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CHAPTER 7 : WHAT EMPLOYERS OWE EMPLOYEES
7.1 Loyalty to the Company Duty of loyalty - requires that an employee refrain from acting in a manner contrary to the employer’s interest. employee is obligated to render “loyal and faithful” service to the employer, to act with “good faith,” and not to compete with but rather to advance the employer’s interests. The employee must not act in a way that benefits him- or herself (or any other third party), especially when doing so would create a conflict of interest with the employer. Differing Concepts of Loyalty Loyal employees : being committed to the success of the organization. They believe that working for this organization is their best option... and loyal employees do not actively search for alternative employment and are not responsive to offers. Why are employees less likely to feel a duty of loyalty to their companies? Without any long-term employment contract = management is not making a long-term commitment to the employee The important role money plays in career decisions Another economic phenomenon affecting loyalty in the private sector was the switch from defined-benefit to defined-contribution retirement plans. Defined-benefit/ pension = The employer administers the plan and manages the investment risk, promising the employee a set payout upon retirement. In the defined-contribution plan, however, the employee invests a certain percentage of his or her salary in a retirement fund, where it is sometimes matched (partially or wholly) by the employer. Defined-benefit plans reward longevity in the firm, whereas defined-contribution plans reward high earnings over seniority. Thus, with the growth of defined-contribution plans, some reasons for staying with the same employer over time are no longer applicable. Freelance Or Contract Workers In The New “Gig” Economy : completing a professional job for a client, after which they move on the next client, always keeping their
independent status. We would not expect gig workers to demonstrate employer loyalty when they are not employees. Confidentiality Proprietary (private) information, the details of patents and copyrights, employee records and salary histories, and customer-related data are valued company assets that must remain in-house, not in the hands of competitors, trade publications, or the news media. Employers are well within their rights to expect employees to honor their duty of confidentiality and maintain the secrecy of such proprietary material. Trade secrets : information that has economic value because it is not generally known to the public and is kept secret by reasonable means. Might include technical or design information, advertising and marketing plans, and research and development data that would be useful to competitors. Nondisclosure Agreements : used to protect against the theft of all such information, most of which is normally protected only by the company’s requirement of secrecy, not by federal intellectual property law. Non-compete agreements : ensuring that employees with access to sensitive information will not compete with the company during or for some period after their employment there. The stated purpose of such agreements is to protect the company’s intellectual property, which is the manifestation of original ideas protected by legal means such as patent, copyright, or trademark. To be enforceable, non-compete agreements are usually limited by time and distance Trademark : (commercial identifications such as words, designs, logos, slogans, symbols, and trade dress, which is product appearance or packaging) copyrights (to protect original literary and artistic expressions such as books, paintings, music, records, plays, movies, and software) patents (to protect new and useful inventions and configurations of useful articles) Nonsolicitation Clause : protects a business from an employee who leaves for another job and then attempts to lure customers or former colleagues into following. 7.2 Loyalty to the Brand and to Customers Branding : creating, differentiating, and maintaining a brand’s image or reputation—is an important way to build company value, sell products and services, and expand corporate goodwill. Companies want and expect employees to help in their branding endeavors. However, protecting the brand can be a special challenge today, thanks to the ease with which customers and even employees can post negative information about the brand on the Internet and
Some of us gravitate toward independence and jobs or tasks we can accomplish alone. Others prefer team or project work, bringing us into touch with different personalities. Some prioritize getting the job done as efficiently as possible, whereas others value the journey of working on the project with others and the shared experiences it brings. Reducing Workplace Violence In violence based on traditional criminal intent, the perpetrator has no legitimate relationship to the business or its employees, and often the violence is part of a crime such as robbery or shoplifting. Violence between coworkers occurs when a current or former employee attacks another employee in the workplace. When the violence arises from problems in a personal relationship, the perpetrator often has a direct relationship not with the business but with the victim, who is an employee. In the fourth scenario, the violent person has a legitimate relationship with the business, perhaps as a customer or patient, and becomes violent while on the premises Codes of Conduct Companies have a right to insist that their employees, including managers, engage in ethical decision-making. To help achieve this goal, most businesses provide a written code of ethics or code of conduct for all employees to follow. A typical code of conduct, regardless of the company or the industry, will also contain a variety of standard clauses, often blending legal compliance and ethical considerations 7.4 Financial Integrity Insider Trading : The buying or selling of stocks, bonds, or other investments based on nonpublic information that is likely to affect the price of the security being traded For example, someone who is privy to information that a company is about to be taken over, which will cause its stock price to rise when the information becomes public, may buy the stock
before it goes up in order to sell it later for an enhanced profit. It is illegal, unethical, and unfair, and it often injures other investors, as well as undermining public confidence in the stock market. Bribe : payment in some material form (cash or noncash) for an act that runs counter to the legal or ethical culture of the work environment. Numerous factors help establish the ethics (and legality) of gift giving and receiving: the value of the gift, its purpose, the circumstances under which it is given, the position of the person receiving it, company policy, and the law. A well-written and effectively communicated gift policy provides guidance to company employees about what is and is not appropriate to accept from a customer or vendor and when. This policy should clearly state whether employees are allowed to accept gifts on or outside the work premises and who may give or accept them. If gifts are allowed, the gift policy should define the acceptable value and type, and the circumstances under which an employee may accept a gift. The U.S. law prohibiting bribery in international business dealings is the Foreign Corrupt Practices Act (FCPA), which is an amendment to the Securities and Exchange Act of 1934, one of the most important laws promoting transparency in corporate governance. Its main purpose is to make it illegal for companies and their managers to influence or bribe foreign officials with monetary payments or rewards of any kind in an attempt to get or keep business opportunities outside the United States. Ethical Leadership : guidance can be provided by the company through standard setting and the development of ethical codes of conduct and policies. Senior managers modeling ethical behavior and so leading by direct example also provide significant direction. 7.5 Criticism of the Company and Whistleblowing Pay secrecy : a policy that prohibits employees from disclosing or discussing salaries among themselves. The reason was obvious: Companies did not want to be scrutinized for their salary decisions. They knew that if workers were aware of what each was paid, they would question the inequities that pay secrecy kept hidden from them. In 2014, President Barack Obama issued an executive order banning companies that engaged in federal contracting from prohibiting such salary discussions Speaking Out on Social Media Right of free speech is generally not applicable to the private sector workplace and does not cover criticism of your employer. Does that mean an employee can be fired for criticizing the company or boss? Yes, under most circumstances.
