. City of Gloucester City). Employers often unintentionally violate the sometimes confusing and contradictory FMLA.121 The courts have also tended to rule in favor of employees who have less seri- ous and even minor illnesses. Finally, based on a seven- year study of more than 7,500 adults, it was found that the burden of not having a national or state- by- state family paid leave policy falls heaviest on the middle class and the working poor. Although 40% of Americans in the top quartile of income lacked a sick- leave policy at work, 54% of Americans in the second quartile, 63% in the third quartile, and 76% of workers in the bottom quartile lacked sick leave.122 The Department of Labor’s recent survey titled Family and Medi- cal Leave Act in 2012: Final Report shows that FMLA “continues to make a positive impact on the lives of workers without imposing an undue burden upon employers and employers and employees alike fi nd it relatively easy to comply with the law.” More information is available on the “Wage and Hour Division” page of the U.S. Department of Labor web site ( http:// www .dol .gov /whd /fmla /).

7.4 Discrimination, Equal Employment Opportunity, and Affi rmative Action

It is diffi cult to imagine that throughout most of the nineteenth century, women in America could not vote, serve on juries, issue lawsuits in their own name, or initiate legal contracts if they lost their property to their husbands. In an 1873 Supreme Court decision, Bradwell v. Illinois, a woman had “no legal existence, separate from her husband, who was regarded as her head and rep- resentative in the social state.”123

It is also diffi cult to imagine the legal status of black people in the United States in 1857. In the Dred Scott case, one of the opinions of the Supreme

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Court considered blacks as “beings of an inferior order . . . and so far inferior that they had no rights that the white man was bound to respect.”124

More recently, discrimination has surfaced in a number of categories. Ra- cial profi ling remains an issue. Black individuals are more likely to be stopped and arrested by police than whites. Income disparities between whites and minorities continue to rise. Median wage diff erences and annual pay among black, white, and Hispanic men, women, and families were discussed earlier in this chapter. It is against this background that the doctrines, laws, and policies of discrimination, equal opportunity, and affi rmative action must be considered.

Discrimination

Discriminatory practices in employer– employee relationships include unequal or disparate treatment of individuals and groups.125 Unequal or preferential treatment is based on irrelevant criteria, such as gender, race, color, religion, national origin, or disability. Systematic and systemic discrimination is based on historical and institutionally ingrained unequal and disparate treatment against minorities, the disadvantaged, and women.

Examples of contemporary and systemic discrimination in employer– employee relationships are found in practices such as recruitment, screening, promotion, termination, conditions of employment, and discharge.126 These practices are attributed to closed employment systems and practices resulting from se niority systems, “old boy networks,” and arbitrary job classifi cations. Recruiting procedures that are biased toward certain groups and that do not openly advertise to minority groups are discriminatory. Screening practices that exclude certain groups and that use biased tests or qualifi cations are dis- criminatory. Promotion procedures that have “glass ceilings” (i.e., invisible discriminatory barriers to advancement) for women and minority groups are discriminatory.127 Se niority tracks that favor white males or other groups over minorities or women are discriminatory. Terminating employees on the basis of sex, age, race, or national origin is discriminatory.

Equal Employment Opportunity and the Civil Rights Act

Title VII of the Civil Rights Act of 1964 makes discrimination on the basis of gender, race, color, religion, or national origin in any term, condition, or privilege of employment illegal. The law prohibits discrimination in hiring, classifying, referring, assigning, promoting, training, retraining, conducting apprenticeships, fi ring, and dispensing wages and fringe benefi ts. The Civil Rights Act also created the Equal Employment Opportunity Commission (EEOC) as the administrative and implementation agency to investigate com- plaints that individuals submit. The EEOC negotiates and works with the Department of Justice regarding complaints; however, the EEOC cannot en- force the law except through grievances.

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The Civil Rights Act of 1991 extended, for the fi rst time, punitive dam- ages to victims of employment discrimination. This law states that job bias on the basis of gender, disability, religion, or national origin will be punished as severely as job discrimination based on race. It also makes it easier for job- bias plaintiff s to win lawsuits. This legislation shifts the legal burden of proof to the employer, who must defend any intentional or unintentional employ- ment bias, especially if the practice in question has a “disparate impact” on minorities or women. Under this law, the employer must demonstrate that the alleged discriminatory act is “ job- related for the position in question and consistent with business necessity.”128 “Job- related” and “business necessity” are undefi ned and are determined by the courts. The act specifi es that em- ployers with more than 500 employees could be liable for up to $300,000 in compensatory and punitive damages. Smaller companies are liable for less, depending on the number of workers they employ.

The Equal Employment Opportunity Act of 1972 amended the 1964 act to empower the EEOC to enforce the law by fi ling grievances from indi- viduals, job applicants, and employees in the courts. All private employers with 15 or more employees fall under the jurisdiction of the revised act, with the exception of bona fi de tax- exempt private clubs. All private and public educational institutions and employment agencies are covered by the law. Labor unions (local, national, and international) with 15 or more members are included. Joint labor- management committees that adminis- ter apprenticeship, training, and retraining programs are also under this law’s jurisdiction.

There were 71,914 charges fi led through Title VII in 2011, which resulted in recovery of $247.8 million in monetary benefi ts to workers who had been discriminated against.129

Age and Discrimination in the Workplace

The Age Discrimination in Employment Act (ADEA) of 1967, revised in 1978, prohibits employers from discriminating against individuals based on their age (between ages 40 and 70) in hiring, promotions, terminations, and other employment practices. In 1987, ADEA again was amended when Con- gress banned any fi xed retirement age. The EEOC also issued a fi nal rule in 2001 that aimed at prohibiting contracts requiring terminated employees to give back severance benefi ts if they challenged their terminations under the ADEA. “The new regulation takes eff ect at a time when several large corpo- rations have announced signifi cant layoff s. In recent years, companies have increasingly tried to tie severance deals during mass terminations to waivers of ADEA rights, as many employees who lose their jobs in such actions are over 40 and covered by the statute.”130

Age discrimination also applies to younger individuals. Hanigan Con- sulting Group of New York surveyed 170 recent graduates, some scheduled to receive master’s and doctoral degrees. The fi rm found that some applicants were asked questions that clearly violated antidiscrimination laws, such as:

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Do you intend to get married and have children? What will your boyfriend think of you working long hours? How old are you? Are you married? The basic guideline, according to a Boston attorney with Seyfarth Shaw, is “if the question is not business- related and there is no legitimate business reason for asking it, then do not ask it.”131

Comparable Worth and Equal Pay

The Equal Pay Act of 1963, amended in 1972, prohibits discriminatory pay- ment of wages and overtime pay based on gender. The law, in large part, is based on the doctrine of “comparable worth.” This doctrine and the Equal Pay Act hold that women should be paid wages comparable to men who hold jobs that require equal skill, eff ort, and responsibility and that have the same working conditions. This law addresses this inequity and also applies to ex- ecutive, professional, sales, and administrative positions. Although women have made substantial professional progress over the past 30 years, those gains now seem to have lost momentum and even stalled. “Key indicators such as pay, board seats, and corporate- offi cer posts all refl ect a leveling off or drop in recent years. Although the gap between men’s and women’s pay narrowed signifi cantly through the 1980s, gains since then have been partly erased by a drop every few years.

Affi rmative Action

Affi rmative action programs are a proactive attempt to recruit applicants from minority groups to create opportunities for those who, otherwise, because of past and present discriminatory employment practices, would be excluded from the job market. Affi rmative action programs attempt to make employ- ment practices blind to color, gender, national origin, disability, and age. Although the doctrine of equal opportunity states that everyone should have an equal chance at obtaining a job and a promotion, affi rmative action goes further. For example, Richard DeGeorge stated, “Affi rmative action implies a set of specifi c result- oriented procedures designed to achieve equal employ- ment opportunity at a pace beyond that which would occur normally.”132

Affi rmative action programs were designed to set goals, quotas, and time frames for companies to hire and promote women and minorities in propor- tion to their numbers in the labor force and in the same or similar occupational categories within the company.

Courts have both supported and eroded affi rmative action approaches in the Civil Rights Act. Because of the changing social, po liti cal, and demo- graphic landscape in the U.S., diff erent membership on the Supreme Court, and evidence of reverse discrimination (see below), changes in affi rmative action law are occurring. Affi rmative action remains a controversial topic and policy. Individuals’ rights are violated when affi rmative action programs seek to protect par tic u lar groups. Also, in a market economy where individual achievement based on merit is encouraged and rewarded, it seems unfair that

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arbitrary quotas should supersede those who do excel. On the other side of the controversy are advocates of affi rmative action who claim that the play- ing fi eld still is not level in U.S. corporate, educational, and other institutions whose offi cers select, hire, reward, and promote based on race, gender, na- tional origin, ability, and other biases.

Four arguments that have been off ered to explain and summarize affi r- mative action as it applies to hiring, promotions, and terminations are:

1. Affi rmative action does not justify hiring unqualifi ed minority group members over qualifi ed white males. All individuals must be qualifi ed for the positions in question.

2. Qualifi ed women and minority members can be given preference morally, on the basis of gender or race, over equally qualifi ed white males to achieve affi rmative action goals.

3. Qualifi ed women and minority members can be given preference morally over better- qualifi ed white males, also, to achieve affi rmative action goals.

4. Companies must make adequate progress toward achieving affi rmative action goals, even though preferential hiring is not mandatory.133

Ethics and Affi rmative Action

The ethical principles behind affi rmative action are often debated. Affi rmative action as a doctrine is derived from several ethical principles that serve as bases for laws.

First, the principle of justice can be used to argue for affi rmative action, by claiming that because white males have historically dominated and continue to unfairly dominate the highest paying, most prestigious employment posi- tions in society, members of groups who have been excluded from comparable employment opportunities because of past and present discriminatory prac- tices deserve to be compensated through affi rmative action programs embodied in equal opportunity laws. Opponents of affi rmative action argue that it is unfair and unjust that the distribution of benefi ts be based only on a few cat- egories (race, sex, ethnicity) rather than on achievement or other criteria.

Second, a utilitarian principle can be used to support affi rmative action by claiming that such programs help the majority of people in a society. Oppo- nents argue that affi rmative action cannot be shown or proven to work, and suggest that its benefi ts do not exceed its costs.

Finally, using a rights principle, proponents of affi rmative action can argue that protected groups have a right to diff erent treatment because these groups have not had equal or fair access to benefi ts as other groups have. In fact, the rights of minorities, women, and other underprivileged groups have been de- nied and violated regarding access to education, jobs, and other institutional opportunities. Opponents using the rights principle argue that the rights of all individuals are equal under the law. The controversy continues as the eco- nomic, social, po liti cal, and demographic environments change.

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Reverse Discrimination: Arguments against Affi rmative Action

Arguments against affi rmative action are directed toward the doctrine itself and against its implementation of quotas. The doctrine has been criticized on the grounds that nondiscrimination requires discrimination (that is, reverse discrimination). Reverse discrimination is alleged to occur when an equally qualifi ed woman or member of a minority group is given preference over a white male for a job or when less qualifi ed members of an ethnic minority are given hiring preference over white males through a quota system. Affi rma- tive action, opponents argue, discriminates against gender and race; that is, white males. Some even say affi rmative action discriminates against age: white, middle- aged males.

Another major argument against affi rmative action says that individuals are held responsible for injustices for which they were not and are not respon- sible. Why should all contemporary and future white males, as a group, have to compensate for discriminatory practices others in this demographic cate- gory once committed or now commit?

Although these claims have some validity, proponents of affi rmative ac- tion argue that injustices from discrimination have been institutionalized against minority groups. It happens that white males continue to benefi t from the competitive disadvantages that past and present discriminatory practices have created for others. To compensate and correct for these systemic disad- vantages based on race, gender, and other irrelevant (i.e., not related to em- ployment) characteristics, social affi rmative action goals and programs must be implemented. Still, the law is not a perfect means to correct past or present injustices. People of all races will continue to be hurt by discrimination and reverse discrimination practices. In the meantime, the court system will con- tinue to use civil rights laws, affi rmative action guidelines, and moral reason- ing to decide on a case- by- case basis, the justice and fairness of employment practices.

In June 2002, the Supreme Court upheld the equal protection clause of the 14th Amendment, which guarantees equal treatment under the law by con- doning the University of Michigan Law School’s practice of using race to help integrate the institution’s student body. The second Supreme Court opinion ruled that the admissions program in the university’s undergraduate school violated the equal protection clause of the Constitution by giving minorities a bonus of 20 points in a 150- point system for race. “Two white students have sued the university claiming they were denied admission in favor of less- qualifi ed minorities before the Supreme Court ruled. They want a federal judge to award damages to 30,000 white and Asian students who may have been illegally denied admission to make way for other minority students.”134

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Ethical Insight 7.3

The Pros and Cons of Affi rmative Action

Affi rmative action: Policies and procedures designed to make education and employment opportunities available to minority men and women of all races. Also created to address inequalities of present and past historical and institu- tional discrimination preventing persons of diff erent races from access to education and employment in schools, universities, police and fi re depart- ments, and other public offi ces, as well as jobs in the private sector.

Affi rmative Action Opponents Advocates

1. Perpetuates reverse discrimination.

2. Promotes the less qualifi ed over the more qualifi ed, instead of opening doors to the historically underrepresented.

3. Perpetuates repressed groups continuing to be underprivileged for their benefi t.

4. Disadvantages mainstream groups for injustices they did not cause and with which they do not agree.

1. Helps “level the playing fi eld” by providing access to education and jobs that minorities and less advantaged groups would not otherwise be able to obtain.

2. Integrates otherwise closed institutions and corporations with individuals from diverse groups more refl ective of the general population.

3. Is the “right thing to do.” Three centuries of discrimination requires compensatory justice.

Questions 1. Which side of the arguments do you accept as most reasonable and realistic?

Explain. 2. Why does the “Opponents” reasoning have validity? 3. Why does the “Advocates” reasoning have validity? 4. Does a level playing fi eld exist in the society in which you live? Explain.

UCLA Law Professor Richard H. Sander argues that affi rmative action programs are harmful for African American law school students because high attrition rates resulting from admitting students who fail to do the work will, in turn, turn away African American students from entering. Sander’s opponents disagree with his methods and analysis. The debate over just and unfair affi rmative action policies and procedures, especially in university ad- mittance policies, continues to evolve.

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7.5 Sexual Harassment in the Workplace

Sexual harassment was not a specifi c violation of federal law before 1981. It now may be diffi cult to imagine fl agrant acts of sexual violation against women, but as recently as 20 years ago, when women worked in mines, they, like their male counterparts, were stripped and soaked in axle grease in a prim- itive hazing ritual, and then, unlike the male employees, the women were tied to wooden supports in spread- eagle positions.135 The Senate hearings on sexual harassment charges against Supreme Court nominee Clarence Thomas awakened public and corporate concern about sexual harassment in society and the workplace. In addition, the overt sexual harassment of female U.S. Navy professionals also has brought attention to this issue. Although sexual harassment can be and is committed by both men and women, it is more often women who are the victims.

Sexual harassment remains among the most prominent civil rights issues in the workplace. There were 11,364 sexual harassment charges fi led with the EEOC or state agencies in 2011, with $52.3 million paid in monetary benefi ts (not including monetary benefi ts obtained through litigation). TWA agreed to pay $2.6 million to settle a sexual harassment suit fi led in 1998. The suit is one of the largest in New York State. The company will pay $1.5 million to nine women who worked in ground traffi c control, passenger ser vice, and maintenance. The New York Times reported that three women “accused three high- level managers of egregious sexual harassment that included groping and verbal abuse.” Lawyers for the women said that the airline did nothing about repeated complaints taken to diff erent levels of management before the suit was fi led. Other sexual harassments have resulted in multimillion dollar settlements. A lawsuit against the large building- maintenance company ABM Security Ser vices brought by 21 Hispanic female workers resulted in a $5.8 million settlement, in which the company admitted no wrongdoing. Charges included touching, sexual comments, requests for sex, and even rape. A 1998 suit against Mitsubishi Motors by female plant workers at the company’s Normal, Illinois plant resulted in a $34 million settlement. The company now has a “zero tolerance policy in place for sexual harassment.”136 More re- cently, a meta- analysis on sexual harassment showed an or ga ni za tion’s climate was a factor in sexual harassment incidences. Also victims experienced post- traumatic stress disorder, loss of work, decreased or gan i za tion al commitment, poor job satisfaction, and problems with physical and mental health.137

What Is Sexual Harassment?

The Supreme Court ruled in 1986 that sexual harassment is illegal under Title VII of the 1964 Civil Rights Act and that when a “hostile environment” is created through sexual harassment in the workplace, thereby interfering with an employee’s per for mance, the law is violated, regardless of whether eco- nomic harm is done or whether demands for sexual favors in exchange for raises, promotions, bonuses, and other employment- related opportunities are granted.138

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Under Title VII, the EEOC guidelines (1980) defi ne sexual harassment as follows:

Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when (1) sub- mission to such conduct is made either explicitly or implicitly a term or con- dition of an individual’s employment, (2) submission to or rejection of such conduct by an individual is used as the basis for employment decisions aff ecting such an individual, or (3) such conduct has the purpose or eff ect of unreasonably interfering with an individual’s work per for mance or creating an intimidating, hostile, or off ensive working environment.

The courts have defi ned sexual harassment as conduct ranging from blatant grabbing and touching to more subtle hints and suggestions about sex. Forms of sexual harassment include the following: 139

• Unwelcome sexual advances. • Coercion. • Favoritism. • Indirect harassment. • Physical conduct. • Visual harassment. (For example, courts have ruled that sexual harassment

was committed when graffi ti was written on men’s bathroom walls about a female employee and when pornographic pictures were displayed in the workplace.)

More women are speaking out under the protection of Title VII of the amended Civil Rights Act, which is discussed later in this chapter. Sexual harassment continues to be reported across industries, including outstanding companies such as Wal- Mart. Moreover, men’s sexual harassment charges increased to 16.4% of all sexual harassment charges fi led to the EEOC in 2010, compared to only 11.6% in 1997.140 These statistics do not show whether the alleged harassers of men were also men, although they generally are. Diversity training programs are now off ered in many larger reputable U.S. fi rms.

Who Is Liable?

The EEOC guidelines place absolute liability on employers for actions and violations of the law by their managers and supervisors, whether or not the conduct was known, authorized, or forbidden by the employer. Employers also are liable for coworkers’ conduct if the employer knew, or should have known, of the actions in question, unless the employer shows, after learning of the prob- lem, that the company took immediate and appropriate action to correct the situation. Employers may be liable for harassment of nonemployees under the same conditions as those stated for coworkers.141

Moreover, under EEOC guidelines, employers are responsible for estab- lishing programs (and standards) that develop, train, and inform employees

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about sanctions and procedures for dealing with sexual harassment com- plaints (see Figure 7.5). It is in the employer’s economic and moral interest to institute such programs, because courts mitigate damages against companies that have harassment prevention and training programs. Some of the leaders in establishing sexual harassment policies and programs are NYNEX, AT&T, DuPont, Corning, and Honeywell, to mention only a few.

Tangible Employment Action and Vicarious Liability

A currently prominent feature of harassment cases is the concept of “tangible employment action,” which Supreme Court Justice Anthony Kennedy de- scribed as “hiring, fi ring, failing to promote, reassignment with signifi cantly diff erent responsibilities or a decision causing a signifi cant change in bene- fi ts.”142 An employer’s defense against claims of harassment has been created in cases in which a hostile environment was evident but no tangible employ- ment action occurred. In the Supreme Court decision in the case Burlington Industries v. Ellerth:

Kimberly Ellerth’s harasser threatened to take steps against her if she didn’t comply with his wishes. Since he never carried out the threat, Ellerth’s

Figure 7.5

Sample Corporate Sexual Harassment Policy

1. Sexual harassment is a violation of the corporation’s EEO policy. Abuse of anyone through sexist slurs or other objectionable conduct is offensive behavior.

2. Management must ensure that a credible program exists for handling sexual harass- ment problems. If complaints are fi led, they should receive prompt consideration with- out fear of negative consequences.

3. When a supervisor is made aware of an allegation of sexual harassment, the following guidelines should be considered:

a. Obtain information about the allegation through discussion with the complainant. Ask for and document facts about what was said, what was done, when and where it occurred, and what the complainant believes was the inappropriate behavior. In addition, fi nd out if any other individuals observed the incident, or similar incidents, to the complainant’s knowledge. This is an initial step. In no case does the supervi- sor handle the complaint pro cess alone.

b. If the complaint is from an hourly employee, a request for union repre sen ta tion at any point must be handled as described in the labor agreement.

c. The immediate supervisor or the department head and the personnel department must be notifi ed immediately. When a com- plaint is raised by, or concerns, an hourly employee, the local labor relations representative is to be advised. When a com- plaint is raised by or concerns a salaried employee, the personnel director is to be advised.

4. The personnel department must conduct a complete investigation of the complaint for hourly and salaried employees. The investigation is to be handled in a professional and confi dential manner.

Source: Based on the General Motors corporate policy on sexual harassment.

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employment status was not negatively aff ected. However, her harassment was severe and pervasive, and Burlington was held liable for that instead.143

Severe and pervasive harassment that has no tangible employment action characterized another case, Faragher v. City of Boca Raton. In this case, it was determined that lifeguard Beth Faragher had been repeatedly harassed by two male supervisors for several years. She complained to other beach supervisors, but to no avail. Attorneys for the city argued that she had not complained to authorities at a high enough level. This defense laid the foundation for another key concept the Court stressed: “vicarious liability.”144

Employers, under this concept, could be liable for harassment if it is com- mitted by anyone present in the workplace and if it is brought to the attention of any manager or supervisor. Employers are liable for harassment by anyone who is present in the workplace (coworkers, customers, vendors), if the employ- ers know or should have known about the harassment. Moreover, employers are liable for harassment by all supervisors, whether the employer knew about the harassment or not. This represents a signifi cant change in sexual harassment liability.

Employer Guidelines with Extended Liability Rulings Employers should:

• Exercise reasonable care to prevent and correct for any harassment. There should be an antiharassment policy and a complaint procedure present, made known to every employee, readily available, and used in training. The EEOC enforcement guidelines provide an excellent source of training materials.

• Quickly and eff ectively address all harassment complaints.145

Individual Guidelines Although sexual harassment often occurs as part of a power issue (i.e., people in more powerful positions exert pressure over people in less powerful posts), a frequent observation is that men and women tend to see sexual harassment diff erently. This certainly does not justify legally or morally unwelcome sex- ual advances. It does suggest, however, that employers need to provide ade- quate education, training, and role- playing between the sexes so that gender diff erences in perceptions and feelings on what constitutes sexual harassment can be understood. Some practical guidelines that employees (men, in this instance) can use to check their motives and behavior regarding sexual harass- ment include the following:146

• If you are unsure whether you have off ended a woman, ask her. If you did off end her, apologize, and don’t do it again.

• Talk over your behavior with noninvolved women and with men you can trust not to make a mockery of your concerns.

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• Ask yourself how you would feel if a man behaved toward your daughter the way you feel you may be behaving toward women.

• Ask yourself also if you would act this way if the shoe were on the other foot, if the woman were your boss or if she were physically stronger or more powerful than you.

• Most of all, don’t interpret a woman’s silence as consent. Silence is, at least, a “red light.” Through silence, a woman may be trying to send you a signal of discomfort. Be very certain that your comments or behaviors are welcome, and if they are not, stop them.

Sexual Harassment and Foreign Firms in the United States

Two foreign companies operating in the United States have reacted diff er- ently to sexual harassment charges; this is a perilous area where the law and societal norms are rapidly changing. These companies’ reactions have exposed them to increased liability. One of the fi rms, Astra, a Swedish pharmaceuti- cal fi rm, fi red its CEO of the U.S. subsidiary and two other top managers. The other company, Mitsubishi, has denied all charges; has maintained that EEOC is wrong; and has mounted a full- scale public relations campaign to discredit complainers. Both companies lacked one of the most basic require- ments con sul tants recommend: a clear and strongly written policy on sexual harassment.147

Companies have the obligation of training and supporting their employ- ees who work and conduct business internationally on harassment and dis- crimination laws. “When in Rome, do as the Romans do” does not mean do nothing, act immorally, or act from your own intuition as an employee repre- senting your company. As Figure 7.6 illustrates, many countries have specifi c laws on employment discrimination and sexual harassment. Some are not the same as those in the U.S. For example, Venezuela, as of January 1, 1999, has a new employment discrimination statute that prohibits sexual harassment and punishes this crime by a prison term from 3 to 12 months. The off ender must also pay the victim twice the amount of economic damage in regard to lack of access to positions, promotions, or job per for mance that resulted from the sexual harassment.148

7.6 Whistle- Blowing versus Or gan i za tion al Loyalty

The decision to become a whistle- blower frequently requires breaking with the very group that we have viewed as critical to our fi nancial success, if not our very survival. The decision entails destabilizing one’s life and placing all the essential underpinnings of our fi nancial security— and the security of those who depend on us— at total risk. It is easy to understand that such a decision is accompanied by a good deal of anxiety and stress.149

Among all the rights discussed in this chapter, one of the most valued by a U.S. citizen is freedom of speech. But how far does this right extend into

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Jurisdiction

Prohibitions on Employment

Discrimination Prohibitions on Sexual

Harassment Legal Basis

Argentina Yes Yes, by judicial ruling Section 16, Argentine Constitution

Australia Yes Yes Race, Sex, and Disability Acts

Belgium Yes Yes Article 10, Belgian Constitution; Royal Decree of September 19, 1997

Brazil Yes No Article 5, Brazilian Constitution; Section 461, Brazilian Labor Code

Canada Yes Yes Human rights laws of each province

Chile Yes Yes Article 19, Constitution; Article 2, Labor Code

Colombia Yes No Article 53, Constitution; Article 10, Labor Code

Czech Republic Yes, by judicial decision

No Decision No. 13/94, Constitutional Court

Egypt Yes No, except by extension of Civil Code

Article 40, Constitution

France No Yes Article L 122- 46, French Labor Code; Article 27, Law of December 31, 1992

Germany No Yes Section 2, Article 31, Constitution; Disability Act; Employee Protection Act

Hong Kong Yes Yes Sex Discrimination Ordinance; Disability Discrimination Ordinance

Hungary Yes No Article 5, Hungarian Labor Code

Ireland Yes Yes Employment Equality Act

Italy Yes Yes, by judicial decision Law No. 125 of April 10, 1991

Figure 7.6

Survey of Harassment and Its Crimination Law

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475

Source: Adapted with permission from Maatman Jr., Gerald. (September 11, 2000). Harassment, discrimination laws go global. National Underwriter, 104(37), 3.

Japan Yes Yes Equal Employment Opportunity Act

Mexico No Yes Section 153, Mexican Penal Code

Netherlands Yes Yes Article 3, Dutch Labor Conditions Act; Article 7, Dutch Civil Code

People’s Republic of China

Yes No Article 12, Labor Law of the PRC (1995)

Philippines No Yes Republic Act 7877 (1995)

Poland Yes No Articles 32 and 33, Constitution; Labor Code

Republic of South Africa

Yes No Act No. 66, South African Labor Reform Act of 1995

Rus sia Yes No Rus sian Labor Law of 1995

Singapore Yes; age only No Retirement Act

Spain Yes Yes Articles 9, 14, and 35, Spanish Constitution; Section 34.3.95 of Spanish Employment Act

Sweden Yes Yes The Act on Equal Opportunities at Work

Switzerland No Yes Article 3, Law on Equal Treatment of Women and Men

Taiwan No Yes Article 83, ROC Social Order Maintenance Act

Thailand Yes Yes Constitution; Labor

Ukraine Yes No Article 42, Labor Code of the Ukraine

United Kingdom Yes Yes Sex, Race, and Disability Discrimination Laws

Venezuela No Yes Law on Violence Against Women and Family

Figure 7.6 —continued

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476 Business Ethics

the corporation, especially if an employee observes an employer committing an illegal or immoral activity that could harm others? What are the obliga- tions and limits of employee loyalty to the employer? Under what, if any, circumstances should employees blow the whistle on their supervisors, man- agers, or fi rms?

Whistle- blowing is “the attempt of an employee or former employee of an or ga ni za tion to disclose what he or she believes to be wrongdoing in or by the or ga ni za tion.”150 Whistle- blowing can be internal (reported to an executive in the or ga ni za tion); external (reported to external public interest groups, the media, or enforcement agencies); personal (harm reportedly done only to the whistle- blower); and impersonal (harm observed as done to another).151 Whistle- blowing goes against strong U.S. cultural norms of showing loyalty toward an employer and colleagues and avoiding the “snitch” label. However, strong cultural norms regarding fairness, justice, a sense of duty, and obedience to the law and to one’s conscience also exist. A moral dilemma can occur when a loyal employee observes their employer committing or assisting in an illegal or immoral act and must decide what to do.

The whistle- blower may not only lose his or her job but may also experi- ence negative and damaging repercussions in his or her profession, marriage, and family life. Dr. Jeff rey Wigand, head of research at Brown and Williamson Tobacco Company from 1989 to 1993, testifi ed that this company knew and controlled the nicotine levels in its products. His testimony, along with that of others, helped the government initially win a substantial lawsuit against the tobacco industry. As the fi lm The Insider accurately documented, Wigand paid an enormous personal price as a witness.152

Not all whistle- blowers undergo such traumatic fates as the example off ered here. Michael Haley, a federal bank examiner, won $755,533 in back pay, future loss of income, and compensatory damages under the federal whistle- blower statute and another amended federal statute. He had worked as a bank examiner for the Offi ce of Thrift Supervision (OTS), starting in 1977. He inspected OTS- regulated banks, evaluating the soundness of their operations. He was terminated after he reported violations in federal banking laws and regulations regarding a forced merger.153

Under what conditions is whistle- blowing morally justifi ed? DeGeorge discusses fi ve conditions:154

1. When the fi rm, through a product or policy, will commit serious and considerable harm to the public (as consumers or bystanders), the employee should report the fi rm.

2. When the employee identifi es a serious threat of harm, he or she should report it and state his or her moral concern.

3. When the employee’s immediate supervisor does not act, the employee should exhaust the internal procedures and chain of command to the board of directors.

4. The employee must have documented evidence that is convincing to a reasonable, impartial observer that his or her view of the situation is

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accurate and evidence that the fi rm’s practice, product, or policy seriously threatens and puts in danger the public or product user.

5. The employee must have valid reasons to believe that revealing the wrongdoing to the public will result in the changes necessary to remedy the situation. The chance of succeeding must be equal to the risk and danger the employee takes to blow the whistle.

The risks to whistle- blowers can range from outright termination to more subtle pressures, such as strong and hidden criticisms, undesirable and bur- densome work assignments, lost perks, and exclusion from communication loops and social invitations.155 Although 21 states have laws protecting cor- porate and governmental whistle- blowers from reprisal, experience shows that the government’s actual protection to whistle- blowers, even if after re- signing or being fi red they are reinstated with back pay and compensation for physical suff ering, is weak because of the many subtle forms of retaliation, such as those just listed.

The Whistleblower Program proposed under the Dodd- Frank Wall Street Reform and Consumer Protection Act took eff ect on August 12, 2011. This program off ers monetary awards to eligible whistle- blowers for information provided to the Securities and Exchange Commission (SEC). To be eligible, the tip provided to the SEC must be of high- quality information and must lead to a “Commission enforcement action in which over $1,000,000 in sanc- tions is ordered. The range for awards is between 10% and 30% of the money collected.” Although this provides incentive for the disclosure of potential fraud to the SEC, it may also have negative repercussions for companies and whistle- blowers. Companies now have greater motivation to prevent whistle- blowing to the SEC, as SEC action may lead to monetary sanctions, loss of reputation, and other damage.156

When Whistle- Blowers Should Not Be Protected

The most obvious condition under which whistle- blowers should not be protected is when their accusations are false and their motivation is not justi- fi able or accurate.

The following instances are when whistle- blowers should not have free- dom of speech against their employers:

• When divulging information about legal and ethical plans, practices, operations, inventions, and other matters that should remain confi dential and that are necessary for the or ga ni za tion to perform its work effi ciently.

• When an employee’s personal accusations or slurs are irrelevant to questions about policies and practices that appear illegal or irresponsible.

• When an employee’s accusations do not show a conviction that a wrongdoing is being committed and when such accusations disrupt or damage the or ga ni za tion’s morale.

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• When employees complain against a manager’s competence to make daily work decisions that are irrelevant to the legality, morality, or responsibility of management actions.

• When employees object to their discharge, transfer, or demotion if management can show that unsatisfactory per for mance or violation of a code of conduct was the reason for the decision.157

Factors to Consider before Blowing the Whistle

Whistle- blowing is a serious action with real consequences. It often involves a decision to be made among confl icting moral, legal, economic, personal, family, and career demands and choices. No single answer may appear. A stake- holder analysis can help the potential whistle- blower identify the groups and individuals, stakes, priorities, and trade- off s when selecting among diff erent strategies and courses of action.

The following 12 guidelines off er factors that a person should consider when deciding whether to blow the whistle on an employer:158

1. Make sure the situation warrants whistle- blowing. If serious trade secrets or confi dential company property will be exposed, know the harm and calculated risks.

2. Examine your motives. 3. Verify and document your information. Can your information stand

up in a hearing and in court? 4. Determine the type of wrongdoing and to whom it should be reported.

Knowing this will assist in gathering the type of evidence to obtain. 5. State your allegations specifi cally and appropriately. Obtain and state

the type of data that will substantiate your claim. 6. Stay with the facts. This minimizes retaliation and avoids irrelevant

mudslinging, name- calling, and stereotyping. 7. Decide whether to report to internal contacts or external contacts.

Select the internal channel fi rst if that route has proven eff ective and less damaging to whistle- blowers. Otherwise, select the appropriate external contacts.

8. Decide whether to be open or anonymous. Should you choose to remain anonymous, document the wrongdoing and anticipate what you will do if your identity is revealed.

9. Decide whether current or alumni whistle- blowing is the best alternative. Should you blow the whistle while you are an employee or resign fi rst? Resigning should not be an automatic option. If the wrongdoing aff ects others, your decision is not only a personal one, but you are also fulfi lling moral obligations beyond your own welfare.

10. Follow proper guidelines in reporting the wrongdoing. Check forms, meeting deadlines, and other technicalities.

11. Consult a lawyer at every step of the way. 12. Anticipate and document retaliation. This assists your eff ectiveness with

courts and regulatory agencies.

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Managerial Steps to Prevent External Whistle- Blowing

Managers have a responsibility to listen to and respond to their employees, especially regarding the observations of and reporting of illegal and immoral acts. Chapter 6 discussed mechanisms such as “ethics offi ces,” ombudsperson programs, and peer review programs. These are part of a corporation’s re- sponsibility to provide due pro cess for employees to report personal grievances, to obtain eff ective and just resolution of them, and to report the wrongdoings of others, including the employers. Four straightforward and simple steps management can take to prevent external whistle- blowing are:159

1. Develop eff ective internal grievance procedures and pro cesses that employees can use to report wrongdoings.

2. Reward people for using these channels. 3. Appoint se nior executives and others whose primary responsibilities are

to investigate and report wrongdoing. 4. Assess large fi nes for illegal actions. Include executives and professionals

who fi le false or illegal reports, who knowingly market dangerous products, or who off er bribes or take kickbacks.

Preventing, reporting, and eff ectively and fairly correcting illegal and immoral actions, policies, and procedures are the responsibilities of employers and employees. Management cannot expect employees to be loyal to a com- pany that promotes or allows wrongdoing to its stakeholders. Whistle- blowing should be a last resort. A more active goal is to hire, train, and promote mor- ally and legally sensitive and responsive managers who communicate with and work for the welfare of all stakeholders.

Chapter Summary

The demographics of the workforce at the beginning of the twenty- fi rst cen- tury continue to change. These changes include the aging of employees, the “shrinking” of the workforce, an increasing number of women and minority entrants, the demand for work– life balance from singles and dual- career fami- lies, the gap in educational levels, and a greater demand for the skills of disabled workers. The changes in the composition of the workforce signal changes in work- related values and motivations. Corporations and managers can expect moral tensions to rise regarding issues such as age discrimination, health care needs, confl icting communication, generational diff erences, and requests for more balanced and fl exible work schedules. “One size fi ts all” management techniques do not work.

The social and psychological contract between corporations and employees is also changing. The original employment- at- will doctrine serves as the basis for employment between employer and employee; however, over the years, this doctrine has been complemented by the doctrine of implied employee rights. Most fi rms, large and small, use a mix of the two doctrines. Two underlying concepts of employee rights are balance and governmental rights.

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The nature of legal and moral relationships between employers and em- ployees is also changing. Employers rely on federal and state laws to guide their employee policies and procedures. However, many employers implement ben- efi ts and policies aimed at motivating and supporting employees’ well- being. Work– life resources and insurance coverage for employees’ same- sex part- ners are such examples.

Recent court decisions have supported racial affi rmative action practices at the university admittance level. Although EEOC policies and affi rmative action practices remain a part of federal law, some states are showing less ac- cep tance of these laws and procedures. Current and future issues related to sexual harassment and reverse discrimination will continue to shape legal and moral guidelines for corporations. Confl icts regarding due pro cess, privacy, safety, drug testing, sexual harassment, technology monitoring, and other work- place topics will continue to be resolved through court cases and legislation; their resolution will infl uence corporate policies in the future.

Sexual harassment laws and guidelines for employers and employees and the moral dilemma of or gan i za tion al loyalty versus personal ethics will always be important issues. The justifi cation for whistle- blowing and guidelines for potential whistle- blowers must be considered by employees before blowing the whistle and by corporations to prevent external whistle- blowing.

Questions

1. Identify two major trends in the changing demographics of the workforce. Include a trend that you as a student or employee could be or are now af- fected by.

2. Identify moral tensions and/or confl icts that could lead to illegal and/or un- ethical behavior associated with the changes you gave in question 1.

3. What are three major factors an employer should consider to avoid arbi- trarily terminating an employee? What steps would you take if you were ter- minated by an employer who arbitrarily fi red you?

4. What problems do you see occurring when employees date in a company? What additions or changes would you make to the tips and suggestions of- fered on dating in the chapter?

5. What does the term legal and moral entitlement mean to you as an em- ployee or future employee? Give an example. Do you agree that employees have legal and moral entitlements in the workplace? Explain.

6. Do you believe dating should be permitted among employees in the work- place without formal policies setting boundaries and rules? Why or why not?

7. Do you believe managers and company offi cers should date lower level em- ployees with less power and status? Why could this situation present ethi- cal dilemmas?

8. What are some changes that have occurred as a result of the Civil Rights Act of 1991?

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7 Employee Stakeholders and the Corporation 481

9. Do you believe there is now an “equal playing fi eld” regarding access to educational institutions, jobs, and other employment opportunities for all in- dividuals and groups in the United States? Explain. Do you believe women should still be a protected group under Title VII of the Civil Rights Act? Explain. Do you believe minorities of different races in the U.S. other than Caucasian should still be protected? If so, which group(s)? If not, explain why not.

10. What are some arguments for and against “reverse discrimination?” Is the “playing fi eld” in U.S. corporations more level now?

11. Describe criteria used to determine whether verbal or physical actions con- stitute sexual harassment. What are some specifi c types of sexual harass- ment? Have you been sexually harassed in a work setting? Can you describe what happened and the outcome?

12. What should employees expect from their employers and their companies now in terms of rights and obligations? Explain. Is loyalty to an employer a “dead” or “dying” concept now? Why or why not?

13. Do you believe whistle- blowing is justifi able in corporations? Would, or could, you blow the whistle? Under what circumstances would you be compelled to blow the whistle as an employee in an or ga ni za tion? Offer an example.

14. Should corporate managers prevent whistle- blowing? Why or why not? Explain.

15. How can employers prevent whistle- blowing?

Exercises

1. Argue the pros and cons of eliminating standards such as test scores, grade point averages, and other objective criteria for admitting minorities and members of protected groups to universities and colleges. Do you believe such objective criteria should be eliminated by university and college admissions commit- tees? Explain.

2. Select an employee right in the workplace from the chapter. Give an example, based on your own outside reading or experience, of a situation involving this right. Was it violated? How? What was the outcome? What should the out- come have been? Why?

3. Identify an example from your own experience, or that of someone you know, of discrimination or sexual harassment. Did this experience infl uence your view of affi rmative action or employee protection programs? If so, how?

4. Write a paragraph describing a situation from your experience in which you felt justifi ed that you had cause to blow the whistle. Did you? Why or why not? Under what circumstances do you feel whistle- blowing is justifi ed?

5. Think of three people you know from the different generations discussed in the chapter. Of these people, who is and is not satisfi ed with their work and jobs? Explain why they are or are not satisfi ed. Refer back to the generational

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differences and values in the chapter. To what extent did “generational differ- ences” contribute in your analysis of the individuals’ work satisfaction? To what extent did “ethical reasons” affect their work satisfaction? Explain.

6. Create a “for” and “against” set of arguments regarding the “employment- at- will” doctrine in the present economic and demographic environment. After you make a complete set of arguments, which position do you support? Did your views change after this exercise? Why or why not?

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Real- Time Ethical Dilemma

What’s Going on Here? Bill Smith and Lana Kane seemed to have had some “bad chemistry” the day they met. Bill, 23, a recent graduate and now working on his MBA, has been with the Marketing Group for a year. He is eager to excel, thrives on instant (especially positive) feedback, and is accustomed to participative, entrepre- neurial work relationships. Upper- level management has been impressed with his work and has given him “free reign” on most assignments, since the Marketing Group had been without a director for the past year. Lana, 51, has been with the company for nine years and has just been assigned to head up the Marketing Group. Lana is accustomed to a more structured, orderly ap- proach and also takes her se niority seriously. Bill was preparing a pre sen ta tion on a new promising product launch for the company’s CEO and offi cers when he found an e-mail from Lana asking to review and approve his pre sen ta tion before he submits it to Ralph, the CEO.

Lana’s e-mail was critical of several of Bill’s ideas, and she asked to meet with him. At their one- on- one meeting the following afternoon in Lana’s offi ce, they immediately started clashing. Lana politely but straightforwardly read her responses to Bill’s e-mail, and Bill couldn’t remain silent. He chal- lenged her on every point, refusing to accept her logic. Lana grew tense and fi nally lashed out at Bill saying, “Can’t you be more open to diff erent perspec- tives? My role is to off er criticism to improve our eff orts, not only to always give praise.” Bill was frustrated and hurt that Lana couldn’t see the same talent in him that upper management saw. “Why is she so stubborn and control- ling?” he thought as he folded up the paper with her comments about his pre- sen ta tion. Ner vous ly pondering the situation before leaving her offi ce, he thought, “Maybe I should talk to Ralph about her. If I have to work with this style, I should pack my bags today.” At the same time, when Lana looked at Bill’s expressions, she thought, “I’m not sure this guy ‘gets it.’ He’s bright but too spoiled, and not tough- skinned enough to take helpful criticism. I wonder if I should talk to HR [human resources] about him?”

Questions 1. What are the problems in this situation? 2. What potential “ethical” dilemma or issue could arise from this situation? 3. What perspective(s) in this chapter could help diagnose this evolving issue? 4. What should be done to prevent an issue from erupting into a confl ict and

between whom?

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Cases

Case 19

Preemployment Screening and Facebook: Ethical Considerations

Introduction In 2006, researchers at the University of Dayton surveyed over 5,000 employers nationwide and found a surprising trend brought on by the rapid growth of online social media: 40% of employers had considered the Facebook profi le of a po- tential employee as part of their hiring decision (Wiley). As Facebook’s popular- ity has increased, so too did the number of employers using Facebook to vet job applicants. “Recruiting has always been an art, but it’s becoming a science,” says Dan Shapero. More and more employers are using otherwise personal in- formation in recruiting decisions. In 2009, a study by Microsoft found that over 70% of recruiters and human resource (HR) departments had rejected candidates or rescinded offers after checking Facebook and related social networking web sites.

As if job seekers didn’t already have enough to contend with— criminal back- ground checks, drug tests, credit reports, and verifi cation of employment history, education, income, etc. are among the most common forms of pre- hire scrutiny used by employers today— now it appears social media, Facebook in par tic u lar, has become a deciding factor in who gets hired— and fi red— in today’s workforce. The volume of résumés typically received for open positions makes it more effi - cient for recruiters to conduct online searches than to conduct reference checks. With nearly 50% of resumes containing factual errors, employers contend that they are acting in the best interest of the fi rm by erring on the side of caution when it comes to hiring.

According to Beth E. H. Lory, lead employer relations coordinator for the career ser vices offi ce at the University of Minnesota, traditional college- aged students (18 to 22 years of age) are affected the most by this emerging trend since they post more videos, pictures, thoughts, experiences, and observations on Facebook than any other group. Chris Wiley, associate director of career ser- vices at the University of Dayton and lead researcher of the 2006 employer survey cited earlier, explains further: “Since Facebook was originally created by college students for college students, they view it as ‘their place’ and strictly a social network.”

However, in the eyes of potential employers, students’ Facebook profi les often raise questions about their judgment, eliminating them as job candidates. “The term they’ve used over and over is red fl ags,” says Trudy G. Steinfeld, execu- tive director for the center of career development at NYU. “Is there something about their lifestyle that we [as employers] might fi nd questionable or that we might fi nd goes against the core values of our corporation?” When viewed by corporate recruiters, such pages can make college graduates looking to join the

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workplace appear immature and unprofessional. This raises the all- important question of whether a Facebook profi le accurately portrays an individual. Regard- less of the answer, the fact is that the majority of employers today are basing their hiring decisions, at least in part, on information found on Facebook.

Certainly, there is nothing inherently wrong with “rejecting an applicant with personal characteristics that will negatively affect job per for mance. That is part of any employer’s mandate,” say Texas- based lawyers Peter G. Smith and Whitt L. Wyatt. However, when employers obtain such information through social media “they are unable to ensure that all the information they uncover will be job- relevant”—and most would agree that one’s online social life is not job- relevant. Law often lags behind on issues surrounding technology— preemployment screening using Facebook is currently unregulated— but it doesn’t seem like this will be the case for very long. In addition to questioning Facebook’s legitimacy (i.e., its rel- evance and reliability) in the recruiting pro cess, many are beginning to wonder if using Facebook to evaluate potential employees is a violation of personal and informational privacy, not to mention if there are unintended consequences stem- ming from this uniquely Digital Age practice. Although it is important for employers to know who they are hiring, it is unethical to use Facebook to achieve this goal on the basis of privacy and fairness.

Ethical Considerations “[Facebook] is becoming very much a common tool,” said Warren Ashton, group marketing manager at Microsoft. “For the fi rst time ever, you suddenly have very public information about any candidate.” Many companies who have used infor- mation retrieved on Facebook in their recruiting pro cess champion this belief, believing all user- generated content on the Internet is “public,” so long as it is legally accessible. In other words, all nonproprietary, noncopyrighted information available on the Internet is fair game for employers to use as they wish. However, this self- serving interpretation of “fair use” is incomplete and morally irresponsible. Heidi Perman, assistant director of the campus career center at the University of Min- nesota says, “Just because [employers] have access to the information does not make it right for [them] to get it.” Information on Facebook is of a personal nature and it should be approached (or not approached) the same way, since all people have an appreciable, albeit unspoken, right to privacy.

According to Facebook’s “Statement of Rights and Responsibilities”: “You own all of the content and information you post on Facebook, and you can con- trol how it is shared through your privacy settings.” When a Facebook user posts personal information on their profi le and then limits that information to a specifi c network, such as his/her alma mater or online friends, there is a reasonable ar- gument that this information should be considered private. One issue with this defense, however, is that the default setting for various Facebook applications (e.g., profi le picture, po liti cal affi liation, relationship status) enables anyone with a Facebook account to access this information. More often than not, recruiters have no trouble viewing candidates’ Facebook profi les because said privacy set- tings have not been utilized. Alternatively, if an employer searches a candidate’s

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profi le and fi nds it is blocked, a new issue can arise since employers may won- der why and assume he/she must be hiding something.

HR professionals and recruiters will sometimes ask candidates to “friend” them on Facebook before continuing to second round interviews. This tactic is not only deceptive, but it also subjects candidates to a host of personal biases. What ought to be an objective assessment of relevant job skills becomes a sub- jective judgment of “character.” The lengths to which employers are willing to violate personal and informational privacy to view information that was more than likely never intended for them raises an even greater ethical issue surrounding the use of Facebook in the recruiting pro cess: how employers are interpreting and using this information for their hiring decisions.

For most, Facebook is a vehicle for casually interacting with others in an in- formal setting. In this light, Facebook users post and share information intended for their friends, rather than considering the impact their content may have with potential employers. Not surprisingly, 64% of students (N = 2,000 undergradu- ates from colleges and universities nationwide) said employers should not con- sider Facebook profi les during the hiring pro cess. Results from a similar survey conducted in 2010 by the National Association of Colleges and Employers (NACE) indicate that “less than one- third of responding se niors think employers should be looking at their profi les.” Students’ opinions aside, the same NACE survey found that “more than a third of responding employers said they found informa- tion that caused them not to hire a person applying for the job, including pro- vocative or inappropriate photographs [and] content related to drinking or using drugs.”

To put it in a context that may resonate with employers from older genera- tions who never had to contend with Facebook to progress in their careers, Pe- ter Engler and Peter Tanoury, MBA students from the University of Colorado’s Leed School of Business, say “recruiters’ actions are similar to job applicants following a group of executives on their Sunday morning round of golf and listen- ing to all of their conversations . . . [and] then forming an idea about the fi rm as a whole and deciding if they wanted to work there.” In this analogy, it is unlikely these executives would censor their conversations because they are in an open forum, despite the fact there is no physical privacy. Candidates’ Facebook pro- fi les warrant the same privacy that the executives would demand— and deserve— during their hypothetical round of golf. This analogy not only resonates back to the issue of personal and informational privacy discussed earlier, but it also al- ludes to the issue of fairness in the context of using irrelevant and potentially in- accurate information to make hiring decisions.

Although the majority of employers are using Facebook to discern the “right men (and women) for the job,” some companies, including Enterprise Rent- a-Car, Ernst & Young, and Osram Sylvania, say they do not use social media to screen job applicants. “I’d rather not see that part of them,” said Maureen Crawford Hentz, manager of talent acquisition at Osram Sylvania. “I don’t think it’s related to their bona fi de occupational qualifi cations.” Hentz makes a valid point— even if one’s online persona was a refl ection of who one is as a person and the types of

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decisions one makes (in one’s personal life), the information on Facebook has no bearing on how one will perform in the workplace and therefore should not be factored into an employer’s hiring decision.

Technology has a long- standing habit of blurring the lines between people’s personal and professional lives, but it is the responsibility of both employers and employees to preserve these boundaries. Of course, it is impossible to com- pletely separate the two, but that doesn’t give employers the right to determine one’s professional merits from an information source that is strictly personal. After all, there’s a reason employers don’t conduct reference checks of friends and family— and the same reason applies to using Facebook to evaluate potential employees. A case can be made that employees in sales, public relations, and customer ser vice, or any higher- level managerial position function, are represen- tatives of their company. Therefore, companies have a legitimate concern for how their employees behave off- the- clock.

However, this justifi cation is missing one crucial element: context. For ex- ample, in the case of the recent college graduate, the missing context is profes- sional responsibility; that is, holding one accountable for actions that took place prior to his/her employment. Potential employees cannot be held to the same behavioral standards as current employees, especially in this example, given the differences in maturity pre- and postcollege graduation. More fundamentally, what place does an employer have dictating what an employee— or rather, a person— does on his/her own time, so long as it’s legal and not specifi cally prohibited in the company’s code of conduct? Professional responsibility notwithstanding, it is unfair, and therefore unethical, for employers to use Facebook as an ideological litmus test and consider the perceived social habits of job applicants during the recruiting pro cess.

The ethical issue of fairness not only revolves around the relevance of the information on candidates’ Facebook profi les, but also around the reliability of this information. “It’s easy to paint an entire picture without context and make inaccurate assumptions based on limited information,” says Heidi Perman, “[but] as someone who hires, I don’t look at Facebook.” Without the appropriate con- text, even factual information can be misinterpreted. For example, let’s say a user lists “partying” as one of his interests. To the user, “partying” may simply consist of having a drink or two with a few friends on Friday night, but to a potential em- ployer, “partying” may be interpreted as irresponsible binge drinking. Facebook screening is often conducted in the earlier parts of the recruiting pro cess, there- fore the unsuspecting candidate in this example would likely never be given a chance to correct the inaccurate, negative impression. He would be eliminated prior to being given an interview.

Of course, there’s also the possibility for employers to misinterpret false in- formation. For example, “in one instance a female user was a member of the group ‘Future Trophy Wives of America.’ Although a college student would look at this as a joke or think nothing of it at all, an employer may take this as fact and assume the female would only work for a few years before marrying and quitting.” Engler and Tanoury’s example is consistent with the University of Dayton study, which

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found that 23% of students said they intentionally misrepresented themselves to be funny. Both of these examples resonate back to the question of whether a Facebook profi le accurately portrays an individual— and prove that it does not. The ethics of justice (i.e., principle of fairness) purports that everyone be treated equally, and in the case of employment, that each candidate be given a fair chance to be considered for the position he/she is seeking. Consequently, using Face- book in the recruiting pro cess and basing hiring decisions on information taken out of context, that may or may not be true, is an unfair and unethical practice.

Legal Considerations Although no laws specifi cally prohibit this practice, employers run the risk of vio- lating other laws. The Fair Credit Reporting Act (FCRA), for example, “requires employers to notify job applicants and obtain their consent before conducting a background check.” Though the current FCRA guidelines do not apply to the preemployment screening of social media, experts agree that it is only a matter of time. The Employment Practices Data Protection Code states that an employer “should not place reliance on information collected from possible unreliable sources . . . [and] employers should only use pre- employment vetting as a means of obtaining specifi c information, not as a means of general intelligence gather- ing.” The Employment Practices Data Protection Code echoes both the issues of privacy and fairness. The following elements of this code were designed to pro- tect the rights of individual citizens and consumers with regard to their privacy from either intentional and/or unintentional data collection, sharing, and use by and between organizations:

• Some personal information (e.g., sex and race) would normally be obtained through a conventional interview. But other information such as country of origin, religious preference, pregnancy, age, disability or sexual orientation might not.

• Employers . . . increase their exposure to discrimination claims when they gather too much [protected] information about a candidate. The Equal Employment Opportunity Commission (EEOC) provides a list of certain classes of informa- tion that employers are generally prohibited from asking an applicant. The list is as follows: age, disability, ge ne tic/family information, national origin, pregnancy, race/color, religion, sex/sexual orientation, and po liti cal views. These classes of information are considered “protected information” under federal civil rights laws, including Title VII of the Civil Rights Act, the Americans with Disabilities Act (ADA) and the Age Discrimination in Employment Act (ADEA). Under fed- eral law, employers must demonstrate that the information gained by inquiring into one or more of the above- referenced classes is relevant to determining an applicant’s fi tness to perform the job. Otherwise, such inquiries are presumed discriminatory by the employer.

“When an employer visits a person’s social web site, the employer is instantly given access to everything that person has chosen to share with the world. Much of the information is not protected by law but also is not relevant to the job. In addition to the legal duty of the employer not to discriminate based

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upon a person’s protected characteristics, there is also an ethical duty for the employer not to discriminate based upon any characteristics that do not affect the job. Often the mere appearance of discrimination is enough for an em- ployer to face a discrimination lawsuit.”

Proposed federal legislation titled the Social Networking Online Protection Act (SNOPA) could make it illegal for employers to require prospective employ- ees to provide passwords and other confi dential information necessary to ac- cess their social- networking accounts as a prerequisite to employment. The proposed bill by Eliot Engel (NY- D) and Jan Schakowsky (IL- D) introduces pio- neer legislation that would make such invasive practices unlawful in today’s tech- nological era. If passed, any employer violating the provisions of SNOPA could face a $10,000 civil penalty.

Practical Considerations Employers’ utilitarian approach to preemployment screening isn’t effective, nor does it reduce harm/serve the “greater good”: “When examining this issue, it is also important to understand the ethical framework from which employers justify their actions. Whether knowing it or not, when an employer uses Facebook as a means for employment screening they are practicing the utilitarian approach of ethics. Under this approach, the ethical corporate action is the one that produces the greatest good and does the least harm for all who are affected— customers, employees, shareholders, the community, and the environment. In the context of employment screening, this means that employers will dig as deep as possible into the personal lives of their applicants, using any means necessary (such as Facebook), in order to hire the best employees who will in turn increase share- holder value.”

Final Comment The argument is not that it is wrong for employers to know about their applicants before hiring an employee, but that Facebook is not the means to acquire this information.

Questions for Discussion 1. What are the main ethical issues regarding social media users and employers? 2. Do you think it is ethical to use social media, such as Facebook, in employment

considerations? Explain. 3. Do you think some information a person communicates on Facebook is private

and confi dential? If not, then isn’t all information on Facebook potentially public? If so, then what is the problem with employers using and making decisions with that information?

4. Would it be ethical if Facebook profi ted from selling your and others’ personal information to employers? Why or why not?

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Sources This case was developed from material contained in the following sources:

Engler, Peter, and Peter Tanoury. (2007). Employers’ use of Facebook in recruiting. In Dan McIntosh, Ralph Drabic, Kristina Huber, Igor Vinogradov, and Michael Bassick (eds.), The ethical imperative in the context of evolving technologies, 61– 74. Boulder, CO: Ethica Publishing. http:// www .ethicapublishing .com /ethicalimperative .pdf, accessed January 7, 2014.

Facebook, Inc. (June 8, 2012). Statement of rights and responsibilities. Facebook. com. http:// www .facebook .com /legal /terms, accessed July 6, 2012.

Finder, Alan. “For Some, Online Persona Undermines a Résumé.” (June 11, 2006). New York Times. http:// www .nytimes .com /2006 /06 /11 /us /11recruit .html ? _r= 3 & pagewanted = all .

Information Commissioners Offi ce (ICO). (2011). The employment practices code. Wilmslow, Cheshire. UK: Wycliffe House, Water Lane. http:// ico .org .uk /Global /~ / media /documents /library /Data _Protection /Detailed _specialist _guides /the _employment _practices _code .ashx, accessed February 28, 2014.

Lory, Beth E. H. (September 2010). Using Facebook to assess candidates during the recruiting pro cess: Ethical implications. National Association of Colleges and Employers Journal, 37– 40. https:// www .class .umn .edu /crimson /dependancies / multimedia /Facebook _in _Hiring _Ethical _Implications .pdf, accessed January 7, 2014.

Nisen, M. (May 6, 2013). Moneyball at work: They’ve discovered what really makes a great employee. BusinessInsider .com. http:// www .businessinsider .com /big -data -in -the -workplace -2013 -5 ?nr _email _referer=1 & utm _source =Triggermail & utm _medium = email & utm _term =War %20Room %20Select & utm _campaign =War %20Room %20Select %202013 -05 -07 & utm _content= emailshare, accessed January 7, 2014.

Ottinger, R. (June 30, 2013). Social networking bill could make pre- employment Facebook searches illegal. New York Employment Lawyer [Blog]. http:// newyork employmentlawyerblog .com /social -networking -bill -could -make -pre -employment -facebook -searches -illegal /, accessed January 7, 2014.

Smith, Peter G., and Whitt L. Wyatt. (2010). Using social networking web sites for hiring decisions: Legal and ethical considerations. North Central Texas Council of Governments Best Practices Forum. Arlington, TX: Nichols, Jackson, Dillard, Hager & Smith. http:// www .governmentresource .com /fi les /Firm _Presentation _- _Online _Social _Media _in _Hiring _Decisions .pdf, accessed January 7, 2014.

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Case 20

Women on Wall Street: Fighting for Equality in a Male- Dominated Industry

Allison Schieffelin and Morgan Stanley On June 12, 2004, Morgan Stanley agreed to pay $54 million to settle dozens of claims from women who alleged that the securities fi rm denied them pay increases and promotions due to their gender. The case, fi led by the Equal Employment Opportunity Commission (EEOC) on September 10, 2001, resulted from repeated complaints by Allison Schieffelin, a 43- year- old former convertible- bond sales clerk who worked in the fi rm’s institutional- stock division for 14 years. Schieffelin earned more than $1 million a year, making her one of the highest- paid and highest- ranking women on Wall Street to publicly challenge the industry’s pay and pro- motion practices. Schieffelin claims that she was trapped under a glass ceiling and continuously denied promotion to managing director despite being the top performer in her department. The EEOC claims that in addition to being repeat- edly denied promotions and pay raises, women employees in Schieffelin’s division “endured coarse behavior and lewd comments from their male colleagues and supervisors.” Moreover, fi rm- organized sales outings with clients to golf resorts and strip clubs excluded women.

Of the $54 million settlement, $12 million was paid directly to Schieffelin. About $40 million will be used to settle complaints from an estimated 100 current and former female employees of the institutional- stock division. The remaining $2 million was used to enhance anti- discrimination training at the fi rm. In addition to the monetary settlement, Morgan Stanley must also fund a program to have an appointed outsider monitor hiring, pay, and promotion practices for a three- year period. Although the settlement seems large, it is merely “pocket change” to a fi rm like Morgan Stanley; the $ 54 million represents approximately 2% of the $2.45 billion in profi ts the fi rm earned in the fi rst half of fi scal year 2004.

Background on the Schieffelin et al. v. Morgan Stanley Case Allison Schieffelin fi rst complained of Morgan Stanley’s working environment in a 1995 written review of her boss stating, “He makes the convertible department and the fi rm by extension an uncomfortable place for women.” During that same year, she also submitted an internal complaint about “unwelcome advances” from one of her male managing directors. At the time, she thought that management would be pleased with the tactful manner in which she handled the issues; how- ever, today she feels management placed her on a “watch list” instead.

In December 1998, after three years of withstanding the men’s locker- room type atmosphere, in which the male employees openly “swapped off- color jokes and tales of sexual exploits and treated their female colleagues as inferior,” Schieffelin took her harassment and discrimination complaints beyond the fi rm’s executives to the EEOC. She hoped that the fi rm would see that she had been a dedicated employee throughout her entire career and that the issues with the

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fi rm’s pay and promotion practices needed to be amended. Instead, she claims the fi rm “embarked on a campaign to get me to quit.” She was fi red in October 2001 for what the fi rm claims to be misconduct after a heated confrontation with her supervisor; however, both Schieffelin and the EEOC viewed her fi ring as illegal retaliation for her discrimination complaints. One year after Schieffelin complained, Morgan Stanley’s New York convertibles department, the department in which Schieffelin worked, promoted Gay Ebers- Franckowiak to managing director— the fi rst female managing director in that department; many people believe that this was no coincidence.

Morgan Stanley denied all discrimination charges and claimed that their female employees were and are treated equally. The EEOC planned to reveal evidence at the trial proving otherwise. The anticipated evidence indicated that some male employees of the fi rm ordered breast- shaped birthday cakes and hired strippers to entertain at offi ce parties. The evidence supposedly provided statistics regarding the disparities between female and male promotion and pay within the fi rm. The trial was scheduled to begin July 12, 2004; however, a settle- ment was wrapped up mere minutes before opening arguments began. As part of the settlement, payroll statistics that showed whether or not there was a pattern of discrimination were sealed.

An Isolated Occurrence or an Industry- Wide Problem? The allegations made against Morgan Stanley are not new to the securities indus- try. Several previous cases, in addition to statistics produced by the Securities Industry Association (SIA), indicate that sex discrimination is a per sis tent prob- lem on Wall Street.

In April 2004, Merrill Lynch agreed to pay $2.2 million to Hydie Sumner as part of a class- action lawsuit brought by more than 900 women claiming the fi - nancial giant had a long history of gender discrimination. Sumner wanted her old job back; she also said that she wanted to be a Merrill Lynch manager in order to make changes at the fi rm. “I thought, one day, I’ll be a manager and I’ll have a choice, and I won’t manage like him [Stephen McAnally, former manager of the Merrill Lynch San Antonio offi ce],” said Sumner. As of early 2005, Merrill Lynch paid Sumner $1.9 million but was fi ghting the other $300,000, indicating that this payment would “not be considered until the issues relating to Ms. Sumner’s reinstatement at the fi rm are resolved.”

In a more recent lawsuit, Stephanie Villalba, former head of Merrill Lynch’s private client business in Eu rope, sued for $13 million on gender- bias charges. She claimed that her male boss had diffi culty accepting her in a se nior position and, as a result, she was “bullied, belittled, and undermined.” In early 2005, an employment tribunal in the United Kingdom ruled in favor of “Villalba’s claim of victimization on certain issues, that included bullying e-mails in connection with a contract, but found no evidence of a ‘laddish culture’ at the bank.” Villalba intends to appeal the ruling.

In February 2004, Susanne Pesterfi eld, a former broker for Smith Barney, settled her case with the investment fi rm on the eve of an arbitration hearing.

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She alleged that during her seven years at the fi rm she endured a “pattern of sex- ual harassment and a male- dominated culture that included trips to strip clubs.” She described a working environment that was “hostile to women and in which women weren’t given the same opportunities to succeed as men were given.” She claimed that her male colleagues were better paid and received better leads for potential clients.

Pesterfi eld’s accusations were not new to Smith Barney. A class- action law- suit brought by female employees in 1996 led to a 1998 settlement in which the fi rm’s parent company, Citigroup, Inc., paid out close to $100 million. The infamous case has been referred to as the “Boom- Boom Room,” in reference to the base- ment “party room” in the Garden City branch of what was then Shearson Lehman Brothers, wherein discrimination and sexual harassment occurred. Among other things, the conversations that took place among the male employees went beyond their accomplishments on the trading fl oor to include their latest accomplishments in the bedroom. Shearson’s manager took a “boys will be boys” approach that encouraged obscene comments and lewd behavior.

In her book, Tales from the Boom- Boom Room, Susan Antilla provides a de- tailed account of the workplace culture at Shearson. According to Antilla, “it was a time when men in branch offi ces of brokerage fi rms were encountering signifi - cant numbers of female colleagues for the fi rst time. For some of them, it was unsettling.” In the late 1990s, many well- educated women entered the fi nancial ser vices industry in hopes of fi nding great opportunities. Instead, they found an industry that continued to be dominated by white males and an environment that belittled and repressed women.

The acts of alleged sex discrimination abound; nearly 3,000 women fi led claims in 1996 and 1997 against Smith Barney and Merrill Lynch. Although most of the women settled, some did not, including Nancy Thomas, Sonia Ingram, Laura Zubulake, Deborah Paulhus, and Neill Sites. Perhaps most notable is the case of Nancy Thomas, a broker at Merrill Lynch for 18 years. Among the numer- ous allegations of sex discrimination made by Thomas, one is particularly sala- cious. Thomas alleges that in 1991 “someone left her a package in the mailroom with a dildo, lubricating cream, and an obscene poem.” An arbitration hearing was held in New York on September 13, 2004; arbitrators scheduled an additional 18 hearing sessions through July 2005. Merrill Lynch maintained that none of the testimony given as of late November 2004 “support[ed] even one of Thomas’s allegations.”

Wall Street’s Glass Ceiling— The Numbers Tell the Story The 2003 Report on Diversity Strategy, Development & Demographics pro- duced by the SIA presents data suggesting there has been little improvement in the advancement of women in the securities industry in recent years, and that biased pay and promotion practices are not just outdated. Even though Wall Street fi rms seem to be making attempts to improve the workplace environment for women, statistics prove that a strong glass ceiling still exists. There was a gradual decrease in the percentage of women in the industry between the years

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1999 and 2003 (43% and 37%, respectively), and management positions in 2001 and 2003 continued to be dominated by white males. In 2003, white males held 85% of (branch) offi ce manager positions, 76% of the managing director positions, and 79% of the executive management positions. This compares to 85%, 81%, and 75% for the three position categories in 2001. The same is true for line positions such as brokers (80% in 2001 versus 78% in 2003), investment bankers (77% versus 71%), and traders (71% versus 74%). On the other hand, “white women and men and women of color continue to comprise the majority (89%) of the staff and ju nior level positions.”

These numbers become even more disturbing when one considers that women are not new to the profession. In 1974, women held 33.8% of all securi- ties industry jobs with 6.5% being management positions. Muriel F. Siebert, chair of Muriel Siebert & Co. and the fi rst woman with her own seat on the New York Stock Exchange, has worked on Wall Street since the 1950s. She claims that highly educated and successful women are consistently “dropping out” of the industry and changing careers because they feel they have no chance of reaching top management positions.

Catalyst, a nonprofi t research or ga ni za tion working to advance women in business, conducted a study of female professionals in the securities industry. Published in 2001 as Women in Financial Ser vices: The Word on the Street, the results indicated the top three barriers to women’s advancement were lack of mentoring opportunities, commitment to personal and family responsibilities, and exclusion from informal networks of communication. The survey also highlighted the differences in the viewpoints of male and female professionals with respect to the advancement of women. While 65% of women believed they had to work harder than men to get the same rewards, only 13% of men believed this to be true; 51% of women felt they were paid less than men for doing the same work, while only 8% of men agreed with this statement. In addition, 50% of men believed that women’s opportunities to advance to se nior leadership in their fi rms had increased greatly over the preceding fi ve years, but only 18% of women agreed. Many of the women who fi le complaints, as well as their lawyers, maintain that the perceptual divide between genders is a serious issue. They argue that the men in charge at Wall Street fi rms do not recognize the existence of a problem, and therefore they fail to look at the statistics and to see the “big picture.”

Mandatory Arbitration and Coercion Prevent Statistics from Appearing in Court In 1986, the Supreme Court ruled that sexual harassment is illegal under Title VII of the 1964 Civil Rights Act. However, recent statistics and settlements in gen- der discrimination suits suggest that the glass ceiling, at least within the securi- ties and investment banking businesses, still exists. What makes Wall Street such a laggard when it comes to the treatment and advancement of women? One factor could be that before 1999 any employee of a Wall Street fi rm was required to resolve all disputes in a “closed- door negotiation pro cess” rather than in a public hearing. As the rest of corporate America was hit with discrimination

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lawsuits in the 1980s and 1990s, the problems occurring on Wall Street remained, for the most part, behind closed doors. After the Boom- Boom Room case and the Merrill Lynch suit in the late 1990s, the Securities and Exchange Commis- sion removed the mandatory arbitration requirement for Wall Street employees who had civil- rights claims. As a result, “the National Association of Securities Dealers and the New York Stock Exchange changed their arbitration rules in a way that permitted employees to sue under federal discrimination statutes in federal court.”

Why Should the Securities Industry Make Changes? Sex discrimination lawsuits have been costly, in terms of money and negative publicity, for securities fi rms. Avoiding such costs in the future is a strong motiva- tion for change, but not the only one. Another powerful reason is the increasingly infl uential role of women in business. In 1998, women owned close to 8 million U.S. businesses, which was one- third of the total, and “more than 40% of house- holds with assets of $600,000 or more [ were] headed by women.” In 2004, 10.6 million fi rms were at least 50% female- owned; 48% of all privately held fi rms were at least 50% female- owned.

Moreover, as more working women approach retirement age and younger women rise in the ranks, securities fi rms desire to increase their female clientele. As a result, there is an increasing demand for female brokers to serve the needs of this “new” client base. Women investors tend to prefer doing business with a friendly, trustworthy adviser rather than just a person with fi nancial expertise, and thus they aim to establish a personal relationship with their brokers/advisers. To serve an increasingly diverse client base, investment fi rms must recognize that they will need a diverse group of employees who recognize and react appropri- ately to the needs of their clients.

In 2013, one of the United States’ largest privately held life insurers, New York Life, recently announced its plans to hire up to 3,700 new agents with at least half being women or individuals representing (in the company’s own words) “cultural markets,” under which it includes individuals “serving the African American, Chinese, Hispanic, Korean, South Asian, and Viet nam ese markets.” This will be in addition to the 62% of new hires last year in those categories. Like publicly traded insurer Allstate, whose staff is made up predominantly by women (58.9%), New York Life understands that having a staff that represents a gender- and racially diverse subset is going to give it a better chance to grow its business.

Who Wins, Who Loses? Richard Berman, the judge in Schieffelin et al. v. Morgan Stanley, described the $54 million settlement as a “watershed event in protecting the rights of women on Wall Street.” Many others, including Elizabeth Grossman, an EEOC lawyer on the case, hope that the settlement will act as a revelation for not only Morgan Stanley but other Wall Street fi rms as well. The settlement may cause other fi rms within the securities and investment banking industry to reevaluate their pay and promo- tion practices. Additional complaints may also surface because of the settlement.

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Although some people view the settlement in a positive light, others see a negative side. As part of the settlement, claimants agreed not to disclose any of the statistics and facts that would have been presented in the case. Although the women who will share the $54 million settlement scored a big win, some people believe that Morgan Stanley and other securities fi rms “scored an even bigger win” by preventing embarrassing statistics from being revealed in the courtroom and to the public.

The securities and investment banking fi rms seem to have a “what the public doesn’t know, won’t hurt them” attitude. Unless the compensation and promotion statistics of those fi rms are exposed to the public, Wall Street businesses will continue operating within its current culture. In “Money Talks, Women Don’t,” an article about the Morgan Stanley settlement, Susan Antilla stated, “Ingrained cul- tural misconduct changes only when customers, colleagues, and the public get wind of the nasty facts and companies are embarrassed. Those who can afford to keep their problems quiet may never have to change.”

Today on Wall Street Some aspects of work on Wall Street have improved for women, but changing the culture of an entire industry cannot happen overnight, especially if fi rms are reluctant to admit that a problem exists. Antilla suggests that there has been re- luctance to address the discrimination and harassment issues even after they were revealed in the Boom- Boom Room and Merrill Lynch lawsuits of the late 1990s: “When it came to acknowledging that there was still a problem to work on—violators to stop and biases to correct— Wall Street had become a little like the dysfunctional family hiding the crazy uncle in the attic. Everyone knew sexual harassment was there and indeed had put much energy into urgently and quietly negotiating the crises that resulted from it. But hardly anyone spoke openly about the problem— called the doctor, if you will— and started the real work of making things better.”

Today, fi rms are more likely to have diversity programs and sexual harassment training. Many companies have altered their recruiting pro cesses and several have established partnerships with support organizations that promote equal opportunities in professions for women and minorities. Some companies are working at changing the “tone at the top” by promoting women to top positions and challenging old attitudes within the companies. For example, in late 2002 Smith Barney hired its fi rst woman chief executive, Sallie Krawcheck. Since then, the company has fi red some of its most successful brokers for mistreating female coworkers, thereby sending a message that such behavior will not be tolerated— even in the most valued employees. Despite these efforts, the industry statistics and continual lawsuits suggest that women in the fi nancial ser vices industry are not playing on a level playing fi eld quite yet.

Indeed, as one Wall Street observer, Dan Ackman, a columnist for Forbes magazine, noted, “beyond the numbers, nearly every woman on Wall Street will tell you there are, to this day, subtle and not- so- subtle double standards and a still pervasive atmosphere of harassment.” And as the business writer John Churchill

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reports, “Many complainants claim the fi rms have just become subtler in their discrimination, rigging teams, for instance, so that when men retire or change fi rms, the most lucrative accounts they leave behind get assigned to other mem- bers of the old- boy network, not to the most se nior broker in the offi ce.” Conse- quently, the most important question with respect to sexual discrimination in the securities and investment banking industry may be: What must happen in order for a true and pervasive cultural change to take place on Wall Street?

Questions for Discussion 1. Is business ethics relevant to the topic and examples in this case or is this just

business as usual? Explain. 2. What are the ethical implications of the one- time arbitration requirement that

prevented Wall Street employees from seeking redress through the court system?

3. Why is the securities and investment banking business male- oriented and dominated?

4. Why does sex discrimination seem to persist on Wall Street in spite of the negative publicity of lawsuits and monetary costs of settlements?

5. What can or should be done to transform the per sis tent culture of sex discrimination on Wall Street?

6. Would you like working on Wall Street as a woman? Explain. 7. As a man or woman, what lessons would you take from this case if you

accepted a professional job in a Wall Street fi rm?

Sources This case was developed from material contained in the following sources:

Ackman, D. (July 14, 2004). How Schieffelin beat the street. Forbes.com. http:// www .forbes .com /careers /2004 /07 /14 /cx _da0714topnews .html, accessed February 13, 2005.

Allen, E. (April 24, 2004). San Antonio woman wins Merrill Lynch suit, becomes voice for discrimination. Knight Ridder Tribune Business News, 1.

Antilla, S. (August 9, 2004). In the companies of men: A rash of gender- discrimination suits suggests the Morgan Stanley payout may be only the beginning. NewYorkMetro.com. http:// newyorkmetro .com /nymetro /news /people / columns /intelligencer /9580 /, accessed February 13, 2005.

Antilla, S. (November 29, 2004). Merrill’s woman problem: What men didn’t know. Bloomberg.com. http:// www .bloomberg .com /apps /news ?pid =10000039 & sid = aLk _r1Imn86Y & refer= columnist _antilla, accessed February 15, 2005.

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Notes

1. The “Millennials” are coming: Morley Safer on the new generation of American workers. (November 17, 2007). CBSNews.com. http:// www .cbsnews .com /stories /2007 /11 /08 /60minutes /main3475200 _page2 .shtml, accessed January 7, 2014.

2. A conversation with Neil Howe, part I— Changes in the workforce. (April 14, 2008). http:// studenthousingguy .blogspot .com /2008 /05 /conversation -with -neil -howe -part -i .html, accessed February 3, 2014.

3. Bank, D. (n.d.). Encore colleges. http:// www .civicventures .org /communitycolleges /Encore _Colleges .pdf, accessed January 7, 2014; also see the MetLife Foundation web site: http:// www .metlife .org .

4. U.S. Department of Labor (DOL). (2004). DOL annual report, fi scal year 2004— performance and accountability report. Strategic Goal 1: A Prepared Workforce. http:// www .dol .gov /_sec /media /reports /annual2004 /strat _goal1 .pdf, accessed January 7, 2014.

5. Media advisory: Policy summit—“The Workforce Mosaic.” ( July 6, 2011). PRNews- wire. http:// www .prnewswire .com /news -releases /media -advisory -policy -summit - - -the -workforce -mosaic -125070149 .html, accessed February 20, 2012; Conlin, M. (April 2, 2001). Job security, no. Tall latte, yes. BusinessWeek, 62– 64. Many of these trends are also found in the 2008 online editions of Data Dome research ( http:// datadome . com), and the McKinsey and Rand reports. Also see James O’Toole and Edward Lawler III. (2006). The new American workplace. New York: Palgrave Macmillan.

6. Bank, op. cit. Based on the discussion of Tapscott, D. (1996). The digital economy, 296– 303. New York: McGraw- Hill; Washburn, E. ( January– February 2000). Are you ready for generation X? Physician Executive, 26(1), 51– 56.

7. Tapscott, op. cit., 301; Howe, N. (2000). Millennials rising. New York: Vintage Books. 8. Bureau of Labor Statistics (BLS). (February 1, 2012). Employment projections:

2010– 2020 summary. BLS.gov. http:// www .bls .gov /news .release /ecopro .nr0 .htm, ac- cessed February 20, 2012; Hedge, J. W., Borman, W. C., and Lammlein, S. E. (2006). The aging workforce: Realities, myths, and implications for organizations. Washington, DC: American Psychological Association.

9. Ewing, W. (February 2012). The Future of a Generation, How New Americans Will Help Support Retiring Baby Boomers. American Immigration Council. http:// www .aarp .org /content /dam /aarp /livable -communities /learn /demographics /the -future -of -a -gener ation -how -new -americans -will -help -support -retiring -baby -boomers -aarp .pdf, accessed February 3, 2014.

10. Beard, J. Biggs, D. Bloom, L. Fried, P. Hogan, A. Kalache, and S. Olshansky, eds. (2011). Global Population Ageing: Peril or Promise. Geneva: World Economic Forum.

11. Ibid.; Davidson, G., Lepeak, S., and Newman, E. (February 2007). The impact of the aging workforce on public sector organizations and mission. IPMA- HR. http:// unpan1 .un .org /intradoc /groups /public /documents /IPMA -HR /UNPAN025894 .pdf, accessed February 20, 2012.

12. Washburn, op. cit., 51– 56; Howe, op. cit.; Mui, N. (February 4, 2001). Here come the kids: Gen Y invades the workplace. New York Times, sec. 9, p. 1, col. 3.

13. National Association of State Trea sur ers (NAST) Foundation. (n.d.). Silent gen- eration (born between 1926– 1945). Tomorrow’s Money. http:// www .tomorrowsmoney .org /Templates /tm /Content .aspx ?id=2148, accessed January 7, 2014.

14. Rabinowitz, D. (December 2012). When men were men and women wore gir- dles. WSJ.com. http:// online .wsj .com /news /articles /SB1000142412788732446160457819 1492784955084, accessed January 7, 2014.

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15. Kaye, B. ( January 1, 2012). Four generations: Develop and engage them at work. Leadership Excellence, 20.

16. Ibid. Boomers statistics (2012). Boomers Web. http:// www .boomersweb .net /Baby -Boomers -Statistics .htm, accessed February 20, 2012.

17. Gallup. (2013). The 2013 state of the American workplace, employee engagement insights for U.S. business leaders, p. 36. http:// www .gallup .com /strategicconsulting /163007 /state -american -workplace .aspx, accessed January 7, 2014.

18. Ibid., p. 42. 19. CIGNA. (March 2, 2004). Benefi ts of 401(k) plans may be lost on new “millennial”

generation; CIGNA survey fi nds 401(k)s fail to engage America’s youn gest workers. PRNewswire. http:// www .prnewswire .com /news -releases /benefi ts -of -401k -plans -may -be -lost -on -new -millennial -generation -cigna -survey -fi nds -401ks -fail -to -engage -americas -youngest -workers -58740182 .html, accessed January 7, 2014. See also: The echo boomers. (December 6, 2004). CBSNews.com. www .cbsnews .com /stories /2004 /10 /01 /60minutes /main646890 .shtml, accessed January 7, 2014.

20. Pricewater houseCoopers (PWC). (2013). PwC’s NextGen: A global generational study 2013. Summary and compendium of fi ndings. http:// www .pwc .com /en _US /us /people -management /publications /assets /pwc -nextgen -summary -of -fi ndings .pdf, accessed Jan- uary 7, 2014; Ethics Resource Center (ERC). (2013). Generational diff erences in workforce ethics, p. 2. Arlington, VA: ERC.

21. The Institute of Management and Administration. (October 2003). Generation Y creates new challenges for A/E fi rm managers. Design Firm Management & Administration Report, 3(10), 4.

22. Gallup, op. cit., 36. 23. Weiss, J. (2000). Or ga ni za tion behavior and change, 2nd ed., 18– 23. South- Western

College Publishing. Brack, J. (2012). Maximizing millennials in the workplace. UNC Kenan- Flager Business School. http:// www .kenan -fl agler .unc .edu /executive -develop ment /custom -programs /~ /media /DF1C11C056874DDA8097271A1ED48662 .ashx .

24. This section is based on, but not limited to, Marston, C. (2007). Motivating the “What’s in it for me?” workforce, ch. 9. Hoboken, NJ: John Wiley and Sons.

25. Ibid., 146. Balance requires negotiation and negotiation is facilitated by knowing the expectations, attitudes, and needs of the employee as well as the requirements and resources of the or ga ni za tion.

26. Gallup, op. cit., 42. 27. BLS. (May 2012). Women as percent of total employed in selected occupations,

2011. BLS.gov. http:// www .bls .gov /opub /ted /2012 /ted _20120501 .htm, accessed January 7, 2014.

28. BLS. (February 2013). Women in the labor force: A databook. http:// www .bls .gov /cps /wlf -databook -2012 .pdf, accessed January 7, 2014.

29. BLS. (March 2011). Labor force participation rates by country. BLS.gov. http:// www .bls .gov /spotlight /2011 /women /, accessed January 7, 2014.

30. BLS. (February 1, 2012), op. cit.; UNC. ( January 18, 2011). UNC researchers spot six demographic trends that will transform the US. TechJournal. http:// www .techjournalsouth .com /2011 /01 /unc -researchers -spot -six -demographic -trends -that -will -transform -the -us /, accessed February 20, 2012; Jamieson, D., and O’Mara, J. (1991). Managing workforce 2000: Gaining the diversity advantage. San Francisco: Jossey- Bass.

31. Sakai, K. (August 2011). Times are changing: Gender and generation at work and at home. Families and Work Institute. http:// www .familiesandwork .org /times -are -changing -gender -and -generation -at -work -and -at -home /, accessed March 3, 2014.

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32. NCHRP Report 685. (2011). Strategies to attract and retain a capable transportation workforce, p. 2. Google Books. http:// books .google .com /books ?id=bEYhDZsZIdoC & pg =PA2 & lpg =PA2 & dq=It+is+projected+that+by+2016 ,+women+will+ %E2 %80 %9 Cearn+60 %25+of+bachelor %E2 %80 %99s ,+63 %25+of+master %E2 %80 %99s+and+54 %25 +of+doctorate+and+professional+degrees & source=bl & ots=v18 _9dqx28 & sig= 8UGYen KzLE2wzO67oGNgUYdbCSg & hl=en & sa=X & ei=UbkPU4yCCMu _kQf EpIGwBw & ved= 0CCcQ6AEwAA #v=onepage & q=It %20is %20projected %20that %20by %202016 %2C %20women %20will %20 %E2 %80 %9Cearn %2060 %25 %20of %20bachelor %E2 %80 %99s %2C %2063 %25 %20of %20master %E2 %80 %99s %20and %2054 %25 %20of %20doc torate %20and %20professional %20degrees & f=false, accessed March 3, 2014.

33. Wellington, S., Brumit Kropf, M., and Gerkovich, P. ( June 2003). What’s holding women back? Harvard Business Review. http:// hbr .org /2003 /06 /whats -holding -women -back /ar /2, accessed February 17, 2014.

34. Ibid. 35. ACLU. Windsor v. United States: Edie Windsor challenges DOMA. https:// www

.Aclu .org /lgbt -rights /windsor -v -united -states -thea -edie -doma, accessed April 22, 2014. 36. Ibid. 37. Westfall, L. Looking beyond DOMA: The Eff ects of United States v. Windsor on

Federal Tax Law. ABA Section of Taxation Quarterly. http:// www .kslaw .com /image server /KSPublic /library /publication /2013articles /11 -5 -13 _ABA _Tax _NewsQuarterly .pdf, accessed April 22, 2014.

38. Ibid. 39. Ahuja, Masuma, and Chow, Emily. ( June 2013). Same- sex marriage status in the

U.S. WashingtonPost.com. http:// www .washingtonpost .com /wp -srv /special /politics /same -sex -marriage /, accessed January 7, 2014.

40. National Conference of State Legislatures (NCSL). (February 13, 2012). Same- sex marriage, civil unions and domestic partnerships. NCSL.org. http:// www .ncsl .org /issues -research /human -services /same -sex -marriage -overview .aspx, accessed February 20, 2012.

41. Belge, K. ( January 26, 2012). Where can gays legally marry? LesbianLife.About.com. http:// lesbianlife .about .com /cs /wedding /a /wheremarriage .htm, accessed February 20, 2012.

42. Ibid. 43. The Human Rights Campaign (HRC), a gay- positive civil rights agency work-

ing for equal treatment for persons of all sexual orientations, has a web site with links to descriptions of same- sex marriage and civil union laws in each U.S. state ( http:// www . hrc .org) .

44. NCSL. ( July 26, 2013). Defi ning marriage: Defense of marriage acts and same- sex marriage laws. NCSL.org. http:// www .ncsl .org /issues -research /human -services /same -sex -marriage -overview .aspx, accessed January 7, 2014.

45. Statistics. (2012). UnmarriedEquality.org. http:// www .unmarried .org /statistics .html #dpbenefi ts, accessed February 20, 2012; BLS. (March 2011). Employee benefi ts in the United States– March 2011. BLS.gov. http:// www .bls .gov /news .release /ebs2 .nr0 .htm, accessed February 21, 2012; Baker, K. (February 13, 2012). Domestic partners can fi nd benefi ts on healthcare .gov, but site needs additional fi lters. ThinkProgress. http:// think progress .org /lgbt /2012 /02 /13 /424548 /domestic -partners -can -fi nd -benefi ts -on -health caregov -but -site -needs -additional -fi lters /?mobile=nc, accessed February 21, 2012.

46. Llopis, Glenn. (September 17, 2013). America’s demographic and 7 ways leaders can leverage it. Forbes.com. http:// www .forbes .com /sites /glennllopis /2013 /09 /17 /americas -demographic -shift -and -7 -ways -leaders -can -leverage -it /, accessed January 7, 2014.

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47. Llopis, Glenn. (May 12, 2012). Big data shows the growing infl uence of Hispanics will change business models. Forbes.com. http:// www .forbes .com /sites /glennllopis /2012 /12 /05 /big -data -shows -the -growing -inf luence -of -hispanics -will -change -business -models /, accessed January 7, 2014.

48. Roberts, S. (August 14, 2008). Minorities in U.S. set to become majority by 2042. NYTimes.com. http:// www .nytimes .com /2008 /08 /14 /world /americas /14iht -census .1 .15284537 .html, accessed February 21, 2012.

49. Bandow, D. (September 16, 2013). Immigration benefi ts the U.S., so let’s legalize all work. Forbes.com. http:// www .forbes .com /sites /dougbandow /2013 /09 /16 /immigration -benefi ts -the -u -s -so -lets -legalize -all -work /, accessed January 7, 2014.

50. Ibid. 51. Census: White majority in U.S. gone by 2043. ( June 13, 2013). NBCNews.com.

http:// usnews .nbcnews .com /_news /2013 /06 /13 /18934111 -census -white -majority -in -us -gone -by -2043 ?lite, accessed January 7, 2014.

52. Ibid. 53. Ibid. 54. Ibid. 55. UNESCO Institute of Statistics. (2011). Global trends in secondary education.

Global Education Digest. http:// southasia .oneworld .net /resources /global -trends -in - secondary -education, accessed February 21, 2012.

56. Ibid.; Altbach, P., Resiberg, L., and Rumbley, L. (2009). Trends in global higher edu- cation: tracking an academic revolution. Paris: United Nations Educational, Scientifi c, and Cultural Or ga ni za tion. http:// unesdoc .unesco .org /images /0018 /001831 /183168e .pdf, accessed February 21, 2012.

57. Bersin, Josh. (December 10, 2012). Growing gap between what business needs and what education provides. Forbes.com. http:// www .forbes .com /sites /joshbersin /2012 /12 /10 /growing -gap -between -what -business -needs -and -what -education -provides /, accessed January 7, 2014.

58. McKinsey & Company (2012). Education to employment: Designing a system that works. McKinsey & Company. http:// mckinseyonsociety .com /downloads /reports /Education / Education -to -Employment _FINAL .pdf, accessed January 7, 2014.

59. World Economic Forum (WEF). (2012). The global gender report 2012. Geneva: WEF. http:// www3 .weforum .org /docs /WEF _GenderGap _Report _2012 .pdf, accessed January 7, 2014.

60. World facts and statistics on disabilities and disability issues (2012). Disabled World. http:// www .disabled -world .com /disability /statistics /, accessed February 21, 2012.

61. Ibid.; Eckberg, J. (September 26, 2004). Disabled workers can solve shortfall. Cin- cinnati Enquirer. http:// www .enquirer .com /editions /2004 /09 /26 /biz _dailygrind0926 .html, accessed January 7, 2014.

62. See Best Companies for Multicultural Women. Working Mother. http:// www .work ingmother .com /best -companies. Survey results were compiled and summarized for the years 2007– 2011.

63. Radin, T., and Wehane, P. (April 2003). Employment- at- will, employee rights, and future directions for employment. Business Ethics Quarterly, 113– 130.

64. Fulmer, W., and Casey, A. (1990). Employment at will: Options for managers. Academy of Management Review, 4, 102.

65. Flynn, G. (2000). How do you treat the at- will employment relationship? Workforce, 79, 178– 179.

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66. Williamson, J., and Kleiner, B. (2003). New developments concerning the cove- nant of good faith and fair dealing. Management Research News, 35– 41.

67. See Autor, D., Lii, J. D., and Schway, S. (May 2004). The employment consequences of wrongful- discharge laws: Large, small, or none at all? American Economic Review, 440– 446.

68. Fulmer and Casey, op. cit., 102. See also Williamson and Kleiner, op. cit., 35– 41. 69. Lousig- Nont, G. (April 2003). Seven deadly hiring mistakes. Supervision, 85– 88. 70. For a discussion of these issues, see Awney, R. (1920). The acquisitive society, 53– 55.

New York: Harcourt, Brace & World; Reich, C. (1964). The new property. Yale Law Review, 73, 733; also the Supreme Court case Perry v. Sindermann.

71. Boatright, J. (2000). Ethics and the conduct of business, 3rd ed. Upper Saddle River, NJ: Prentice Hall, 265.

72. Rowan, J. (April 2000). The moral foundation of employee rights. Journal of Busi- ness Ethics, 24, 355– 361.

73. Ibid., 358. 74. Jacoby, S. (1995). Social dimensions of global economic integration. In Jacoby,

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75. Choi, J.T. ( June 2004). Transformation of Korean HRM based on Confucian Values. Seoul Journal of Business, 10(1), 1– 26. http:// s -space .snu .ac .kr /bitstream /10371 /1785 /1 /SJBv10n1 _001 .pdf ?origin=publication _detail, accessed February 5, 2014.

76. Hiroshi, O. (2010). Lifetime employment in Japan: Concepts and mea sure ments. Journal of the Japa nese and International Economies, Elsevier, 24(1), 1– 27.

77. Velasquez, M. (1998). Business ethics, 4th ed., 439–440. Upper Saddle River, NJ: Prentice Hall.

78. Bureau of Labor Relations. ( January 22, 2014). Usual weekly earnings of wage and salary workers fourth quarter 2013. BLS.com. http:// www .bls .gov /news .release /pdf /wkyeng .pdf, accessed February 27, 2014.

79. National Committee on Pay Equity. (February 18, 2014). Wage gap is stuck. http:// www .pay -equity .org /, accessed February 27, 2014.

80. McAlister, Z. ( January 27, 2012). Apple CEO responds to reports of inhumane working conditions for factory workers. Financial Post. http:// business .fi nancialpost .com /2012 /01 /27 /apple -ceo -responds -to -reports -of -inhumane -working -conditions -for -factory -workers /? _ _lsa=4e95 -3a3f, accessed February 27, 2014.

81. Hackman, R., Oldham, G., Jansen, R., et al. (Summer 1975). A new strategy for job enrichment. California Management Review, 17, 56– 58.

82. Bjork, L. (March 1975). An experiment in work satisfaction. Scientifi c American, 232(3), 17– 23; also, Simmons, J., and Mares, W. (1983). Working together. New York: Knopf.

83. DeGeorge, R. (1990). Business ethics, 3rd ed. New York: Macmillan; Ewing, D. (1977). Freedom inside the or ga ni za tion: Bringing civil liberties to the workplace. New York: McGraw- Hill.

84. “Just cause” guideline. (n.d.). Hawaii State AFL- CIO. http:// www .hawafl cio .org /J -coz .html, accessed January 7, 2014; Just cause: Using the seven tests. (n.d.). UEUnion. com. http:// www .ranknfi le -ue .org /stwd _ jstcause .html, accessed January 7, 2014.

85. Meyers, D. (1988). Work and self– respect. In Beauchamp, T, and Bowie, N., eds., Ethical theory and business, 3rd ed., 275– 279. Upper Saddle River, NJ: Prentice Hall.

86. Anderson, T. (May 2001). Elsewhere in the courts . . . Security Management, 45, 105.

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87. Werhane, P. (1985). Persons, rights and corporations, 118. Upper Saddle River, NJ: Prentice Hall.

88. DesJardins, J., and McCall, J. (1990). A defense of employee rights. Journal of Busi- ness Ethics, 4, 367– 376.

89. Ibid. 90. Zall, M. (May– June 2001). Employee privacy. Journal of Property Management, 66,

16– 18. 91. Beauchamp and Bowie, op. cit., 264. Also see ch. 5 in the 6th edition (2001), also

published by Prentice Hall. 92. Post, J., Lawrence, A., and Weber, J. (1999). Business and society, 9th ed., 378. Bos-

ton: McGraw- Hill. 93. Dalton, D., and Metzger, M. (February 1993). Integrity testing for personnel se-

lection: An unsparing perspective. Journal of Business Ethics, 12(2), 147– 156. 94. Carroll, A. (1993). Business and society: ethics and stakeholder management, 3rd ed.,

371–372. Cincinnati: South- Western. 95. Samuels, P. (May 12, 1996). Who’s reading your e-mail? Maybe the boss. New York

Times, 11; also Guernsey, L. (December 16, 1999). On the job, the boss can watch your every online move, and you have a few defenses. New York Times, G1, 3. Also for a list of specifi c rights, guidelines, and web sites regarding telephone, computer, and (e-)mail mon- itoring, see: Privacy Rights Clearing house. Employee mentoring: Is there privacy in the workplace? http:// www .privacyrights .org /fs /fs7 -work .htm .

96. Ibid. 97. Bennett, S. (November 14, 2013). 88% of brands will use social media marketing in

2014. MediaBistro. https:// www .mediabistro .com /alltwitter /smm -2014 _b51733, accessed February 27, 2014.

98. Laviano, C. (November 16, 2011). Internet ethics: Managing social media at work. Talent Management. http:// talentmgt .com /articles /view /internet -ethics -managing -social -media -at -work /print:1, accessed March 3, 2014.

99. Martin, J. (March 1999). Internet policy: Employee rights and wrongs. Human Resources Focus, 13, 76.

100. Ibid. 101. Zall, op. cit., 18. 102. Adams, S. (February 5, 2010). The state of the offi ce romance, 2010. Forbes.com.

http:// www .forbes .com /2010 /02 /05 /workplace -love -sex -leadership -careers -affairs . html, accessed February 21, 2012.

103. Fisher, A. ( June 7, 2013). Why your offi ce romance is your employer’s business. CNN Money. http:// management .fortune .cnn .com /2013 /06 /07 /offi ce -romance /, accessed January 7, 2014.

104. DesJardins and McCall, op. cit., 204– 206. 105. Goldstein, R., and Nolan, R. (March– April 1975). Personal privacy versus the

corporate computer. Harvard Business Review, 53(2), 62– 70. In addition to these guidelines, another source that provides drug testing guidelines is Bernardo, M. (1994). Workplace drug testing: An employer’s development and implementation guide. Washington, DC: Institute for a Drug- Free Workplace.

106. For an updated list of mandatory guidelines for federal workplace drug testing programs, see the Substance Abuse and Mental Health Ser vices Administration of the U.S. Department of Health and Human Ser vices’ Mandatory guidelines for federal workplace drug testing programs at http:// edocket .access .gpo .gov /2008 /pdf /E8 -26726 .pdf, accessed January 7, 2014.

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107. Wagner, J. (May 7, 2013). EEOC fi les and settles its fi rst GINA- based employment discrimination. Genomics Law Report. http:// www .genomicslawreport .com /index .php /2013 /05 /13 /eeoc -fi les -and -settles -its -fi rst -gina -based -employment -discrimination -lawsuit -on -may -7 -2013 /#more -12768, accessed January 7, 2014. For an updated dis- cussion on ge ne tic nondiscrimination legislation, visit the National Human Genome Research Institute’s web site: http:// www .genome .gov .

108. See Wagner, J. (May 7, 2013), footnote 107. 109. DesJardins and McCall, op. cit., 213. 110. There are several web sites to view updated employee, consumer, and employer

right- to- know legislation and information across industries and products. These include http:// www.ombwatch.org and http:// enviro .blr .com .

111. Proposal to Reduce Smoking. (2006). http:// www .hereandok .com /Reduce Smoking .htm, accessed February 3, 2014.

112. There are several web sites that update smoking and other workplace facts, legis- lation, and research. http:// www .workplacelaw .net /search ?s=smoking. See American Non- Smokers Rights Foundation. ( January 2, 2014). Overview list–how many smokefree laws? http:// www .no -smoke .org /pdf /mediaordlist .pdf, accessed February 28, 2014.

113. Kent, M. (February 2011). Not all Americans are smoking less. Population Reference Bureau. http:// www .prb .org /Articles /2011 /us -smoking -trends .aspx, accessed February 21, 2012; Eisenberg, M., Ranger- Moore, J., Taylor, K., Hall, R., et al. (February 2001). Workplace tobacco policy: Progress on a winding road. Journal of Community Health, 26, 1, 23.

114. Ibid. 115. Karr, A., and Guthfi eld, R. ( January 16, 1992). OSHA inches toward limiting

smoking. Wall Street Journal, B1. 116. Wilson, R. (October 29, 2013). Awaiting FDA, states pursue their own e-cigarette

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