Business and Society Chapter Notes

Chapter 17

Employee Stakeholders and Workplace Issues

LEARNING OUTCOMES

After studying this chapter, you should be able to:

  1. Identify the major changes that are occurring in the workforce today.
  2. Outline the characteristics of the new social contract between employers and employees.
  3. Explain the employee rights movement and its underlying principles.
  4. Describe and discuss the employment-at-will doctrine and its role in the employee’s right to not be fired.
  5. Discuss the right to due process and fair treatment.
  6. Describe the actions companies are taking to make the workplace friendlier.
  7. Elaborate on the freedom-of-speech issue and whistle-blowing.

TEACHING SUGGESTIONS

INTRODUCTION – The employer/employee relationship is central to business’s role in society. The authors devote two chapters to the subject, with this being the first. They discuss some of the changes occurring in the workplace and to the social contract, as well as the employee rights movement. Particular areas of interest include the right to not be fired without just cause, the right to due process and fair treatment, and the right to freedom of speech in the workplace. These employee stakeholder issues entail economic, legal, and ethical responsibilities.

KEY TALKING POINTS – The issues discussed in this chapter should be highly relevant to the students, because they hope to be employees of companies in the near future, if they are not already. The doctrine of employment-at-will has the potential to affect each of them, both directly and significantly, especially as companies expand internationally and navigate their way through a global economic recession. Employers that outsource jobs to cheap labor locales rely on employment-at-will to allow them to terminate employees as they see fit, without any legal consequences. Of course, this same doctrine is what allows an employee to change jobs quickly and easily. Students are often surprised that at its most basic level, the employment-at-will doctrine permits employers to terminate employees as long as the decision is not based on discrimination. After studying the basic rule, students are eager to learn the exceptions to this concept.

Much has been written about employee rights and due process in the workplace. As pointed out in the textbook, employees have routinely been expected to forego their civil liberties when they enter the workplace. Organizational theorists might question an organization’s ability to operate efficiently without a command-and-control bureaucratic structure, but employees are increasingly demanding the right to be treated fairly and as something more than a machine part. Marjorie Kelly addresses the need for democratic principles in the governance of corporations in her book The Divine Right of Capital (San Francisco: Berrett-Koehler Publishers, Inc., 2003). Students usually are willing to open up and discuss their ideas regarding due process in the workplace and will describe their current employer’s due process procedures when questioned.

The most dramatic topic in this chapter is the question of freedom of speech, particularly that of whistle-blowing. As the textbook mentions in Figure 17-5, several movies have been made about true-life whistle-blowers. Although several of them are now dated, students can view graphic representations of some of the very real hazards whistle-blowers encounter. In addition to informing a discussion of employees’ right to free speech, these movies are also excellent vehicles with which to approach the concept of moral courage. After viewing one or more of the movies listed in Figure 17-5, students quickly grasp the concept of moral courage and why it is a relevant topic in a business and society class. These movies depict dramatic situations that students may never encounter. But they will encounter situations where they will be asked to do something they consider unethical, and that is when moral courage becomes a precious commodity. Instructors also may want to point students to other examples of whistle-blowing. In 2002, Time Magazine recognized Sharon Watkins, Cynthia Cooper and Coleen Roley as its persons of the year for blowing the whistle on illegal and unethical practices at Enron, Worldcom and the FBI, respectively.

PEDAGOGICAL DEVICES – In this chapter, instructors may utilize a combination of:

Cases:

The Waiter Rule: What Makes for a Good CEO?

To Hire or Not to Hire

The Travel Expense Billing Controversy and the False Claims Act

Family Business

Should Business Hire Undocumented Workers?

Nike, Inc. and Sweatshops

Felony Franks: Home of the Misdemeanor Weiner

Goodbye, Indiana- Hello, Mexico: The Whirlpool Plant Closing

A Moral Dilemma: Head versus Heart

Wal-Mart and Its Associates: Efficient Operator or Neglectful Employer

The Case of the Fired Waitress

After-Effects or After-Hours Activities: The Case of Peter Oiler

Is Hiring on the Basis of “Looks” Discriminatory?

The Case of Judy

Ethics in Practice Cases:

Manager’s Makeshift

Rowdy Recruiting

Spotlight on Sustainability:

Employees are Key to Sustainability

Power Point slides:

Visit for slides related to this and other chapters.

LECTURE OUTLINE

  1. THE NEW SOCIAL CONTRACT
  1. THE EMPLOYEE RIGHTS MOVEMENT
  2. The Meaning of Employee Rights
  1. THE RIGHT NOT TO BE FIRED WITHOUT CAUSE
  2. Employment-at-Will Doctrine
  3. Legal Challenges to Employment-At-Will
  4. Public Policy Exceptions
  5. Contractual Actions
  6. Breach of Good Faith Actions
  7. Moral and Managerial Challenges to Employment-at-Will
  8. Terminating an Employee with Care
  1. THE RIGHT TO DUE PROCESS AND FAIR TREATMENT
  2. Due Process
  3. Alternative Dispute Resolution
  4. Common Approaches
  5. The Ombudsman
  6. The Peer Review Panel
  1. FREEDOM OF SPEECH IN THE WORKPLACE
  2. Whistle-Blowing
  3. Consequences of Whistle-Blowing
  4. Government’s Protection of Whistle-Blowers
  5. Sarbanes-Oxley Whistle-Blower Protections
  6. False Claims Act
  7. Management Responsiveness to Potential Whistle-Blowing Situations
  1. SUMMARY

SUGGESTED ANSWERS TO DISCUSSION QUESTIONS

Students should recognize that their answers to these discussion questions should be well reasoned and supported with evidence. Although some answers will be more correct than others, students should be aware that simplistic answers to complex questions, problems, or issues such as these will never be “good” answers.

1.Technology and automation and globalization are two of the major forces impacting the employee rights movement. I rank technology first because it affects every business, and machines don’t demand rights. The worker rights movement is just one more reason that an employer faced with the opportunity to replace workers with machines would jump at the chance to do so. Globalization is second because workers in other countries (e.g., China or Vietnam) work for much less pay and expect fewer rights that American workers do (although recent events suggest that Chinese workers are beginning to demand additional employee rights). Further, as firms attempt to remain competitive and profitable during a global economic recession, they use both technology and workers in other countries to eliminate U.S. jobs and control fixed costs.

2.The employment-at-will doctrine means that either the employer or the employee can terminate the employment contract at any time, for any reason other than discrimination. It is being eroded because the courts are restricting the employer’s ability to fire employees through public policy exceptions, contractual exceptions, and breach of good faith actions. I think the one-sided erosion of employment-at-will (i.e., employers’ right to fire is being abridged) is a good thing. Employers and employees do not enter into the employment contract as equals. Employers hold much more power than do employees, so something that helps equalize the balance of power is a good thing. Further, despite the willingness of courts to recognize limitations to the employment-at-will doctrine, companies eliminated countless U.S. employees during the global recession (illustrating the imbalance of power between employers and employees).

3.Due process is the right to receive an impartial review of one’s complaints and to be dealt with fairly. Employers utilize a variety of tactics to provide due process, including open door policies (for this to be effective, the employee has to trust the manager and to be sure that his/her complaint will be dealt with fairly), some type of hearing procedures, providing an ombudsman, or granting decision-making authority to a peer review panel.

4.I would institute a peer review panel, making sure that employees from every level of the company were represented on the panel. There are distinct class and power differences between managers and workers, and different levels of managers. This hierarchy often manifests itself in distrust among the different levels, so any process that relies solely on upper managers to adjudicate outcomes will be distrusted by a large percentage of the employees. A properly constructed peer review panel would help overcome that obstacle.

5.I have always been sympathetic to whistle-blowersand still am. Organizations hold a great deal of power over their employees, and often expect the workers to do things that many consider unethical. People who are willing (and have sufficient moral courage) to defy the organization and point out the wrong-doing should be praised and held in high esteem. Furthermore, many whistle-blowers undertake the task to report illegal and unethical conduct at the risk of losing their jobs, future livelihoods and possibly even their friends and family.

6.Anything that can be done to provide incentive for whistle-blowers and to protect them is a step in the right direction. If someone is willing to risk their families, their jobs, maybe even their lives, they certainly should share in the financial recovery. Even if it is a large amount, it probably isn’t enough to compensate the whistle-blower for all s/he went through (see Connie Alderson’s comment in the textbook). In some cases, the amount may not compensate the whistle-blower for the potential loss of their livelihood. Further, as whistle-blowers are often subjected to extortion and terrorist acts from their employers, the government should be doing all it can to protect the whistle-blower.

GROUP ACTIVITY

Divide students into groups of four to five students. Ask students in the class to bring in the employment manuals from their current jobs. Distribute the manuals among the groups. Each group should identify what rights workers have under the manual with regards to the following (1) termination, (2) due process and (3) freedom of speech in the workplace. Specifically, students should determine whether employees have contractual rights to employment under the policy, the procedures involved in a due process proceeding, and mechanisms employed by the company to encourage freedom of speech in the workplace. Students should summarize these issues in a memo. Instructors may want to attach the memos to the various manuals and allow the students to review these memos before, during and after class to obtain a sense of different strategies and approaches used by a variety of companies regarding these issues.

INDIVIDUAL ASSIGNMENT

(Note: This Assignment also may be used in conjunction with Chapter 10)

Distribute the following instructions to each student:

Research and describe how U.S. companies have employed the doctrine of employment-at-will during the global economic recession. Evaluate how this response compared to non-U.S. companies’ treatment of labor during the recession andhow different responses to laborhave impacted the U.S. and global economy. Finally, address in your written response how flexible labor policies affect the U.S.’s ability cope with a recession.