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Employment-at-Will; Making Ethical Decisions with Potential Legal Effects

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Running Head: EMPLOYMENT-AT-WILL; MAKING ETHICAL DECISIONS WITH POTENTIAL LEGAL EFFECTS

Employment-at-will: Ethical Decisions with Potential Legal Effects
Rosalyn S Hicks
Leg 500 Law, Ethics and Corporate Governance
Professor Augustine Weekly
November 2nd, 2013

As the Chief Operating Officer, it is essential that the needs of the company be examined, strategies be devised and a plan to execute these strategies be developed. Managing day to day operations of the organization requires an open and honest relationship with the Chief Executive Officer. Staying on top of production quotas is just one area that the COO ventures into.
Preparing for an Initial Public Offering, IPO, requires knowledge of personnel issues, identifying emerging markets and identifying operational risks and environmental sustainability. The first sale of stock to the public has to be backed by the assurance that the organization is growing in a positive direction so that the shareholders are confident in their investments. As the COO of a company trying to go public, recognizing that this move requires being regulated by the Securities and Exchange Commission (SEC), is an important step in growing the company.
Addressing internal issues is the first step in preparing for the first IPO. Personnel issues, such as an employee’s public dissatisfaction with some facet of the company operations could do the company great harm. How the COO handles employee concerns or behaviors will also give investors insight into how well the company is ran and if they feel comfortable purchasing stock through the organization.
Several situations have to be addressed before moving forward. Some dealing with company policy on social media postings, company equipment use policies and how the employment-at-will doctrine affects how these concerns will be addressed. It may seem fitting to get rid of any and all potential setbacks to the company’s goal of going public because of the employment-at-will doctrine but this is not how it all works.
The employment-at-will doctrine, in general gives the employer the right to terminate an employee that has not contract for “good cause, bad cause or no cause at all” (Muhl, 2001). There are exception to this doctrine that have to be examined on a case by case basis when dealing with personnel problems. Let’s take a look at some examples and how the employment-at-will doctrine will play a part in the situation because all terminations under this doctrine are “technically comply with the employment-at-will requirements, do not seem just”

John, for some reason is dissatisfied with actions of a very important investor to the company. He wanted to vent about the situation and did so on ‘his’ page on a social media site. The issue here is would a termination of the employee be suitable, yet legal because John posted this discontent on his private time outside of work. The rant was against an individual that is a significant part of the company’s continued success. This public rant could have negative effects if the customer is made aware of the situation and the employee is not disciplined or terminated. However, although this is an employment-at-will position, because this act was committed on a personal account, terminating John could violate sections of the National Labor Relations Act (NLRA) that in one form or another address an employee’s right to free speech. Firing John would have to be based on more than this one action. Proof of other solid violations of clear company policies would have to be provided.
Jim suggesting a boycott is a direct example of the “right to self-organization” (National Labor Relations Act, ch: 7), covered under section 7 of the NLRA. Although Jim’s suggestions are in poor taste, this is an internal issue that can be addressed with other alternatives other than termination. There may very well be a need to address the commission and bonuses in the Sales department.
Ellen starting a blog protesting the CEO’s bonus and stating that “no one” has received a raise could be false information. Ellen does not know the salaries of every employee and if the information that is contained in her blog is read by potential investors they may be hesitant to invest citing low job satisfaction because of the suggested stalemate salaries. At-will employment also means that an employer can alter “the terms of the employment relationship with no notice” (at-will presumption). No exception to employment-at-will doctrine would cover this behavior. Resorting to name calling on a blog intended to speak negatively about the company is grounds for termination. If Ellen would have filed a claim at the state level about worker compensation instead of blogging about it all, then there could not be a termination based solely on this act.
Bill using company issued equipment for personal use is a direct violation of company policy. In this case, his termination would be covered on the grounds of his employment-at-will and the employer’s right to relieve the employee of their duties. The only legal issue is if there is a contract for a specific amount of time and that time has not expired. The company’s legal team should review the contract to ensure that they are operating lawfully by terminating Bill.
Secretaries protesting keylogger software on company computers by wearing black and white stripes is not grounds for termination and could cause legal action if attempted. This is a quiet declaration of their dissatisfaction with the new security measure. The company has the right to protect its assets by checking to see if their employers are being productive.
Although Joe has the right to privacy, it is negated when he uses company equipment to perform personal tasks. Company policy reserves the rights to all equipment and information contained within. Yes Joe can be terminated. However, caution has to be used because Joe has already been disciplined for the act. Any termination without another violation could be considered retaliatory and grounds for a lawsuit against the company.
After speaking with the department supervisor and then the secretary, it would be the supervisor being terminated for suggesting that his secretary perform illegal acts. Because of the move to prepare for the first IPO, this kind of behavior reflects negatively on the company, causes adverse actions by potential shareholders and could lead to violations of policies of the SEC.
Anna’s boss wishing to fire her violates the public policy exception of the employment-at-will doctrine which clarifies that “under the public-policy exception to employment at will, an employee is wrongfully discharged when the termination I against an explicit, well-established public policy of the State”. Jury duty is clearly considered a “court ordered, civil obligation. Anna should not be fired and the boss should be told why this action was taken.
In order to protect the employees that wish to see the company continue to grow in an ethical manner I suggest a whistleblower policy be adopted. The Sarbanes-Oxley Act (Halbert, Ingulli, p.63 2012), is an act that prohibits any public company from discriminating against any employee who lawfully provides information or otherwise assists in an investigation of conduct that the employee “reasonably believes” constitutes a violation of the federal securities laws. Sarbanes-Oxley only provides protection of an employee reporting cases of possible securities fraud. A whistleblower policy will assist in easing the minds of the employee if they feel that current procedures by another employee or employees are destructive and they choose to come forward. In the whistleblower policy, there should be provisions that cover someone reporting racially biased hiring practices, reporting theft of company property and clear and concise instructions of who should be made aware of the concerns.

References

Halbert, T., & Ingulli, E. (2012). Law & ethics in the business environment (7th ed.). Mason, OH: South-Western Cengage Learning.
Muhl, Charles J (2001) The employment-at-will doctrine: three major exceptions Retrieved from http://www.bls.gov/opub/mlr/2001/01/art1full.pdf

http://www.deloitte.com/view/en_US/us/Services/audit-enterprise-risk-services/b9733d359eca6210VgnVCM200000bb42f00aRCRD.htm
http://www.nlrb.gov/resources/national-labor-relations-act

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