2. © Prentice Hall, 2001 250-759 Social Responsibility of Business Prepared by W. L. Dougan

3. © Prentice Hall, 2001 Chapter Three The Ethical Treatment of Employees Ethical Theory and Business, 8 th Edition Tom L. Beauchamp, Norman E. Bowie and Denis Arnold

4. © Prentice Hall, 2001 3 Topics for Chapter 3 Employment at Will Risk information and workplace hazards Whistle-blowing

5. © Prentice Hall, 2001 Werhane and Radin Principle of EAW IN absence of law or contract, employers have right to hire, promote, demote or fire whomever and whenever they please Prima facie hiring at will In US for employees not covered by union agreement, legal statute, public policy or contract, employers may dismiss employees “for good cause, for no cause or for causes morally wrong without being guilty of legal wrong 4

6. © Prentice Hall, 2001 Principle of EAW Difference between public sectior employees and private sector employees 5

7. © Prentice Hall, 2001 Due process Means by which an employee can appeal a decision in order to get an explanation of the action and an opportunity to argue against it 6

8. © Prentice Hall, 2001 Reasons for EAW Proprietary rights of employers would be violate by elimination of EAW EAW treats employee and employer rights equally When taking a job, an employee commits to many conditions including loyalty and at-will conditions Extending due-process rights to the workplace interferes with efficiency and productivity Legislation and/or regulation of employment relationships undermine an overregulated economy 7

9. © Prentice Hall, 2001 Proprietary rights of employers would be violated by elimination of EAW Difference between persons and labor Productivity as property However persons can be distinguished between their possessions (a corporation) but persons cannot be separated from their working Also, treating an employee in an at-will fashion is similar to treating that employee as property 8

10. © Prentice Hall, 2001 EAW treats employee and employer rights equally Freedom of contract EAW limits freedom of contract However, freedom of contract violates BOTH employee and employer rights 9

11. © Prentice Hall, 2001 An employee commits to many conditions including at-will conditions However, the conditions of loyalty, trust and respect, to be valid, should pertain to both parties Equal obligation and mutual restriction 10

12. © Prentice Hall, 2001 Extending due-process rights to the workplace interferes with efficiency and productivity Employer must have ability to fire inefficient employees Due process is costly and time-consuming Workers can give up some basic rights for money Workers implicitly agree in exchange for higher wages However, this assumes that two previous points are true 11

13. © Prentice Hall, 2001 Legislation and/or regulation of employment relationships undermine an overregulated economy However, procedural and substantive due process are consistent with the ability to fire employees 12

14. © Prentice Hall, 2001 Due process in public versus private employees Public employees have need to due process because of the political influences on their jobs EAW could undermine public welfare in case of a public employee SO, if public employees should have these rights, why wouldn’t private employees have them as well? 13

15. © Prentice Hall, 2001 Richard Epstein “In Defense of Contract at Will” Public action in favor of protection of employees is increasing EAW works to the mutual benefit of employer and employee 14

16. © Prentice Hall, 2001 Three dominant standards for evaluation of a doctrine Intrinsic fairness Effects on utility or wealth Distributional consequences 15

17. © Prentice Hall, 2001 Intrinsic fairness of EAW Freedom to contract as an end in itself Desire to determine conditions of employment is as basic as marriage or religion We should not limit freedom to engage in any of these without explicit justification Limits on freedom of contract already protect a large number of conditions Force Fraud Diminished capacity 16

18. © Prentice Hall, 2001 Effects OF EAW on utility or wealth Difficult to assume that employees would typically enter into contracts that are not beneficial to them Employee can use contractual rights to control firm, too. Real issue is not how to minimize employer abuse, but to how to maximize the gain from the relationship 17

19. © Prentice Hall, 2001 Effects of EAW on utility or wealth (continued) EAW helps firm to bear the risk of inappropriate employee behavior Firm use of EAW is controlled by the risk of loss of reputation, this is not as much an issue for employees Employee is given a right to many choices with EAW EAW allows employee to sample employment conditions EAW is cheap to administer 18

20. © Prentice Hall, 2001 Distributional consequences Difficult to imagine how changes in EAW can more equitably distribute value Diminishing of EAW would have negative consequences on employee shareholders (pension plans) 19

21. © Prentice Hall, 2001 20

22. © Prentice Hall, 2001 Worker Safety Bill of Rights The right to know. The right to be warned. The right to independent expertise. The right to refuse unsafe work. The right to shutdown unsafe operations. The right to refuse to pollute. The right to participate equally in occupational health and safety matters through joint committees with trained representatives. Source: Canadian Labour Congress

23. © Prentice Hall, 2001 Worker Safety Bill of Rights The right to expeditious enforcement. The right to be compensated. The right to obtain relevant employment data to support valid scientific studies related to health and safety. The right to open a contract and to strike over health and safety issues. The right to health and safety training. The right of unions to have intervenor status in coroner’s inquests and similar tribunals. The right to first aid in emergencies. Source: Canadian Labour Congress

24. © Prentice Hall, 2001 “The Right to Risk Information and the Right to Refuse Workplace Hazards” Ruth R. Faden and Tom L. Beauchamp Worker right to information Be informed about exposure Medical records Worker right to refuse hazardous work Worker right to help determine workplace standards

25. © Prentice Hall, 2001 Right to know What determines “right to know” standard? Reasonable person standard Serious hazards may require individual disclosure Subjective standard Idiosyncratic information may require different standard Combination

26. © Prentice Hall, 2001 Right to Risk Information Right-to-know balance Employer perspective Protection of trade secrets important Employee perspective Need to be informed Right to know has little effect without power to change situations

27. © Prentice Hall, 2001 Right to change situation Proposed standards for employee exit from a hazardous situation: Good-faith subjective standard – Requires only that the worker honestly believe that a health hazard exists. Reasonable person standard – Requires that the belief be reasonable under the circumstances that a health hazard exists. Objective standard – Requires evidence, usually from an expert, that a threat exists.

28. © Prentice Hall, 2001 Managing Workplace Hazards TRAINING is important to Giving the employees the right information so they can make informed decisions Topics should include: Education about the workplace hazards present Employee rights and how to exercise these rights

29. © Prentice Hall, 2001 “The Nature of the Worker’s Right to Know” Thomas O. McGarity Employer reluctance to inform employees Paternalistic concern for the employee’s health and well being. Lack of employee education or training to put the risk information to use. Informed employees will likely demand higher wages and/or safer working conditions.

30. © Prentice Hall, 2001 Worker’s Right-to-Know Competing moral and practical considerations Autonomy Fairness Utility/Efficiency Innovation Paternalism

31. © Prentice Hall, 2001 Michael Davis “Some Paradoxes of Whistle-Blowing” Standard Theory of Whistle-Blowing Problems (paradoxes) in standard theory Less paradoxical theory Test of new theory 30

32. © Prentice Hall, 2001 Standard Theory of Whistle- Blowing Justified acts Permitted by morality Required by morality Morally permitted and required for other reasons This paper is about moral justification Definition Revealing something not known Intention to prevent something bad To gain information through being trusted Doesn’t reveal information for self-benefit Reveals what organization doesn’t want revealed 31

33. © Prentice Hall, 2001 Standard Theory of Whistle- Blowing (continued) Disloyalty is morally permitted when Organization to which whistleblower belongs will do serious harm Whistle-blower has identified a threat of serious and considerable harm, reported it and concluded that the report would have no effect Whistle—blower has exhausted all internal recourse Whistle-blower has evidence that would convince a reasonable, impartial observer Whistleblower has reason to believe that revealing the threat will prevent harm at reasonable cost Based on a moral requirement to prevent harm 32

34. © Prentice Hall, 2001 Three paradoxes Cost of whistle-blowing provides no justification for central cases of whistle blowing Ambiguity in the term “serious and considerable harm” Prevention of “harm” instead of “moral wrong” means the conditions meeting standards of whistle-blowing are narrow 33

35. © Prentice Hall, 2001 Complicity theory Complicity presupposes wrong, not harm Creates a more compelling obligation 34

36. © Prentice Hall, 2001 Complicity Theory There is a moral obligation to reveal information to the public when 1. What you reveal derives from your work in an organization 2. You are a voluntary member of that organization 3. You believe that the organization has engaged in serious moral wrongdoing 4. You believe that your work for that organization will contribute to the wrong if you do not reveal the information 5. You are justified in beliefs 3 and 4 6. Beliefs 3 and 4 are true 35

37. © Prentice Hall, 2001 Complicity versus Whistle- blowing Condition 1 means revealer not a spy Voluntary participant means revealer is not coerced Condition 3 means moral wrong, not harm Condition 4 does not require prevention, only belief that behavior is wrong Condition 5 requires truth revealer to be justified and correct about moral wrong Complicity does not require going through channels No circumstances of morally permitted, but not required with complicity theory 36