250-759 Social Responsibility
of Business
Prepared by W. L. Dougan
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Ethical Theory and Business, 8th Edition
Tom L. Beauchamp, Norman E. Bowie and Denis Arnold
Chapter Three
The Ethical Treatment
of Employees
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Topics for Chapter 3
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Employment at Will
Risk information and workplace hazards
Whistle-blowing
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Werhane and Radin
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Principle of EAW
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IN absence of law or contract, employers have right to
hire, promote, demote or fire whomever and whenever
they please
Prima facie hiring at will
In US for employees not covered by union agreement,
legal statute, public policy or contract, employers may
dismiss employees “for good cause, for no cause or for
causes morally wrong without being guilty of legal
wrong
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Principle of EAW
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Difference between public sectior
employees and private sector
employees
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Due process
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Means by which an employee can
appeal a decision in order to get an
explanation of the action and an
opportunity to argue against it
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Reasons for EAW
Proprietary rights of employers would be violate by
elimination of EAW
 EAW treats employee and employer rights equally
 When taking a job, an employee commits to many
conditions including loyalty and at-will conditions
 Extending due-process rights to the workplace
interferes with efficiency and productivity
 Legislation and/or regulation of employment
relationships undermine an overregulated
economy
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Proprietary rights of employers would
be violated by elimination of EAW
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Difference between persons and labor
Productivity as property
However persons can be distinguished
between their possessions (a
corporation) but persons cannot be
separated from their working
Also, treating an employee in an at-will
fashion is similar to treating that
employee as property
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EAW treats employee and
employer rights equally
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Freedom of contract
EAW limits freedom of contract
However, freedom of contract violates
BOTH employee and employer rights
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An employee commits to many
conditions including at-will conditions
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However, the conditions of loyalty, trust
and respect, to be valid, should pertain
to both parties
Equal obligation and mutual restriction
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Extending due-process rights to the
workplace interferes with efficiency and
productivity
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Employer must have ability to fire inefficient
employees
Due process is costly and time-consuming
Workers can give up some basic rights for
money
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Workers implicitly agree in exchange for higher
wages
However, this assumes that two previous
points are true
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Legislation and/or regulation of
employment relationships undermine an
overregulated economy
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However, procedural and substantive
due process are consistent with the
ability to fire employees
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Due process in public versus
private employees
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Public employees have need to due
process because of the political
influences on their jobs
EAW could undermine public welfare in
case of a public employee
SO, if public employees should have
these rights, why wouldn’t private
employees have them as well?
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Richard Epstein
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“In Defense of Contract at Will”
Public action in favor of protection of
employees is increasing
EAW works to the mutual benefit of
employer and employee
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Three dominant standards for
evaluation of a doctrine
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Intrinsic fairness
Effects on utility or wealth
Distributional consequences
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Intrinsic fairness of EAW
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Freedom to contract as an end in itself
Desire to determine conditions of employment is
as basic as marriage or religion
We should not limit freedom to engage in any of
these without explicit justification
Limits on freedom of contract already protect a
large number of conditions
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Force
Fraud
Diminished capacity
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Effects OF EAW on utility or
wealth
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Difficult to assume that employees
would typically enter into contracts that
are not beneficial to them
Employee can use contractual rights to
control firm, too.
Real issue is not how to minimize
employer abuse, but to how to
maximize the gain from the relationship
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Effects of EAW on utility or
wealth (continued)
EAW helps firm to bear the risk of inappropriate
employee behavior
 Firm use of EAW is controlled by the risk of loss of
reputation, this is not as much an issue for
employees
 Employee is given a right to many choices with
EAW
 EAW allows employee to sample employment
conditions
 EAW is cheap to administer
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Distributional consequences
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Difficult to imagine how changes in
EAW can more equitably distribute
value
Diminishing of EAW would have
negative consequences on employee
shareholders (pension plans)
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Source: Canadian Labour Congress
Worker Safety Bill of Rights
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The right to know.
The right to be warned.
The right to independent expertise.
The right to refuse unsafe work.
The right to shutdown unsafe operations.
The right to refuse to pollute.
The right to participate equally in occupational health
and safety matters through joint committees with
trained representatives.
Source: Canadian Labour Congress
Worker Safety Bill of Rights
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The right to expeditious enforcement.
The right to be compensated.
The right to obtain relevant employment data to
support valid scientific studies related to health and
safety.
The right to open a contract and to strike over health
and safety issues.
The right to health and safety training.
The right of unions to have intervenor status in
coroner’s inquests and similar tribunals.
The right to first aid in emergencies.
“The Right to Risk Information and the
Right to Refuse Workplace Hazards”
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Ruth R. Faden and Tom L. Beauchamp
Worker right to information
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Be informed about exposure
Medical records
Worker right to refuse hazardous work
Worker right to help determine
workplace standards
Right to know
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What determines “right to know”
standard?
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Reasonable person standard
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Subjective standard
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Serious hazards may require individual
disclosure
Idiosyncratic information may require different
standard
Combination
Right to Risk Information
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Right-to-know balance
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Employer perspective
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Employee perspective
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Protection of trade secrets important
Need to be informed
Right to know has little effect without
power to change situations
Right to change situation
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Proposed standards for employee exit from a
hazardous situation:
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Good-faith subjective standard – Requires only
that the worker honestly believe that a health
hazard exists.
Reasonable person standard – Requires that the
belief be reasonable under the circumstances that
a health hazard exists.
Objective standard – Requires evidence, usually
from an expert, that a threat exists.
Managing Workplace Hazards
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TRAINING is important to
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Giving the employees the right information
so they can make informed decisions
Topics should include:
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Education about the workplace hazards present
Employee rights and how to exercise these
rights
“The Nature of the Worker’s
Right to Know”
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Thomas O. McGarity
Employer reluctance to inform employees
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Paternalistic concern for the employee’s health
and well being.
Lack of employee education or training to put the
risk information to use.
Informed employees will likely demand higher
wages and/or safer working conditions.
Worker’s Right-to-Know
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Competing moral and practical
considerations
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Autonomy
Fairness
Utility/Efficiency
Innovation
Paternalism
Michael Davis
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“Some Paradoxes of Whistle-Blowing”
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Standard Theory of Whistle-Blowing
Problems (paradoxes) in standard theory
Less paradoxical theory
Test of new theory
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Standard Theory of WhistleBlowing
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Justified acts
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This paper is about moral justification
Definition
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Permitted by morality
Required by morality
Morally permitted and required for other reasons
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Revealing something not known
Intention to prevent something bad
To gain information through being trusted
Doesn’t reveal information for self-benefit
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Reveals what organization doesn’t want revealed
Standard Theory of WhistleBlowing (continued)
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Disloyalty is morally permitted when
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Organization to which whistleblower belongs will do
serious harm
Whistle-blower has identified a threat of serious and
considerable harm, reported it and concluded that the
report would have no effect
Whistle—blower has exhausted all internal recourse
Whistle-blower has evidence that would convince a
reasonable, impartial observer
Whistleblower has reason to believe that revealing the
threat will prevent harm at reasonable cost
Based on a moral requirement to prevent harm
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Three paradoxes
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Cost of whistle-blowing provides no
justification for central cases of whistle
blowing
Ambiguity in the term “serious and
considerable harm”
Prevention of “harm” instead of “moral
wrong” means the conditions meeting
standards of whistle-blowing are narrow
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Complicity theory
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Complicity presupposes wrong, not
harm
Creates a more compelling obligation
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Complicity Theory
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There is a moral obligation to reveal information to
the public when
What you reveal derives from your work in an
organization
2.
You are a voluntary member of that organization
3.
You believe that the organization has engaged in serious
moral wrongdoing
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You believe that your work for that organization will
contribute to the wrong if you do not reveal the
information
5.
You are justified in beliefs 3 and 4
6. Hall,
Beliefs
3 and 4 are true
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Complicity versus Whistleblowing
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Condition 1 means revealer not a spy
Voluntary participant means revealer is not coerced
Condition 3 means moral wrong, not harm
Condition 4 does not require prevention, only belief that
behavior is wrong
Condition 5 requires truth revealer to be justified and
correct about moral wrong
Complicity does not require going through channels
No circumstances of morally permitted, but not required
with complicity theory
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