Compliance Risk Assessment Fall 2016 Class 7 Stephen Paine .docx

Compliance Risk Assessment
Fall 2016 Class 7
Stephen Paine
Jay Holtmeier, Guest Lecturer
Compliance Risk by Area:
Anti-Corruption and Insider Trading
Recap of Class 1
Pfizer Case Study and Compliance Risks
Legal and Regulatory Incentives/Conflicts of
Interest
Political Failure of Controls
Reputational Recidivism
Point of Sale/Distribution
Definitions
Compliance Risk is the risk of failing to comply with applicable
legal or regulatory requirements resulting in a material loss
(financial or reputational) or legal/regulatory sanction
A Compliance Risk Assessment is a framework to enable the
evaluation and analysis of the overall Compliance risk (both
inherent risks and control effectiveness) associated with a
particular business area

Recap of Class 2
The Five Elements of an Effective Compliance Program
Tone at the Top
Enron Chronology: July 1985 Enron established through merger
and by November 2006 entire senior management team has
either been indicted or convicted with Enron and Arthur
Andersen no longer operating
Corporate Culture and Communication
Codes of Conduct set the values for employees to follow and
those values are based on Compliance Risk.
3. Compliance Risk Assessment
4. Testing and Monitoring
5. Chief Compliance Officer
Case Study: HSBC
Financing drug cartels
Permitting sanctioned regimes to process dollar payments
Claw back of compensation (including Compliance Officers)
Criminal charges for “failure to maintain an effective AML
program”
Recap of Class 3
Compliance Tools/Controls
Advisory Function

Coverage of Front Office and Technology, Finance and
Operations
Conflicts of Interest -- A Deep Dive
Conflicts of interest are inherent in the financial services
business
Historical success of the industry has been managing these
conflicts by eliminating or disclosing them
Top to bottom review of business operations to address conflicts
of interest of every kind
Risk Assessments
Follow-Up
Policies and Procedures
Education and Training
Compliance Surveillance and Business Unit Review and Testing
‹#›
Recap of Class 4
A Compliance Risk Assessment is a framework to enable the
evaluation and analysis of the overall Compliance risk (both
inherent risks and control effectiveness) associated with a
particular business area
1. Identifying Business Area(s) and Metrics
2. Mapping Applicable Rules
3. Identifying Key Compliance Risks and Themes

4. Defining a Controls Inventory
5. Rating Control Effectiveness
6. Determining Residual Risks
7. Scoring, Rating and Reporting
It’s All About the Questionnaire . . .
Compliance Risk Assessment Steps
Identify Business Area and Metrics
Map Applicable Rules
Identify Key Compliance Risks & Themes
Define Controls Inventory
Rate Controls Effectiveness
Determine Residual Risk
Score, Rate and Report

Phase 2 of the Course
Assignments
Listen carefully in class as assignments will be based on
material from the sector presented.
Sector Risk
Listen and assimilate the material/lecture through the lens of the
types of risks each of the areas present, as well as the
corresponding controls – the 3/4 central boxes of the CRA
Diagram
Be a proactive listener and ask questions or provide comments
Make notes of questions that you have or comments to discuss
later
Compliance Risk Assessment Steps
Identify Business Area and Metrics
Map Applicable Rules
Identify Key Compliance Risks & Themes
Define Controls Inventory

Rate Controls Effectiveness
Determine Residual Risk
Score, Rate and Report
Recap of Class 5
Financial Services Regulation
Banking Services
Deposit Taking
Lending
Fund Transfers, checking
Securities and Investments
Buying and selling stocks, bonds
Participating in Capital Markets transactions
Investment Advisory Activities
Investment Company Activities
Federal Reserve, OCC, SEC, FINRA and CFTC, plus Exchanges
FINRA Regulatory Regime
Supervision
Self-Reporting

Case Study: Prospectus Delivery
‹#›
Recap of Class 6
Anti-Money Laundering and Financial Crime Risk and Controls
Anti-Money Laundering
Rule Mapping: Bank Secrecy Act, USA PATRIOT Act, EU
Directives Proceeds of Crime Act
Elements: Proceeds of crime used in banking system
Inherent Risks of Clients – Client Lifecycle (Onboarding,
Processing Transactions, Refreshing Information)
Geographical Location
Type of Client
Products and Services
Client Identification serves as the primary control: KYC --
Client Due Diligence and Enhanced Due Diligence
Sanctions
Rule Mapping: OFAC, United Nations and EU Directives
Elements: Penalties imposed by one country on one or more
other countries/individuals
Client Screening as a control
Anti-Bribery and Corruption (ABC)
To be covered in Class 7
Suspicious Transaction Reporting
Filing a report with the appropriate regulatory authority when
suspicious activity is identified

Strictly prohibited to disclose the filing of the report to parties
involved
‹#›
Compliance Risk by Area: Focus on Anti-Corruption
With Guest Lecturer Jay Holtmeier
Jay Holtmeier is a partner in Wilmer Hale’s
Litigation/Controversy Department, and a member of the
Investigations and Criminal Litigation Practice Group. He co-
leads the firm's Foreign Corrupt Practices Act and Anti-
Corruption Group and is a member of the Dodd-Frank
Whistleblower Working Group. He joined the firm in 2004.
Mr. Holtmeier's breadth of experience as a litigator includes
service as a federal prosecutor, a senior in-house attorney and a
lawyer in private practice. Mr. Holtmeier represents institutions
and individuals in complex government and internal
investigations and matters of corporate governance and
compliance. He has particular expertise in matters involving the
Foreign Corrupt Practices Act (FCPA).
In FCPA matters, Mr. Holtmeier has represented clients in
government and internal investigations involving conduct in
Europe, Asia, the Middle East, Africa, Latin America and
Australia. He regularly counsels clients facing difficult FCPA
issues in a variety of business contexts, and he has assisted
clients in numerous industries in developing and implementing
FCPA compliance programs.
Assignment 5
Assignment 5 for October 19: Identify and rank the financial

crime risk areas for two of the businesses in your financial
services company. Explain how the controls of KYC,
transaction monitoring and SAR reporting mitigate these risk
areas. Be prepared to hand in this assignment at the beginning
of class on October 19.
Identify 2 business areas. You can choose businesses at the
division level or more specific business areas under the division
level.
Then explain how the three controls mitigate Financial Crime
Compliance risks in these two business areas.
2-3 pages
‹#›
Tone at the Top Update
October 12, 2016 Resignation of CEO
New CEO Appointed
October 18, 2016 News Story about prior fraud warning
Compliance Risk by Sector:
Insider Trading

What is Inside Information?
15
Relates to the securities of an issuer
Not publicly known
Has not been disseminated in a manner reasonably designed to
provide broad, non-exclusionary distribution of the information
to the public
Material
It has “market significance” (likely to affect the market price of
any outstanding securities of the issuer)
A reasonable investor would consider the information important
in deciding whether to purchase, hold or sell a security
Would be viewed by a reasonable investor as having
significantly altered the total mix of information made available
to holders of securities
Inside information is also known as material, non-public
information (or “MNPI”).
What is Material?
16
There is no statutory definition of materiality – it is determined
according to caselaw, with significant room for judgment.
Courts routinely reject bright-line mathematical tests for
materiality
Both quantitative and qualitative factors can be relevant to
materiality (5% rule of thumb)
Information may be material even if it relates to future,
speculative, or contingent events. When events are contingent

or speculative, the test for materiality depends upon a balancing
of both the probability that the event will occur and the
anticipated magnitude of the event in light of the totality of the
company activity (the “probability/magnitude test”).
Examples of Material Information
17
A planned offering of securities
Mergers, acquisitions, purchases or sales of assets, refinancing,
joint ventures
Calls of securities, repurchase plans, stock splits or changes in
dividends
Earnings estimates, changes in previously released earnings or
estimates
Changes in ratings of debt securities
Expansion or curtailment of operations
New products or discoveries or developments regarding
customers or suppliers
Changes in control or in management

Writedowns of assets, additions to reserves
Defaults on securities, bankruptcy or receivership
What is Insider Trading?
Buying or selling a security
With intent to deceive
In breach of fiduciary duty or other relationship of trust
While in possession of MNPI about the security
What is Insider Trading?
Legal Conduct
Corporate insiders (officers, directors, and employees) buy and
sell stock in their own companies during open trading windows

When corporate insiders trade in their own securities, they must
report their trades to the SEC
Illegal Conduct
Buying or selling a security, in breach
of a fiduciary duty or other relationship of trust and confidence,
while in possession of material, nonpublic information about the
security
19
Legislative History
No specific prohibition on Insider Trading – prohibitions from
various statutes and caselaw.
Section 10(b) of the Securities Exchange Act of 1934 and Rule
10b-5 promulgated thereunder
Prohibits fraud in connection with a purchase or sale of
securities
Rule 14e-3
Prohibits trading when you have MNPI about a tender offer, if
you got that information directly or indirectly from someone
involved in the tender offer
Section 16
Insider liability for short-swing profits (purchase/sale within 6
months)
Regulation FD
Prohibits selective disclosure by companies
20
Theories of Insider Trading
Classical
Corporate insider (e.g., board member, executive)
Owes fiduciary duty
Breaches fiduciary duty by trading on MNPI

Misappropriation
Corporate outsider (e.g., Lawyer)
Trusted with MNPI in confidence
Breaches a duty owed to the source of the information
Tipping
Trading on MNPI received as a tip from insider or
misappropriator in exchange for a personal benefit
21
Why is insider trading prohibited?
Ensure a level playing field
Transparency and integrity of the financial markets
Inspire investor confidence that the financial markets are not
“rigged”
Unfairness of insider trading gains for those with informational
advantage
Keep the US financial markets among the most respected in the
world
Illegal Insider Trading in the News
23

Insider Trading: Controls
What is the primary control for handling inside information?
Information Barriers
And how are information barriers managed?
The Control Room
Insider Trading
What is the Control Room?
26
What does the Control Room do?
The Control Room is a central function that monitors the Bank’s
Information Barriers and the flow of inside information
throughout the Bank
The functions of the Control Room related to Information
Barriers include:
27

Development and maintenance of the Bank’s Information
Barrier policies and procedures
Maintenance of the Bank’s Watch and Restricted Lists and
approving Wall Crossings
Monitoring the integrity of the Bank’s Information Barriers
(i.e., surveillance of Firm, Employee and Client trading
activity)
Reviewing Equity and Fixed Income research for companies that
may appear on the Watch List or Restricted List
Pre-clearance of private side employee personal account trades
and certain Firm trades
Providing ongoing advice and training on matters related to
inside information and information barriers

Private Side vs. Public Side
28
Above The Wall
Private Side
Investment Banking Department
Public Side
Equities and Fixed Income Sales and Trading
Capital Markets
Research
Private Banking
Asset Management
Shared Services functions with no access to Inside Information

Internal Audit
Asset Backed Origination
Structured Lending
Solution
s Partners
Private Equity
Shared Services functions with access to Inside Information
Prime Services

Inside Information Barriers
Manage the flow of inside information to prevent its inadvertent
spread and misuse
Restrict the sharing of inside information from employees on
the “private side” of the Bank (e.g., those employees working in
an investment banking or origination capacity) to employees on
the “public side” of the Bank
Consist of:
Policies & Procedures
Physical Barriers
Electronic Barriers
Monitoring
Training
29
Control Room Notification Procedures
Information Barrier policies generally require all employees to
proactively notify the Control Room of activities that have

resulted in (or likely will result in) the receipt of Inside
Information
Employees must also inform the Control Room when they learn
of material developments associated with an existing
assignment or situation
This includes Inside Information received outside the ordinary
course of business, such as:
from a company or business that the employee or the Bank does
not cover or intend to do business with
from a friend or other social or professional acquaintance
from being the unintended recipient of the information (for
example, as a result of overhearing another conversation)
30
Watch List
The Watch List is a confidential list of issuers with respect to
which the Firm possesses inside information that has not yet
been publicly disclosed, or for which a transaction has not been
publicly announced
Enables the Control Room to monitor sales, trading and research
activities in a subject company’s securities, and to validate the
integrity of the Firm’s information barriers

Generally does not impact the sales, trading and research
activities of the Firm, except in limited circumstances
The Watch List is not published and can only be accessed by the
Control Room
31
Restricted List
The Restricted List generally reflects pending transactions in
which the Firm is involved that have been publicly announced
and in which we may have, or appear to have, inside
information
The Restricted List also may be used for other regulatory
purposes (e.g., to comply with the trading restrictions imposed
by Reg. M or by the tender rules, Section 16, or if we own a
large position or are an affiliate of the company)
The Restricted List limits certain marketing, research and
trading activity that could constitute misuse of inside
information or otherwise appear to be improper
The Restricted List is available to all employees via an internal
web page as well as via direct feeds to trading systems and
market data screens
32

Wall Crossings
Wall Crossing procedures must be followed when
communicating inside information to public side (i.e. sales,
trading and research) employees
All Wall Crossings require:
Prior approval by a designated senior executive;
Prior approval by an appropriate senior business line manager (a
“Conduit”) of the person being brought over the wall; and
Consultation with a member of the Control Room
33
Insider Trading: Surveillance
Overview
Monitor Firm, client and employee trading activity in the firm’s
divisions
Covers all products including equities, debt, derivatives and
bank loans
Types of reports include:
Restricted List

Watch List
Over The Wall
Research Frontrunning
Restricted List Lookbacks
Watch List Lookbacks
External Deals
35
Scope of Control Room Monitoring
36
Product Coverage
Equities, equity-related securities and related derivatives
Fixed Income securities and related derivatives
Bank Loans and related derivatives

Investment Banking
Private Banking & Wealth Management
Business Divisions
Account Types
Restricted List
Watch List
Wall Crossings
Bank deal lookbacks

Non-Bank deal lookbacks
Watch List lookbacks
Research front-running
Firm (proprietary, client facilitation, hedge)
Institutional Clients
Private Banking Clients
Discretionary Portfolios
Asset Management Funds
Deal Types

Review Criteria – What The Control Room Looks For
Restricted List Reports
Whether the type of trading activity that occurred (e.g., firm vs.
client activity, trading without approvals, etc.) represents a
violation of the Restricted List
Over The Wall Reports
Trading activity by an employee (for the Bank, client or their
own personal account) in a security for which he or she is
currently over the wall
Watch List/Lookback Reports
Trading activity by employees on the private side of the Inside
Information barrier (Above The Wall personnel, Capital

Markets, etc.)
Trades by employees who are Conduits for or are part of the
same group as wall crossed individuals
Trades by clients who have been wall crossed (e.g., through
Market Sounding)
Activity that deviates from known trading strategies (e.g., larger
than normal trade size, holding positions when they are
normally liquidated at end of day)
Timely trades with significant profit potential
37
What Does the Control Room Want to Know About?
If an employee receives Inside Information
Trading activity while in possession of Inside Information (by
employees, clients or the firm) or merely the appearance of
(e.g., well timed trades)
Breaches of Information Barriers through the use of electronic
communications or otherwise
Business changes that may invoke Information Barrier,
Conflicts of Interest or Large Shareholding concerns (new
businesses, reporting lines, physical location, booking systems,
etc.)
Transactions that where the firm would own 3% or more of a
public company’s equity securities (including through the use of

derivatives)
Disclosure of personal accounts and pre-clearance of trades
Disclosure of outside business activities and directorships
38
Escalation Criteria – What We Do With Our Findings
Breaches by Employees (Restricted List, Information Barrier
policies)
If following internal review an employee was found to have
improperly directed trading or solicited/tipped a client in
violation of CS policy, then standard misconduct, disciplinary
and escalation procedures would apply
In cases of perceived or actual Insider Trading by an employee,
Bank would contact the relevant regulator directly (in addition
to filing a Suspicious Activity Report)
Potential Insider Trading by Clients
A fortuitous, well-timed trade alone would not lead to an SAR
filing—it would require the presence of additional factors, such
as:
Reason to believe the client had access to Inside Information
(e.g., as part of a market sounding exercise, inadvertent email,
etc.); or
A potential connection exists between the client and the parties

involved in the deal (e.g., a principal of the client is on Board
of a target company or affiliate); or
A pattern of the client trading ahead of other deals with a
common link (e.g., same company, advisor, law firm, etc.)
39
Insider Trading Controls: Personal Account Trading
Employee Personal Account Trading
1
Minimum holding periods apply and, where applicable, are
subject to pre-clearance (generally good until end of trading
day).
An Employee account:
Is an account that has brokerage capability in which an
employee has an interest or the power to influence investment
decisions
Includes employee’s spouse, partner and minor children
Trading is generally not permitted in securities of issuers on the

Restricted List.
Bank securities may only be traded during approved windows
and with pre-trade approval, where applicable.
Many regulators require banks to monitor the personal trades of
their employees.
In most jurisdictions1, employees are required:
To declare their trading account details to Compliance
To receive pre-trade approval for certain transactions
41
Insider Trading: Other Related Risks
Discussions with the Buyside
Discussions between private-side bankers and buy-side clients
(e.g., hedge funds) implicate insider trading risk

Private-side bankers have access to MNPI that cannot be shared
with buy-side investors
Risk that buy-side investors are “fishing” for information about
companies or specific transactions
Banks may limit these discussions, or require internal approvals
and discussion guidelines (i.e., industry discussions only)
Expert Networks
The investigation of the Galleon/Raj Rajaratnam case
highlighted the risk posed by “expert networks”
Expert networks connect investor clients with experts paid for
information and insight in the expert’s area of expertise
Risk that expert networks will share MNPI with investors using
their services
Banks/investors may limit use of expert networks by requiring
certifications (e.g., no inside information) and qualifications

(e.g., has not been an officer/director/access employee of a
public company for a period of time)
Market Sounding
Market sounding refers to certain communications with
prospective investors prior to the formal launch or
announcement of a transaction or offering
Such communications are intended to gauge investor interest in
a transaction
In some cases, market sounding may involve providing potential
investors with MNPI
Confidentiality agreements and trading restrictions may be
required
Safeguarding Confidential Information

Private side Bank employees will come into possession of the
most sensitive information.
What practical steps should be taken to protect it?
Avoid discussing confidential information in public places
Avoid leaving sensitive information on voicemail or with
administrative assistants
Working off premises, must ensure that you keep information
secure
Ensure emails are sent to the correct address and with the
correct attachment(s)
“Clean-Desk” Rule - In the workspace, avoid leaving
confidential information exposed and ensure that when you
leave your office or cubicle you have stored sensitive
documents in a secure location.
Case Study: Merck Insider Trading
Do you think Merck includes insider trading in its annual

compliance risk assessment?
Why or Why not?
Should every public company have controls for this?
What could Merck have done to implement controls to prevent
this?
What about Bank of New York/Mellon?
‹#›
Assignment 4
Assignment was announced as not graded and will not be
recorded as a grade
Your assignment was; however, scored to give you a better
sense of your progress and my expectations.
Grade Distribution:
Excellent (E):3
Good (G):10
Satisfactory (S):6
Poor (P):3

‹#›
Assignment 6
Draft notes and questions for an interview with the Head of the
Head of Mergers and Acqusitions in the Investment Banking
Division of your financial services company（Morgan Stanley）
for a Compliance Risk Assessment of Insider Trading.
Develop an interview for the Head of Mergers and Acquisitions
relating to insider trading and Rule 10b-5
The Mergers and Acquistions Department advise companies on
who are either(1) looking to acquire another company or(2) are
the target of being acquired. These transactions present
challenges as the mere fact that a company is about to be
acquired can radically impact the stock price and trading of
both companies.
Your interview should include a list of questions but also
include notes about potential answers that could require
require follow-up
I want to see how well you understand the concepts of insider
trading and your ability to transpose the concepts presented in
class into a Compliance Risk Assessment situation. You can

include questions that relate to both risks and controls.
This is your first full questionnaire assignment and while there
was a request to see an example of a questionnaire, giving an
example now might compromise the learning component of this
exercise.
‹#›
In various occupations, workers may be prohibited from exercisi
ng certain rights that, outside the workplace, cannot (or, perhap
s, should not) berestricted. At the same time, it has been argued
that some behaviors may be restricted by some employers, even
when the worker is not atwork, or their off-
duty activity or conduct. This can lead to difficult conflicts bet
ween employer and employee, as well as among employees.Here
we will look at some restrictions that may be imposed to invest
igate to which rights restrictions employees can and cannot obje
ct. We willbegin this discussion by looking at a real-
life incident involving employee activity outside of the workpla
ce.
In September 2012, a number of paramedics were placed on adm
inistrative leave by their employer for working for another com

pany. Thecompany, American Medical Response Incorporated (
AMR) of Connecticut, provides emergency medical care (ambul
ances, paramedic services,etc.). The suspended paramedics were
working for another company, Valley Emergency Medical Servi
ce (VEMS).
AMR argued that suspension was appropriate because the other
company was a competitor, both companies having bid on a serv
ice contract.The paramedics, in response, argued that being susp
ended was a violation of their rights, and began preliminary wor
k toward a lawsuit underConnecticut's Unfair Trade Practices A
ct.
What can and cannot any company control about what their emp
loyees do when they are not actually at work? AMR argued that
theparamedics were aware that they could not work for a compet
itor; the paramedics claimed that AMR could not legally prevent
them from doingso outside of the work they did for AMR.
4.1 The Issue: Restricting Employees' Rights as a Condition of
Employment
The case involving the AMR employees is one example of the ki
nd of conflict that arises in the workplace. Those who are in pos
itions ofmanagement and those who work for management often
have very different views of what is justified, in terms of what
one can do with one'stime off the job. As is so often the case in
ethical disputes, few if any would accept the extremes here. For

instance, probably no one wouldargue that salaried employees m
ust do everything their bosses tell them; that would amount to s
omething along the lines of one's bossdictating that worker's lif
e. At the same time, just as few would argue that salaried emplo
yees can do whatever they wish, regardless of theeffect on the c
ompany for which they work. It is in between these extremes tha
t tensions arise, and where the rights of the employers must bew
eighed against the rights of the employees.
At-Will Employment
Workers are said to be at-
will employees, meaning an employer does not need to show ca
use for terminating the worker in question, whenthey are not pro
tected by union contracts, civil service law, or other such provis
ions. They can be fired for any reason that does not conflictwith
the law, and the employer is not obligated to show why the emp
loyee was fired.
There are some restrictions on at-
will employment: employees cannot be fired for their race, relig
ion, or sex/gender. They cannot be fired forinforming on a comp
any's illegal activity ("whistleblowing"), or for exercising certai
n rights such as taking maternity leave, voting, jury duty, orserv
ing in the military.
In general, the burden is on the employee to show that the termi
nation was unjustified, given the standard assumption that, unle
ss madeexplicit at the time of hire, the worker is an at-

will employee.
Conflicts of Commitment and Interest
The story about the paramedics raises a specific question of whe
ther an employer can prevent employees from working other job
s (sometimescalled moonlighting.) Often, companies develop po
licies that restrict outside employment, and these policies comm
only focus on whether or notthe outside employment generates a
conflict of commitment, or a conflict of interest. Outside work
that generates either type of conflict (or,obviously, both) would
be prevented. While this language is often seen in university pol
icies for faculty, the basic idea is applicable to manyother conte
xts.
Conflict of commitment refers to outside work that, for one reas
on or another, prevents an employee from doing his or her job a
s it should bedone. For instance, if a full-
time teacher has another part-
time job that prevents him from getting work returned to student
s on time, createsan increase in absences from the full-
time job, or harms other aspects of the job, a conflict of commit
ment is present. The presumption here isthat the employee's mai
n job takes priority and should not suffer due to other work. If it
does, that generates a conflict of commitment. Manyuniversitie
s impose strict policies regarding how many hours one can com
mit to outside work.
Conflict of interest refers to outside work that is for a company

in competition with a person's employer. Imagine someone doin
g research fordrug company A who is doing similar research for
drug company B. Any discoveries or advances that the research
er makes for company A mightbe given to company B. This clea
rly indicates the researcher potentially has a significant conflict
of interest; again, many universities and otherresearch organiza
tions, for this very reason, have strict policies against work that
may even possibly lead to a conflict of interest.
The fundamental question to consider here is what rights an emp
loyer has to restrict what employees do in their free time, or wh
en "off-
duty."Consider the following examples; which do you think are
legitimate policies for an employer to impose on an employee?
·
No employee can contribute to Facebook pages that criticize the
company.
·
Any employee who is determined to have a drinking problem wi
ll be terminated.
·
No employee can publish material without the company's approv
al.
·
Any employee determined to be committing adultery will be ter
minated.

· No employee can run for political office.
·
Any employee who uses a product sold by a competitor will be t
erminated.
· No employee is allowed to purchase or view pornography.
As we saw, many employees fall under the category of "at-
will employees," employees who may be terminated without cau
se. The details ofthis vary by state; in general, employees are "a
t-
will" if they are not working under a written contract; this exclu
des union members, federalgovernment employees, and any othe
r situation in which an explicit contract is in force. Clearly, it is
in the employer's interest to have thecompany's workers happy,
satisfied, and productive; a situation that employees perceive a
s unfair can interfere with that job satisfaction. At thesame time
, employees cannot insist on things that either violate the condit
ions of employment or prevent the company from operatingsmo
othly and profitably.
Consider, for example, an employee named Jim who published s
everal articles in the local newspaper that were sharply critical
of the thingsdone by the company for which he worked; he then
reproduced these articles on his website. There may have been s
ome merit to Jim'scomplaints, but airing those complaints in the
way Jim did not only damaged the company's reputation and its
standing in the community butalso provided a weapon for its co

mpetitors to use against it. For both reasons, the company's prof
its fell, and Jim was fired. Were his rightsviolated?
On the one hand, Jim was an at-
will employee, so the company wasn't obligated to justify his te
rmination. But even if it were so obligated, it isclear that Jim di
d not have the right to do the damage to the company he did, no
r to do it in the way he did. Preventing him from furtherharming
the company clearly outweighed whatever rights he might clai
m to free speech: His rights do not allow him to infringe upon t
he rightof the company to be profitable, and thus harm not just t
he company as a whole, but also those who continue to work the
re. Here is asituation where one's right to free speech clearly ca
n be restricted, and in the workplace, many such restrictions are
legitimate and justified inorder to protect the company's reputat
ion, its profitability, and its responsibility to its stockholders.
States have worked hard to carefully describe what employees
may legitimately do when not at work and what kinds of things
may beprevented. Some states have extensive statements that in
dicate precisely what can and cannot be stipulated by an employ
er as permissible off-
duty conduct; other states have considerably less detailed polici
es and legislation. Because the kinds of conflicts involved are re
latively common,state legislatures continue to develop these pol
icies, and what is and is not permitted has continued to change.
Some states that did not haveexplicit policies now have them, w

hile other states have made significant additions to the policies t
hey already have. Some states do not havesuch policies.
Conduct Codes
Employers often provide employees with conduct codes—
codes that stipulate clear guidelines and expectations of employ
ees regarding how theemployer expects employees to conduct th
emselves and do business. One notable and widespread example
concerns drug testing.
Increasingly, companies have required employees to be tested fo
r drug use. Many companies argue that this is a requirement for
havingresponsible, productive employees; other companies insis
t that because of the nature of the job, safety requirements dema
nd a clean and soberworkforce. Furthermore, companies that pro
vide services to the public that potentially carry some degree of
risk have demanded drug-freeemployees to minimize that risk.
Some employees, however, have argued that this is a violation o
f their rights. If a person does his or her job well, is there any re
ason to imposedrug tests on this employee? Is this an invasion o
f privacy? Indeed, some have suggested that company-
wide drug testing may be a violation ofthe Fourth Amendment.
That amendment states
The right of the people to be secure in their persons, houses, pa
pers, and effects, against unreasonable searches and seizures,sh
all not be violated, and no Warrants shall issue, but upon probab
le cause, supported by Oath or affirmation, and particularlydesc

ribing the place to be searched, and the persons or things to be s
eized. (U.S. Const. amend. IV)
Ed Andrieski/Associated Press
The legalization of marijuana in certain states has complicated t
heissue of workplace drug testing.
It is not entirely clear that a mandatory drug-
testing policy involves such"searches," or if they do, whether th
ey are reasonable in the context of thisamendment, particularly
without a warrant.
The questions become still more complex when one considers w
hether thedrugs used are legal or not. For instance, in Colorado,
it is legal, for those 21and older, to possess one ounce or less o
f marijuana. If an employee smokesmarijuana at home over the
weekend, can that employee be fired for using asubstance that is
legal? If so, would that justify firing an employee who smoked
cigarettes, clearly a hazardous substance, yet legal for adults to
purchase andconsume? Another issue may arise when considerin
g who offers services to thepublic that potentially poses risks to
that public: It may be clear in the case ofairplane pilots or cabd
rivers, but should heart surgeons and firefighters be drugtested?
Should elementary school teachers or parking lot attendants be
drugtested? Is there a "slippery slope" here, indicating that if so
me part of societyshould be tested, then perhaps everyone shoul
d be? One might then ask if asociety in which all its members ar

e subject to drug testing would be a societythat is consistent wit
h the Fourth Amendment or, more generally, with Americanvalu
es.
The Argument for Drug Testing
The standard argument for drug testing relies on several premise
s, mentioned above:
Employers have a right to get fair value from their workers.
Drug usage leads to higher workplace absenteeism, increased m
edicalcosts, higher turnover, and less productive workers.
Drug users have a higher accident rate and thus pose a risk to th
e public.
THEREFORE
Drug use drives up costs for the employee, in addition to the inc
reased risk to the public.
Employers are obligated to minimize costs and risks to the publi
c whenever possible.
To minimize these costs and risks, employers must be able to id
entifydrug users.
THEREFORE
Employers must have the ability to test employees for drug usag
e.
Of course, we might point out, in response to this argument, tha
t many—if not all—
of these things are also the result of alcohol abuse. Wemight tak
e this to justify testing for alcohol use (and abuse), or we might

see this as allowing employers too much leeway into investigati
ng thehabits of their employees. We might ask whether most pe
ople would be happy with employers (or politicians) setting stan
dards for reasonableconsumption of alcohol and determining wh
en that standard has been exceeded through random, mandatory
alcohol testing.
The Argument Against Drug Testing
The standard argument against drug testing relies on several pre
mises, also mentioned above:
Employees have a basic right to privacy.
Mandatory drug tests do not indicate reasonable suspicion or ca
use.
Random, mandatory drug tests are not "reasonable searches" in t
he sense of that term in the Fourth Amendment.
Drug tests indicate presence of a drug, not impairment.
Drug tests have a history of unreliability.
Drug tests are humiliating and invasive.
Tests that invade a person's privacy without probable cause are
not sufficiently reliable, are ineffective, and are humiliating, an
dshould not be permitted.
Mandatory drug tests do all of these things.
THEREFORE
Employers should not have the right to perform mandatory rand
om drug tests.
Naturally, proponents of drug testing do not accept this argume

nt, responding that the potential risk to the public far outweighs
any smallinconvenience to an individual employee. Furthermor
e, one indication of current drug use is past use, and it is clear t
hat drug use can generatesubstantial costs to a business. Of cour
se, one who objects to such drug testing might argue that an em
ployee's rights are not really subject to acost–
benefit analysis; if there is a presumed right to privacy, then tha
t right cannot be abridged even if it leads to higher costs.
Case Study
Drug Testing Welfare Recipients
The state of Florida proposed a law that would require those wh
o received funds from Temporary Assistance for Needy Families
(TANF, also known as "welfare") be tested for drugs; a person
who failed such a test would be ineligible to receive such payme
nts.
The law was appealed, and Eleventh Circuit Appeals Court rend
ered its verdict. Consider the following:
1.
If you were a judge, how would you rule on this case? Should re
cipients of these funds be subject to drug testing? What are your
reasons for deciding as you did?
2.
If these recipients should be drug tested, does it follow that any
one who receives such state funds (paid for by taxpayers) shoul
d besubject to mandatory drug testing? Why or why not?

3.
What differences do you see between requiring drug tests for we
lfare recipients and for employees in companies?
After answering these questions, you may find the Appeals Cour
t ruling of interest:
The only known and shared characteristic of the individuals wh
o would be subjected to Florida's mandatory drugtesting progra
m is that they are financially needy families with children. Yet,
there is nothing inherent to the conditionof being impoverished
that supports the conclusion that there is a "concrete danger" th
at impoverished individualsare prone to drug use or that should
drug use occur, that the lives of TANF recipients are "fraught w
ith such risks ofinjury to others that even a momentary lapse of
attention can have disastrous consequences." Thus, the State'sar
gument that it has a special need to ensure that the goals of the
TANF program are not jeopardized by the effectsof drug use see
ms to rest on the presumption of unlawful drug use. (Lebron v.
Secretary, Florida Department ofChildren and Families, 2013)
The court's entire ruling can be read at: http://www.ca11.uscour
ts.gov/opinions/ops/201115258.pdf.
Ethical Questions
As we might expect, employers and employees have sought to re
solve disputes over workforce drug testing by seeking a compro
mise on thebasic question. For instance, a company might propo
se to decrease the penalty for failing a drug test; a first-

time violation might lead to awarning, or mandatory drug couns
eling, a second-
time violation might lead to a suspension from work. Only for a
third violation would theemployee be terminated. Similarly, em
ployees, whether through a union or some other mechanism, mig
ht accept drug testing but require somedegree of cause, fewer te
sts, or more rigorous testing procedures to avoid false positives.
We might think there is a fairly sharp contrast between a utilitar
ian and a deontologist on this issue, particularly if we focus on t
he conflictbetween the right to privacy and the obligation to mi
nimize the risk to the public. Thus, a utilitarian could argue that
we may wish to respectthe individual's right to privacy, but that
right is outweighed by the much greater benefit provided by de
creasing the risk to which the public issubject. Thus, an air traff
ic controller's right to privacy is outweighed, for the utilitarian,
by the much greater need to make sure the flyingpublic—
and anyone else put at risk by an unstable controller—
is as safe as possible. The deontologist might respond that such
rights—
again,assuming there is some inviolable sense of privacy—
cannot be abridged due to some general, potential threat to the p
ublic, and certainly notwithout due cause for abridging that pers
on's rights.
But this dispute may seem more clear-
cut than it really is. After all, could a utilitarian argue that all o

f us have a right to privacy, and thus thatviolating that right for
one group of people could potentially violate the rights of all? I
f so, then we must determine where the greatest benefitlies: in p
rotecting the public's safety, or the rights of the individuals who
make up that public? We might ask, finally: What could a deont
ologistargue in order to defend mandatory, random drug testing?
Morality Clauses
All of us have moral principles and our standards of ethics; som
e of these may be informed by our religious values, our cultural
and ethnictraditions, our political views, and our exposure to m
oral philosophy, among many other influences. Employees have,
and try to live by, thesemoral principles, as do employers. As
may be obvious, the values involved may come into conflict. If
an employer has a strong set of moralprinciples, by which he or
she lives, can that employer ask employees to conform to those
principles, or at least not do things that wouldviolate them?
Consider Susan, who lives in a relatively small town, where job
s are hard to come by. She is interviewed for a job by a local no
nprofit agencythat lobbies government officials to impose very
strict controls on the possession of weapons. Susan enjoys hunti
ng with her husband andchildren and owns several shotguns. Th
e agency offers her a job on the condition that she not own any
guns, and that she get rid of any thatshe already owns. The agen
cy insists that it would violate the image it seeks to project were
its employees to own and use the same weapons itwishes to rest

rict. Can it demand that Susan agree to this condition? She was
faced with either not taking the job and thus being put inconside
rable economic insecurity, or taking the job and seeing what she
regards as her constitutional rights violated. The agency realize
s thatthe community has a high unemployment rate, and thus the
re is considerable pressure on Susan to accept this condition. Su
san could, ofcourse, take the position and then, if fired, sue the
agency. But that strategy would require hiring a lawyer and deal
ing with a lawsuit, which isboth time consuming and expensive.
Susan, of course, doesn't have to take the job; that decision wou
ld preserve her rights—
at the cost ofbeing unemployed or making a great deal less mon
ey.
Here we see what might be a plausible reason for an employer t
o want to restrict the rights of its employees, and to extend thos
e restrictionsoutside of the workplace. It might be argued that w
ithout these restrictions, employees may act in ways that are det
rimental to the employerand the company. But there also seems
to be a considerable worry here that such conditions of employ
ment go beyond what the company canlegitimately demand and
cannot be shown to lead, necessarily, to putting the company at
a disadvantage in seeking to do what it wishes andneeds to do. I
n short, these restrictions are unfair and cannot be appropriately
required as a condition of employment.
Further concerns are raised here in the context of a tight job ma

rket, where economic insecurity and financial need may lead em
ployees, andjob candidates, to accept conditions for work that w
ould otherwise be unfair. This may lead to a situation in which e
mployers have the potentialto restrict rights even further, with t
he knowledge that it is difficult to leave a job and/or find anoth
er equivalent-
paying job. This may lead notonly to the potential abuse of emp
loyees' legitimate rights but also to a situation in which workers
are unhappy due to that abuse but areunable to leave because of
significant restraints on employment opportunities. Employees
should not be put in a position where they are facedwith trading
their legitimate rights for financial security, and thus any restri
ctions so imposed must meet a very high standard, showing thatt
hey are absolutely necessary for the company to function effecti
vely.
Be the Ethicist
Should Off-Duty Activities Cost You Your Job?
In McLennan County, Texas, six deputies were fired by the sher
iff. The deputies have sued, arguing that they were fired becaus
e theycampaigned for the sheriff's political opponent in a recent
campaign; the sheriff has stated that they were let go due toreor
ganization of the sheriff's office.
The deputies are what are saw earlier described as "at-
will" employees: They are not members of a union, have no civi
l serviceprotection, and serve at the sheriff's will. As one of the

local papers noted, "Courts have ruled that sheriffs in Texas hav
e broaddiscretion in choosing employees and can fire them with
or without cause, absent contractual limitations, as long as the d
ecisionsaren't politically motivated." The same article notes that
the deputies' lawsuit states that they "have a combined 114 year
s ofexperience and ‘outstanding' performance and service record
s as sheriff's deputies" (Brown, 2013, para. 10, 12).
The difficulty here, of course, is determining the real reason the
deputies were fired. It is clear that the sheriff was aware of thei
rpolitical activity, but many find plausible the sheriff's claim th
at there was no political basis for the firing, and that, rather, it
wassimply the result of reorganizing his office.
For more details on this case, visit http://www.wacotrib.com/ne
ws/mclennan_county/six-ex-deputies-suing-sheriff-county-over-
firing-attorney-says/article_90ac4c09-2bb1-5e00-a35e-
ce17f0a49782.html.
Exercise
·
Determine the differences between the legal questions and the et
hical questions involved here.
· How do you think the legal questions should be resolved?
· How do you think the ethical questions should be resolved?
·
Do you think an employer can restrict the political activities of
employees away from the workplace?

·
What are the implications for employees if an employer can rest
rict their off-duty political activities?
Similar issues have arisen in cases where employees' religious v
iews conflict with those of their employees. Such cases raise, ag
ain, importantethical questions about whether an employer has t
he right to insist that a worker act in certain ways away from th
e job site. Can a managerwho objects to homosexuality fire an e
mployee he or she finds out is gay or lesbian? Can an employer
who objects to interracial marriageterminate someone he or she
discovers is married to someone from another race? At what poi
nt do constitutional rights override the rights ofemployers to ma
ke free choices about who works for, and represents, their comp
anies? The courts have ruled that in some cases, a personcannot
be fired for such characteristics as race, religion, or gender, but
even in these cases, suits have been brought to challenge theseli
mitations. Some of these suits have been successful, when, for i
nstance, a religious institution is seen as fulfilling its appropriat
e mission bymaintaining prohibitions on hiring certain workers.
Case Study
Hosanna-Tabor Evangelical Lutheran Church and School
In a 2012 case, Hosanna-
Tabor Evangelical Lutheran Church and School v. Equal Emplo
yment Opportunity Commission, the SupremeCourt decided on t
he question of whether a minister could sue a church. In this par

ticular case, an employee—Cheryl Perich—
took aleave of absence due to health reasons. When she returned
, she and her employees had a dispute, and the church threatene
d tofire her. Perich told them if they did fire her, she would sue.
The church fired her, and Perich sued, asserting that her rights
underthe Americans With Disability Act had been violated.
The church cited its Commission on Theology and Church Relat
ions, referring to First Corinthians 6: 1–
11, stating that "Christiansshould seek an amicable settlement o
f differences by means of a decision by fellow Christians." Peri
ch was fired, then, for havingsued in violation of official church
doctrine. Perich claimed the church was using this as a pretext
for firing her.
The church also noted that Ms. Perich was a commissioned Luth
eran minister; to deny its right to fire her was tantamount toallo
wing an outside authority, such as the government, to fire and hi
re its ministers, which would be a clear violation of the FirstAm
endment's Establishment Clause.
Among the many interesting issues here:
· Can any organization fire a worker for threatening a lawsuit?
·
If some companies cannot do this, but a church can, what is the
fundamental difference between the two as employers?
·
Can a church fire someone even if it may violate that person's c

onstitutional rights?
Exercise
How would you have decided this case? What do you think is th
e crucial issue between the church and Ms. Perich that needs to
bedetermined?
A good story about this case, summarizing its details, can be fo
und here:
http://blogs.edweek.org/edweek/school_law/2012/01/supreme_c
ourt_backs_church_in.html.
The Supreme Court ruling itself is available as a PDF at:
http://www.supremecourt.gov/opinions/11pdf/10-553.pdf.
Can Employee Behavior Be Dictated by a Company Mission?
Imagine you have been unemployed for several months and are
desperate to find a job. You've been offered the job of being the
representativeof a local animal rights group. This group works t
o prohibit the wearing of fur; advocates vegetarianism; and seek
s to ban the use of animals forthe testing of perfumes, pharmace
uticals, and other products. The job is a very good one, but as a
condition of employment the group requiresthat you not eat mea
t. After all, if you are seen shopping for steaks and pork chops,
it would indicate the animal rights group is a bithypocritical, in
that you are paying for those steaks and chops with money the g
roup provides. Yet you really like your occasional cheeseburger
and barbecue.
Consider:

· Do you take the job?
· Is this a fair condition of employment to impose upon you?
·
Are there limits to what an employer can require of employees,
other than those that would require you to do something illegal?
Here the question arises as to whether an employer can impose c
ertain restrictions on the behavior and lifestyle of employees be
cause of acorporation's mission. Most corporations have mission
statements: If an employee's private behavior conflicts with his
or her employer's missionstatement, does the company have the
right to fire that employee, or at least demand he or she change
the behavior in question? If so, arethere limits to what the comp
any can demand?
As in many of the cases we have seen, the tension between what
an employer can demand and what rights the employee retains c
an generatea difficult balancing act. Again, few if any are sugge
sting that employers have the right—even if they wanted it—
to dictate to their employeeswhat they do at all times outside th
e workplace, no more than anyone seems to be arguing that emp
loyees can do anything at all outside theworkplace, regardless o
f effects on the company. But determining where one draws the
line is not particularly easy.
As we saw earlier, ethical theories may help us clarify and make
more rigorous the arguments involved, but they don't offer som
e kind of recipeto follow that will result in the appropriate ethic

al choice in every situation. There are advantages to having the
issues made clearer, andadvantages to drawing on the arguments
that have been developed over centuries to deal with moral con
flicts. But to expect theory to resolvethese conflicts is probably
being a bit naïve.
As we mentioned earlier, most corporations have mission statem
ents. Walmart's, for instance, is succinct: "We save people mone
y so they canlive better" (http://stock.walmart.com/investor-
faqs). Exxon-
Mobil's is a bit more expansive: "Exxon Mobil Corporation is c
ommitted to being theworld's premier petroleum and petrochemi
cal company. To that end, we must continuously achieve superio
r financial and operating resultswhile simultaneously adhering t
o high ethical standards" (ExxonMobil, n.d., para. 1). These ma
y seem fairly obvious, but corporations frequentlyrevert to the
mission statement to make sure new company policies are in co
mpliance with it. At the same time, the statements leave a great
deal of room for interpretation: For instance, what does Walmar
t mean by "living better"? What are the "high ethical standards"
to whichExxon-
Mobil aspires? Would most of us agree on how to characterize e
ither of these important parts of these corporate mission stateme
nts?
The conflicts that arise tend to do so out of actual implementati
on of policies that some may regard as wholly consistent with a

missionstatement, while others regard the same acts as in funda
mental conflict with it. For instance, imagine a clothing compan
y—Just Clothes—
thatuses labor in impoverished countries where unemployment i
s extremely high and wages are quite low. One could well argue
that Just Clothes isdoing exactly what it should be doing: keepi
ng production costs low, passing on those lower costs by offerin
g lower-
priced products, andproviding a good return to its investors. Jus
t Clothes could also argue that if it did not employ as many peo
ple as it did in low-
income countries,unemployment would be even higher. Thus, th
eir workers may not make a lot of money, but they are better off
than they would be otherwise.
Now imagine Samantha, whose church has been very active in t
he area of workers' rights in Third World countries. Samantha h
as written lettersto the newspaper, organized demonstrations an
d panels criticizing the practice of employing low-
cost workers, and attended several conferenceson behalf of her
church. She is, in short, very critical of what she calls "sweatsh
ops," objecting not just to low wages, but to substandardhousing
, dangerous and unhealthful work conditions, and mistreatment
of workers, particularly women and children.
Samantha, however, works for Just Clothes. The management of
Just Clothes is not, understandably, very happy with Samantha'

s activities. Theyregard her criticism of sweatshops as a pointed
criticism of Just Clothes, which damages the company's reputat
ion and, potentially, could lead tolower sales and lower returns t
o its investors. Samantha is called into her boss's office for a di
scussion of this, and she points to Just Clothes'smission stateme
nt, which states, "Our goal is to sell a quality product while hav
ing a positive impact on the lives of all those we touch."Samant
ha points out that the workers that produce their clothes might
well disagree that their lives have been positively affected by Ju
stClothes, and that actual corporate policy contradicts its own m
ission statement.
The company is tempted to fire Samantha. She is an at-
will employee, but she could well argue in a court that she has b
een terminated forparticipating in constitutionally protected acti
vity (both in terms of her right to free speech and her right to pr
actice her religion). At the sametime, the company may regard t
hat risk as one worth taking; after all, they have considerably m
ore resources than Samantha, and may simplybe able to fight in
court longer than Samantha can afford to.
Applying the Theories
Here we see how ethical theory can help clarify some of these is
sues by focusing on the specific aspects involved in this dispute
. For instance, autilitarian might attempt to determine the benefi
ts for the company, its domestic workers (including Samantha),
and its low-

income employees.Trying to see how one could establish these b
enefits may well help establish the difficulties in balancing the
utilities involved, which include notjust the bottom line of Just
Clothes and the return to investors, but the well-
being of all if its employees. One could, of course, simplydeter
mine that what should be done is to follow a rule, such as "impl
ement those policies that return the greatest short-
term profit withoutharming long-
term expectations." But that rule itself may be criticized by Sam
antha, her church, and many others who might see determiningo
ne's behavior solely on the basis of profit as obviously unethical
.
Case Study
David Tulis/Associated Press
Chick-fil-A
Chick-fil-
A dealt with a great deal of controversy after one of their execut
ives voiced anopinion about same-sex marriage.
A significant controversy broke out in 2012 when Dan T. Cathy,
Chief Operating Officerof the Chick-fil-
A chain of restaurants, criticized same-
sex marriage. Many in favor ofsame-
sex marriage harshly criticized Cathy, while others defended bot
h his right to freespeech and his right to run his business on the

principles he holds to.
Some proposed boycotts of Chick-fil-
A restaurants, and even staged "Same-
Sex KissDays" in front of selected restaurants, to demonstrate t
heir disapproval of Cathy's views.At the same time, some of tho
se supportive of Cathy—
either his view or his right toexpress it—organized "Chick-fil-
A Appreciation Days," which drew large crowds to manyof the c
ompany's franchises.
Finally, in July 2012, Chick-fil-
A released the following statement: "We are a restaurantcompan
y focused on food, service and hospitality; our intent is to leave
the policydebate over same-
sex marriage to the government and political arena."
Exercise
Chick-fil-
A's mission statement is simply this: "Be America's best quick-
service restaurant." It amplifies this a bit by adding itsCorporat
e Purpose: "To glorify God by being a faithful steward of all tha
t is entrusted to us. To have a positive influence on all whocome
in contact with Chick-fil-A" (Farfan, 2013, para. 5–6).
If you owned a Chick-fil-
A franchise, which do you think would be justifiable reasons for
firing an employee? Briefly state why youthink this would be j
ustified or unjustified.

· You discover an employee is Muslim.
· You discover an employee is bisexual.
·
You discover an employee attends a Christian church that suppo
rts gay rights.
·
You discover an employee has been stealing from the company.
· You discover an employee's sister is a lesbian.
· You discover an employee does not like chicken.
· You discover an employee has been picketing other Chick-fil-
A franchises.
Technology in the Workplace
We are surrounded by social media; for many, checking their Fa
cebook page, tweeting, and looking at the Instagram pages of th
eir friends are afrequent occurrence. Indeed, some may feel left
out at a party if they do not use Facebook; often the assumption
is made that virtuallyeveryone participates in this particular for
m of social media. (For good reason: As of January 2013, Faceb
ook reported that over one billionpeople qualified as "active use
rs." [Tam, 2013]).
Social Networking
The phenomenon of social media has raised difficult questions f
or the workplace, and for potential job candidates. Perhaps you
havecomplained at a social media site about a boss, a co-
worker, or your company: Is that a sufficient reason for you to b

e fired? Do you have theright, in other words, to say what you w
ish online without risking losing your job? Should a job candida
te expect a potential employer to look athis or her Facebook pag
e? Is it justified for a hiring decision to be made on the basis of
something embarrassing (or worse) that has beenposted on a soc
ial media site?
In the movie The Social Network, a dramatic portrayal of the fo
unding of Facebook, Mark Zuckerberg (Facebook's CEO) is sho
wn having a bit toomuch to drink, and posting unpleasant and v
ulgar remarks about his former girlfriend. When she confronts h
im about it, she points out thatthings written on the Internet are
"written in ink, not in pencil"; in other words, once something i
s circulated online, it may be there forever. Apicture or a comm
ent could resurface many years later to damage to a person's rep
utation, and there is not a lot that person can do aboutonce it ha
s been posted.
We often hear that the easiest way to avoid this is simply not to
post anything that could ever, conceivably, raise such a problem
. This mightlead to less interesting comments and photographs b
eing posted, but it is also difficult to always know what could o
r could not, potentially, dodamage. (Some cases, admittedly, are
clear.) But the ethical and legal questions that arise focus more
on whether someone's privacy is violatedby potential employer
s looking at Facebook pages or other social media sites, and wh
ether it is fair to base hiring, promotion, and terminationdecisio

ns on what might well seem to be a simple exercise of our right
to free speech.
With the various issues that have arisen in the context of social
media, policies and legislative responses are also in the process
of beingdeveloped. However, an important decision was made in
early 2013 by the National Labor Relations Board; The New Yo
rk Times described it likethis:
Employers often seek to discourage comments that paint them in
a negative light. Don't discuss company matters publicly, atypi
cal social media policy will say, and don't disparage managers,
co-
workers or the company itself. Violations can be a firingoffense
.
But in a series of recent rulings and advisories, labor regulators
have declared many such blanket restrictions illegal. The Nation
alLabor Relations Board says workers have a right to discuss wo
rk conditions freely and without fear of retribution, whether the
discussion takes place at the office or on Facebook. (Greenhous
e, 2013, para. 1–2)
Another issue concerning social media is the question of what a
potential employer can ask job candidates about, regarding their
various socialmedia networks. Reports have surfaced of job can
didates being asked for their Facebook passwords, for instance,
thus giving the employeraccess to candidates' pages. Obviously
enough, a job candidate may refuse such a request, but one seek

ing a job may not feel comfortable indoing so, and may have go
od reason to think that such a refusal will harm his or her chanc
e at being hired. Some employers have defended thepractice, arg
uing that it is one way to make sure that a person being consider
ed for a job does not exhibit characteristics the employer would
not otherwise know about. In response, the practice has been de
cried as an invasion of privacy, and may also be a way of deter
mining factors—age, race, religion, among others—
that are illegal to consider in many hiring decisions. The questi
on thus arises as to whether the risk acompany assumes in such
a hiring decision makes this information sufficiently valuable th
at it outweighs the right of the job candidate to keepthat inform
ation private.
Employee Privacy
Erik Snyder/Lifesize/Thinkstock
Do employees have any expectation of privacy in the
workplace? Doemployers have the right to monitor
telephone calls or emails?A final issue that should at least be m
entioned is what, if any, right to privacyemployees retain while
on the workplace. A person who works for corporationA may, as
part of his or her job, use the phone, the computer, and the Inte
rnet;does the employer have a right to look at any or all of these
things, to see ifthe worker is doing what is supposed to be done
? Can an employer, forinstance, monitor telephone calls, or is th

at an invasion of privacy? Does anemployer have the right to ac
cess the "clickstream" on a worker's computer, tobe able to see
what sites that worker is looking at while at work? Should anem
ployer be able to read an employee's emails that are sent from th
eworkplace? For that matter, if an employee also works from ho
me—whetherdue to "flextime" or taking extra work home—
should the employer be able tosee what sites that worker is visit
ing? In short, if the employer is paying aworker's salary, does th
at give the employer legitimate access to any and all ofthe form
s of communication engaged in by the employee while being pai
d? 4.2 The Issue: Employers' Rights
The issue of workplace rights is typically associated with emplo
yees—
those individuals without whose participation a company or org
anizationcould not operate. But there is another side to the right
s in the workplace debate: the rights of the employer itself. The
question of just whatconstitutes employers' rights touches on ma
ny aspects of business, but we will restrict our discussion to one
example: whether employer-
provided health care should be mandatory.
Few issues have generated controversy as intense as the Afforda
ble Care Act (ACA), often called Obamacare. Many employers h
ave objected toit as increasing their cost of doing business; they
, and many politicians as well, have objected to various mandate
s of the act that they regard asnot falling within the legitimate s

cope of government. Others have argued that the ACA seeks to l
ower costs, or at least lower the rate at whichcosts increase, and
that it addresses a number of issues that polling indicates are p
opular with the American public, such as being able topurchase
insurance with a preexisting condition, children staying on their
parents' insurance until age 26, and no lifetime caps on medical
expenses. In general, its supporters argue that the ACA will pro
vide health insurance to many who have been unable to get it.
Reuters/Reuters/Corbis controversial
The Affordable Care Act, often referred to as Obamacare, is ane
xtremely controversial and divisive piece of legislation.
The situation is made more complex by the fact that historically
, manyAmericans' health insurance was tied to their employer's
health care plans. (Forthose who are retired, unemployed, or in
poverty, other plans are designed tooffer coverage, such as Med
icare and Medicaid.) It is not clear that this is anideal, or even e
fficient way to offer health care. Because it is illegal for ahospit
al to turn away someone in need of health care, many who are n
otinsured receive their health care at emergency rooms, which is
the mostexpensive form of treatment. In short, the American he
alth care system is oneof the most expensive in the world, yet it
achieves outcomes that are regardedby many as substandard. (T
hus, according to the National Center for HealthStatistics, the U
nited States spends twice as much on health care per capita[$7,1

29] as any other country, yet ranks 30th in infant mortality and
50th in lifeexpectancy [ http://www.cdc.gov/nchs/]).
The details of the ACA are complex and fluid. Only last year di
d the SupremeCourt rule the ACA as passing constitutional must
er, and implementation of itsvarious provisions is still taking pl
ace. Hence, it is difficult to determine whatthe results of this la
w will be for several more years. However, the ACA andother at
tempts to provide health care raise a simple question that itself i
simportant, but controversial: Is health care a right? In other wo
rds, is havingaccess to decent, affordable health care a right, si
milar to other rightsenumerated in the Constitution and Bill of
Rights? Or is health care not a right, but a product like any othe
r that must be purchased by theconsumer?
The Argument That Health Care Is Not a Right
There are various ways of arguing that health care is not a right,
but we can focus on one of the more popular versions here. Sim
ply put, onthis view, health care is not a right: While there are c
ertain, "inalienable" rights—
life, liberty, and the pursuit of happiness—
that theConstitution does protect, health care is not one of them.
The right not to be harmed or killed, or not to have our propert
y seized, is whatphilosophers call a negative right. Negative rig
hts are justified and legitimate, and only require us not to interf
ere with the rights similarlypossessed by others.

But we do not have such a negative right to health care, beyond
the right to pursue our own health care and not be prevented fro
m doing so.Rather, the claim that health care is a right introduce
s a different notion—
a positive right. I do not have a right to health care anymore tha
n Ihave a "right" to food, clothing, and shelter. If taxpayers are
forced to pay for my alleged right to health care, then they are b
eing forced tospend money, presumably against their will, whic
h is, in fact, a violation of their rights. Thus, forcing me to acce
pt that others have a right tohealth care, which I must pay for, a
ssumes a positive right—the right to health care—
and violates my negative right—
the right not to be forcedto pay for something that I have no say
in. The Constitution protects negative rights, and thus it is a vi
olation of my constitutional rights to forceme to pay for anyone'
s health care (including my own). Since it assumes a fictional p
ositive right and violates my genuine negative right, healthcare
is not a right any more than it is a right to own a car, a home, or
a pair of cowboy boots.
The Argument That Health Care Is a Right
iStockphoto/Thinkstock
Supporters of the Affordable Care Act
argue thataccess to health care is a

constitutionally protectedright.
The argument that health care is a right also takes different for
ms; some have been offered onthe basis of obligatory Christian
charity, others in the name of economic efficiency, and stillothe
rs that appeal to the United Nations Universal Declaration of Hu
man Rights (for which theUnited States voted). In simple terms,
the argument is: Theoretical access to health care isinsufficient
if fundamental obstacles prevent one from actually obtaining th
at care. If life, libertyand the pursuit of happiness are protected
rights, and the right to life requires some minimalaccess to healt
h care, then it follows that that access is, itself, a right (and is, i
n that sense, anegative, constitutionally protected right).
One of the effects of recognizing health care as a right is that it
means everyone will haveaccess to health care (universal health
care); this is turn will lead to more effective health caredelivery
through regular checkups and preventative care, rather than ver
y expensive emergencyroom treatment. Furthermore, this will le
ad to better health care results and a more productiveeconomy,
due to lower worker absentee rates and a better general quality
of life. Universalhealth care will also mean that no one will hav
e to choose between health care and some otherexpenditure, or f
ace bankruptcy due to exorbitant health care costs.
Do Employers Have an Obligation to Pay for Employees' Health
Care?

The purpose of the ACA was to guarantee access to health care f
or as many Americans aspossible. The goal was to provide this
greater access and, at the same time, continue to developways o
f making health care cheaper in the United States. Health covera
ge has traditionally beenassociated with a worker's place of emp
loyment, and the ACA continues to follow this traditionby requi
ring employers to offer health care for their full-
time employees. There are certaintechnical distinctions made on
the basis of the company in question; businesses employing few
er than 25 employees have different options thanthose employin
g, for instance, more than 100. Those companies not providing h
ealth care coverage directly have the option of participating in"
Affordable Insurance Exchanges," which allows larger groups to
pool their numbers in order to lower insurance rates.
One can certainly see how a utilitarian might argue in defense o
f the ACA; health care is presumably a benefit, or good; having
access toreasonably good, reasonably affordable health care wo
uld seem to lead to the greatest good for the greatest number rel
ative to the otheroptions that have been suggested. Depending o
n how one sees health care—as a commodity or as a right—
this would strongly affect how onemight regard the ideas behind
the ACA. If a commodity, it is not clear that a deontologist wo
uld support one person being required to pay for,or at least subs
idize, another person's commodity, good, or service. After all,
most of us would object to being taxed to help pay for anotherp

erson's car. But if health care is a right, then it seems more likel
y that the deontologist would conclude that human dignity is not
adequatelyrespected without guaranteeing people the minimum
health care that would satisfy the genuine exercise of that right.
4.3 Applying the Theories
Earlier we saw the conflict between American Medical Respons
e Incorporated and the paramedics that were suspended for work
ing for anothercompany. This is one example of the kind of ethi
cal issues that can arise in the workplace. Most such disputes, a
s we have seen, require adelicate balancing act that protects the
interests and the rights of all parties involved, an act that can of
ten be very difficult to do. Rarely are allparties satisfied, althou
gh the results that does leave all parties partially satisfied may
often be indicative of a successful resolution.
We have also seen how ethical theories may not offer recipes, o
r algorithms, to follow in order to "solve" these ethical disputes.
Rather, ethicaltheory helps make clear what is stake in these di
sputes, helps us focus on what is relevant (and eliminate that wh
ich is irrelevant), and offers usthe reflections of many philosoph
ers who have looked at these kinds of issues and offered sophist
icated and rigorous arguments to help resolvethem.
Finally, we have also seen that there is no guarantee that two pe
ople who adopt a similar ethical theory will necessarily agree o
n how thattheory should be applied, and what the theory will sa
y is the moral thing to do. As we might see with the ACA, one d

eontologist might arguethat health care is a right that cannot be
abridged or violated, while another might not recognize it as a r
ight and may provide a much differentanalysis. Indeed, it may t
urn out that their disagreement is not so much about universal h
ealth care than its status as a right or a commodity.Consequentl
y, each specific issue must be looked at carefully, and its details
examined, before constructing the strongest argument we can in
support of our position. But it should come as no surprise that t
wo deontologists, or two utilitarians, may disagree; after all, pe
ople may share acommon viewpoint but not agree on many thing
s relative to that viewpoint. But to see this, it might help to look
a bit more at some of thesetheories and how they can be applie
d.
Virtue Ethics
As a legal entity, the corporation is recognized as a "person"—
technically an "artificial person"—
that possesses many of the rights peoplepossess under the law.
Using this idea, we can look at the corporation from the perspec
tive of virtue ethics: What does it mean for acorporation, in this
context, to be virtuous? Presumably, we want corporations to a
ct morally and as good, if artificial, "citizens"; virtue ethicssee
ms to provide a way of characterizing what is then required of s
uch corporate behavior.
The corporate "person" is under a number of constraints; howev
er, it must, above all, maintain profitability. But recognizing tha

t goal, it mustalso meet the legitimate needs of its employees, st
ockholders, and others who provide various kinds of support (fi
nancial and otherwise) to thecompany. This includes the needs o
f the community in which it is found, not just by providing empl
oyment, but also by playing the role of goodcorporate citizen by
supporting charities and perhaps other philanthropic work. It ca
n be a difficult job to balance all of these obligations, whilemai
ntaining focus on the bottom line, but virtue ethics emphasizes
precisely that kind of balance that may offer valuable guidance t
o thecorporation.
For example, the company must seek a balance—
a Golden Mean—
between maintaining employee satisfaction and not distorting its
fundamental mission. Thus, it must offer salaries and benefits th
at are competitive. If the wage–
benefit package is too small, employees maydesire to leave the
corporation, and it may be difficult to hire new workers. If the
wage–
benefit package is too generous, it may take too muchaway from
the quarterly or annual profits. Just as this balance must be stru
ck, a balance relative to employee rights must be considered in t
helarger corporate context. These rights cannot be restricted in
a way that is unfair to those workers, but legitimate restrictions
must bemaintained for the corporation to meets its fundamental
goal: to be successful (specifically, in a for-

profit company, profitable). Situations canarise where an emplo
yee may insist on a right that may well hinder the company in m
eeting its goals. In that case, those rights must bebalanced again
st the needs of the corporation, and an appropriate balance must
be identified and maintained.
To examine a specific virtue, corporations should be honest, in
dealing with both their employees and the community in which t
hey are located.Obviously enough, there can be too little honest
y—
whether defrauding customers, skimming profits, lying on tax fo
rms, or any number of thefamiliar examples of corporate behavi
or that are immoral, illegal, or both. Yet there can also be too m
uch honesty, such as failing to protectproprietary information es
sential to a company's profits, or revealing marketing strategies
to employees and, potentially, competitors—
thedistribution of which would put the company at a disadvanta
ge. Neither too little honesty nor too much honesty is in the best
interest of thecompany or, importantly, in the best interest of it
s employees. Virtue ethics, then, provides a way of seeing how t
o strike the balance here,whereby an appropriate amount of corp
orate honesty leads to the best results for the company, its empl
oyees, and its community.
Be the Ethicist
Charles Dharapak/Associated Press

President Obama signed the Lilly Ledbetter FairPay Act in 2009
.
The Lilly Ledbetter Act
In 2009, President Obama signed the Lilly Ledbetter Fair Pay A
ct, which promoted equalpay for equal work, and allowed lawsu
its to be filed by someone who claimed not tohave been paid the
same amount for the same work.
Read the representative arguments on both sides of the issue.
· Against the legislation:
Victoria Toensing: Obama Overloads a Tale of Equal PayMona
Charen: Lilly Ledbetter Fair Pay Act Isn’t Really for Women At
All
· For the legislation:
Lilly Ledbetter Fair Pay ActThe Lilly Ledbetter Fair Pay Act of
2009
Exercise
Adopt one of the ethical theories we have looked at, and decide
whether you supportthis legislation or not. Explain how the theo
ry you adopted helped you defend yourdecision. Then answer th
e following:
· Which theory did you choose?
· Why did you choose that theory?
· Did you support or reject the legislation?
· How did the theory you chose help in making that decision?
· Would a different theory have led to a different result?

Deontology
The deontologist recognizes that companies, whether for-
profit or not-for-
profit, have a fundamental requirement: namely to carry out thei
rmission. Specifically in the case of for-
profit corporations, that mission is to make sufficient profit to s
tay in business and, preferably, continue togrow. Yet the corpor
ation, even as an (artificial) person, must not violate certain rul
es: It must treat its employees, its community, and even itscomp
etitors with respect. It must not follow or develop company poli
cies that it would regard as fundamentally unfair were another c
ompany tohave those same policies. The deontologist might exp
lain this in terms of Kant's universalization test: If, for instance,
company policy imposescertain restrictions on speech or behavi
or for its employees, could this policy be fairly imposed on all c
ompanies in the same context? Thedeontologist might also appe
al to the Golden Rule here: If an employer were to impose a giv
en set of restrictions on employees, would he orshe be willing t
o work under the same set of restrictions?
We can look at how deontology can be applied here by looking
at drug testing—
in this case, for airline pilots. The deontologist might wellconcl
ude that instituting such drug tests is precisely the kind of polic
y that could—even should—
be put in place universally and in all similarcontexts. Certainly,

someone who imposes such drug tests may be quite confident th
at he or she would be willing to work under such acondition as
well; hence, it seems to conform to the Golden Rule.
But there may be other situations where a company desires to re
strict an employee's rights in ways that do not meet the universa
lization testor don't seem to satisfy the Golden Rule. Perhaps as
a condition of employment, employees are told that they cannot
join a union (or, incontrast, are told they must join the union).
Although legal issues complicate the story, when observed from
a moral standpoint, it is not clearthat this restriction could be u
niversalized: that no one could ever join a union (or that everyo
ne must join a union) would seem to lead to theresult that the ve
ry notion of a union becomes meaningless. And it seems quite p
ossible that an employer who tells employees that theycannot jo
in a union—or must join a union—
might well be unwilling to work under those same conditions, in
dicating a conflict with the GoldenRule. Consequently, the corp
orate (artificial) citizen must, on the deontological view, treat r
ules in precisely the same way as real citizens must.Any restrict
ion on employee rights that fails to satisfy the universalization t
est, or conflicts with applying the Golden Rule, thus risks the g
enuinepossibility of being an unfair, unjust, and immoral restric
tion.
Some Conclusions
In considering the fundamental goal of a for-

profit company or corporation, the virtue ethicist and the deonto
logist do not really disagree. Bothrecognize that such a compan
y must make a profit to remain in business and must impose cert
ain conditions on its employees and potentialemployees to do so
. The tension comes not so much in applying the specific theorie
s as in determining where an employer's rights to imposesuch co
nditions are legitimate, and where they infringe on the rights of
employees. It may seem easier to strike an appropriate balanceb
etween these two sets of rights in theory than it is in practice.
Consider a company that receives much of its business from con
tracts with the federal government. This company has spent year
s developing aclose relationship with Senator Smith, who repres
ents the state where the corporate headquarters are located. The
members of the company'sboard of directors are particularly clo
se with Senator Smith, and he has made it one of his highest pri
orities to see that the company receivesfavorable attention in th
e awarding of federal contracts. The company benefited by supp
orting Smith, and Smith benefited in turn. Currently,Senator Sm
ith is now running for reelection, and the CEO of the company i
s the director of his campaign.
Ann is an employee of the company and a staunch opponent of S
enator Smith. She has worked long hours outside of work for Se
nator Smith'sopponent, and has contributed both time and mone
y to Smith's opponent.
The issue here is one of the limits to what the CEO of Ann's co

mpany can do, relative to Ann's political views. Can he ask her t
o remove apolitical sign from her office cubicle? Can he ask her
to remove a bumper sticker from her car, because she parks in t
he company parking lot?
A fundraising picnic has been scheduled, organized by the CEO,
for Senator Smith. Admission is $25, and it has been made abu
ndantly clear toall employees that their attendance is expected.
Clearly enough, the company cannot require this attendance, but
Ann is convinced that herchances for promotion and salary incr
eases will be harmed if she does not attend.
Here we have what seem to be competing rights: the right of the
CEO to do what he thinks is in the best interest of the company
(and, hemight argue, therefore in the best interest of Ann hersel
f), and Ann's right to participate in politics in the way she sees f
it. Virtue ethics,deontology, or any of the other ethical theories
we have at our disposal may offer some insight into how this co
nflict might be resolved, butnone of the theories can likely prov
ide a solution that is satisfactory to all involved. As we have se
en before, ethics can offer a good bit ofinsight into the problem,
by identifying what is at stake, and how the conflict itself migh
t be most accurately characterized. Yet, as we have alsoseen, we
may be expecting too much from any ethical theory if we think
there is an easy procedure to follow that will result in the one c
orrectanswer.
Where Do We Go From Here?

It is, generally, to the advantage of both the employer and the e
mployee that their company thrives: All are then better off. In a
ddition tomaintaining its own economic well-
being, a successful corporation can offer the community a numb
er of things that will make it better off, suchas support for the a
rts, schools, and general culture of the community. Not to be ov
erlooked is what is also known as the "ripple" effect: Asuccessf
ul company will pay its workers the kind of wages that filter thr
ough the rest of the community. A well-
paid worker who takes herfamily out to dinner thus helps those
who work in the restaurant, and those workers in turn may have
sufficient disposable income to buythings that support still othe
rs.
But conflicts do arise, between what an employer thinks is the ri
ght thing to do for the company, and what an employer thinks is
right for theemployer. We've seen a number of examples of this
kind of conflict, and most of us are familiar with being asked t
o do things at work that can,at least potentially, generate these
kinds of problems. The situation, of course, is made worse when
unemployment is high and jobs are difficultto find. That situati
on makes most employees more reluctant to register objections,
even if legitimate; many will prefer being employed tohaving th
eir rights maintained while being unemployed. As a result, the e
mployer has just a bit more leverage to impose conditions onem
ployees, and on job candidates, that can become increasingly un

fair to those employees.
Here we see the not-
infrequent situation where real life confronts what ethics may te
ll us is the correct, moral, or just thing to do. At whatpoint does
one refuse to violate one's moral code? If we are being harmed,
or being treated unfairly, do we stand up for our moral principl
es,or do we simply take it, realizing the importance of remainin
g employed? Does it depend on how extreme the case is? Would
we be willing tolie to keep our job? Would we be willing to ign
ore certain legal requirements to keep our job? Would we be wil
ling to harm others, or at leastrisk harming others, to keep our j
ob? Again, we find ourselves between two extremes: We may be
willing to overlook a relatively insignificantmoral infraction to
keep our job, but we may be absolutely unwilling to commit a c
rime in order to keep our job. Many issues in businessethics, as
we have already seen, arise from trying to find the appropriate b
alance between these two extremes. Ethics may help up us find i
t;however, it doesn't guarantee that we will find it, or that every
one will agree with our conception of the balance we do strike.
Be the Ethicist
Unionization
A manufacturing company—
call it United Manufacturers, or UM for short—
has had a long history of running a good, profitablecompany. H
owever, due to some changes in management and policy changes

, including some cost-
cutting measures, some of UMworkers have started discussing a
mong themselves the possibility of joining a union, in order to h
ave it represent their grievancesagainst the recent changes made
at UM. A few particular employees have been identified as "rin
gleaders" in attempting to organizea vote among workers in ord
er to gain union representation.
You are in upper management, and you do not want your workfo
rce to be unionized. Which of the following might be goodstrate
gies to adopt to avoid a vote being held by your employees to de
termine whether they will or will not be represented byunion?
1.
Threaten the ringleaders with being fired, if they do not drop th
eir union activities.
2.
Have the workers designate some spokespersons, and meet with
them to discuss their grievances.
3. Read the emails of the suspected ringleaders.
4. See if you can get any of the ringleaders' relatives deported.
5. Address the grievances you think are legitimate complaints.
6. Impose mandatory drug testing for your entire workforce.
7.
Hire extra security to prevent outside union members from gaini
ng access to your work site.
8.

Show employees videos that are designed to show the bad aspec
ts of unions.
9. Fire the ringleaders.
10.
Require job candidates to sign a pledge never to join a union.
11.
Raise wages in order to compete with competitors whose worker
s are unionized.
12.
Begin monitoring and taping phone calls made by the ringleader
s.
13. Have the ringleaders killed.
Many courses, texts, seminars, and websites exist that are devot
ed to helping companies avoid unions being organized in thewor
kplace. Here are some examples:
http://www.gaebler.com/How-to-Prevent-Unionization.htm
http://www.xperthr.com/topics/hr-management/union-
avoidance/
Exercise
Read the following description of the National Labor Relations
Act (often called the Wagner Act):
http://legal-dictionary.thefreedictionary.com/Wagner+Act
Now review the things you saw as appropriate ways to prevent u
nionization occurring at UM.
· Which of those would violate the Wagner Act?

· Which might violate the Wagner Act?
· Which would not violate the Wagner Act (or be legal)?
· Are all of the things you identified as legal also ethical?
·
Are any of the things that you identified as ethical be seen as et
hical by all the ethical theories we have seen?
·
If different theories conflict on what is ethical to do in this situ
ation, how do those conflicts arise?
·
Which ethical theory do you think is the best to apply in trying t
o achieve your goals while both following the law and remainin
gconsistent with your ethical values?
Chapter Summary
In this chapter, we have seen a number of conflicts that can aris
e in the workplace. While most companies have as their goal to
make a profitand provide a return to their investors, some practi
ces developed to achieve those goals can seem to invade employ
ees' privacy. Other policiesthat corporations develop may restric
t what an employee can do, or even require employees to act in
ways that are in conflict with thoseemployees' own values. Whil
e we have looked at a few of these conflicts, there are, of course
, many more.
Some of the issues looked at in this chapter include the followin
g:

·
How outside work can lead to a conflict of interest and/or confli
ct of commitment;
· What rights are involved in mandatory drug testing;
·
Whether an employer can ask an employee, or job candidate, for
a Facebook password;
·
Whether a corporate mission statement can infringe on a worker'
s right;
·
What a worker's right to privacy includes, and does not include;
· Whether a boss can monitor employees' Internet usage;
· If health care is a commodity or a right;
·
If health care is a right, whether an employer obligated to provi
de it; and
·
Whether a company can impose specific moral values on an emp
loyee by prohibiting certain activities.
Ethical theory offers extremely helpful tools to solve these prob
lems by clarifying the language involved, identifying what is an
d isn't relevant tothe problem at hand, providing rigorous argum
ents for specific ethical principles, and offering valuable critiqu
es of the shortcomings ofcompeting views. As one might imagin

e, just as with our own individual conflicts, workplace conflicts
are bound to arise. If ethical theory, andcommon sense, can give
us the tools to have a better chance of resolving these conflicts,
then we should avail ourselves of these tools to helpus do so.

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