WHAT YOU DON T NOW CAN HURT YOU - OnlineAgencyto ethics at work?" Coming through at 19% was "Do the...

2514 Stenson Dr | Cedar Park TX 78613 | 512-336-1005 | Fax 512-336-1008

BUSINESS ETHICS PRINCIPLES IN TEAM DEVELOPMENT MODULE EI ~ ETHICAL DILEMMAS AND THE LAW | © 2010 | of 14

BUSINESS ETHICS PRINCIPLES IN TEAM DEVELOPMENT MODULE EI ~ ETHICAL DILEMMAS AND THE LAW

WHAT YOU DON’T KNOW CAN HURT YOU Hi, I'm Carla Woodhouse, and with me is Bob Rosner. He is the best-selling author whose email is often flooded on a daily basis from people who have ethical concerns at work.

And Carla has had 20 years in management so she has spent countless hours dealing with ethics from an organizational perspective.

Now, why do we even need to take an ethics program?

I did a poll in which I asked the question "Which movie title best describes your organization's response to ethics at work?"

Coming through at 19% was "Do the Right Thing." "Catch Me if You Can" 22%, "Missing" at 27% And the number one movie title describing ethics at work "Little Shop of Horrors" at 33%

So like you, I found that poll was funny with its catchy movie phrases. But in the middle of my laughing, I also found it discouraging that only 1 in 5 people feel that their organizations do the best that they can. I would like to see more people convinced that their organizations hold a high ethical standard. So what can we do as companies and as individuals to turn that around?

Carla, everything I need to know about ethics at work can be summed up by a bike lock. A bike lock? I was walking down the street and a close friend of mine was chaining up his bike. I said "You're a fool, you're wasting your time; a thief could break that lock in 2 seconds. And my friend said "I'm not worried about a thief, I'm worried about an honest person becoming a thief." And that's the story behind ethics policies. Rather than getting upset that there's ethical rules, view them as a way to give you guidance, to point you in the correct direction, so you consistently do the right thing at work.

And I understand it's tough out there. With performance pressures and schedule deadlines and even ambiguity and gray areas about our own corporate policy it's tempting to sometimes take the short cut and expedite what we're doing so we can get our work done. Some people have heard about the "fog of war." I like to refer to that as the "fog of work," but we need to remember that the decisions we make can have very real consequences.

And speaking of consequences Carla, it's tough to do business from a prison cell or a perp walk. Call me a wild-eyed optimist, but despite all the headlines and ethical lapses of corporate leaders today, I believe in the goodness of most organizations and individuals. We want to do the right thing. But as Carla said, we're stuck in this "fog of work." It's disorienting. Sometimes it's tough to figure out what's the right thing to do.

This video is designed to help you and your organization wade through the gray and ambiguous areas and give you the tools to consistently make the right decisions.

Our next question, "Isn't being ethical as simple as doing the right thing?"

Alexander Hamilton once said "Those who stand for nothing fall for anything.”

Many of the ethical decisions we face at work fall into a classic pattern: right vs. wrong. Doing things the correct, legal, moral way or going over to the dark side, beginning to push some ethical boundaries.



Let me give you a few examples. There's lying or making a real commitment to telling the truth. There's obeying the law, or there’s trying to work your way around (breaking) the law, skirt what's expected of you.

And finally, there's paying bribes, or accepting bribes, and doing business legitimately.

Anyone who has ever found themselves in any of these circumstances knows they can be really tough. But believe it or not, when it comes to ethics, right vs. wrong are relatively easy compared to what Carla's going to cover.

So Bob's right. It is tough when you have right vs. wrong decisions, but imagine the challenges when your decisions involve right vs. right. For instance corporate policies might conflict directly with the trust of a coworker. Let me give you a story. I was in my office one day when a worker rushed in and said "I'm so upset I don't know what to do!" She said she had walked into the restroom just to wash her hands and she overheard one person telling another person about a group of people that were going to get fired. She looked at me and said "Some of these people are my best friends, what do I do?" She was conflicted between keeping it confidential or telling her friends what was going to happen so they could prepare. Sometimes ethical decisions don't have clear cut guidelines. And it's going to be up to you to weigh the pros and cons, so that you can decide what's best for you.

Our final challenge is up here: our ability to rationalize.

Saying things like "Everybody does it." "No one will ever know." "It's not illegal." "No one will be hurt."

That leads us down a slippery slope, which also leads us to our next question which is "So why do people break the rules at work?"

"I can resist everything but temptation," Oscar Wilde.

For thousands of years, from Ancient Greece to Rome we've struggled to come up with a really good definition for ethics. But it's complex. It involves values beliefs, morals, even religion, so for the workplace, we've distilled it down into one simple concept: unwarranted gain.

You're right, Carla. "Unwarranted gain" is a great definition of ethics. But it doesn't stop there. There's one other factor to consider, and that's temptation. Often, going the unethical route brings certain rewards and perks that entice you to go down that path. So let's outline the four main considerations in terms of temptation in the workplace.

Money. Woody Allen once said that money is better than poverty, if only for financial gain. Information. In today's workplace, information is power. Status. Getting a promotion or special recognition that you didn't actually earn. Perks. Tickets in the luxury box for the concert of the year. Wow!

But there is an interesting relationship between perks and temptations. The thrill of temptation --I'd rather have a strawberry milkshake --than the short term consequences of something else like a big heaping tablespoon of castor oil --can sometimes cloud our judgment. I've learned as a professional that I have to consider my actions and the long-term effects that they may have.

The next question we're going to address "What are the biggest mistakes we make in terms of ethics at work?"



A recent poll by the Society for Human Resource Management asked "What reason do employees give for breaking the rules?"

18% said "To resist a competitive threat." 22% said because they rationalize that "Everyone else does it." "To help the organization survive," 30% "To meet a difficult schedule," 38% And the number one response to meet an overly aggressive business or financial objective, 50%.

All ethical journeys should begin with a good long look at yourself. The tendency when it comes to ethics is to point your finger at your organization, at other people, and in point of fact, the whole journey needs to begin by examining your own beliefs, your own values, what you won't do to get ahead. Another consideration: you can be "dead right." People who take an ethical stance have lost opportunities. They've lost sales. They've even lost their jobs. There can be a cost and a consequence to acting ethically. And finally, just following orders doesn't cut it anymore. Carla I got an email from a bookkeeper and she was asked by her two bosses to hide some money in the business. She knew it was wrong, but she felt it was a direct order --she had to do what she was told. She did it. She is now sitting in jail, because her two bosses were able to cover their tracks. Doing the right thing, doing the ethical thing, is seldom the easiest thing to do, but in the long term, it's always the right thing to do.

Next we're going to look at some examples of just how we can get in trouble at work.

The ethics resource center did a poll where they asked that very question of employees "How do you get in trouble at work?"

18% of you said "Withholding needed information." 19% of you said "Lying." "Misrepresenting hours worked" at 20% And the number one response abusive or intimidating behavior, 21%.

There are a lot of ways that we can get in trouble at work. And I can give you a laundry list, but that would take 3 to 4 hours. In the 2 minutes that we have, we're going to simplify this for you down into 3 categories that involve abuses that can lead to problems. And then we'll give you some examples.

Carla the first category is abuse of power, and unfortunately abuse of power is far more common in today's workplace, than many of us realize. Two examples: sexual harassment and bullying. And I can tell you from my email, I get flooded with emails from people who feel like they're being bullied in today's workplace. So there are two types of ways you can express power. There's persuasive power, and anybody in business is in the persuading business, so there's an acceptable range. But then there are the times where the persuasion goes too far -- where you force somebody to do things or believe things that they really don't believe – And then there's coercive power, and coercive power is always bad, "Do this, or I'm going to fire you."

And our second category is abuse of knowledge. Misusing intellectual property or even withholding information are two great examples. For instance, let's say you're in sales and there is a sales contest going on. You have information that would help another person make a sale, but you want to win the contest and you withhold that information. That's abuse of knowledge. We're going further into an information society and this is going to become a bigger risk. There are two ways that you can get your information: from the public domain -- and there are a lot of rules surrounding that; we generally know how to behave in that area. But there's also information from the private domain. There are not a lot of guidelines when it comes to obtaining private information, so know your boundaries.

And finally, there is abuse of access and relationships. Two examples here: insider trading or preferential treatment. Now we all hyper focus today on technology and it is important, but the bottom line is, a lot of business is still done through networks and through who you know. So let's go back to insider trading. There is appropriate use of your relationships and who you know and then there's pushing it too far, getting information you shouldn't have and profiting from it.



Now we're going to look at "What are the first steps you need to take to maintain your ethics at work?"

H.L. Mencken once said "Conscience is the inner voice that warns us that someone may be looking."

The first step in your journey to an ethical workplace should always begin by knowing your corporate policies and your corporate code of ethics. You would never get in a car and drive down the street without knowing the speed limit. It's the same when it comes to ethics at work. And let me warn you, there's no such thing as a stupid question. If you don't understand a policy, ask, because it sure beats jail time.

Whereas Bob can be a little cynical sometimes, I tend to accentuate the positive in people. But maybe a little bit of cynicism in ethics isn't such a terrible thing. I'm always on guard for abuses of power, knowledge, access and relationships in myself as well as in others.

The next step is to have a contingency plan a lot of us are sitting at our desks and we get confronted with an ethical challenge. It's tough because you're in the fog of work; there's stress, pressure, deadlines. It's tough to sort out what's the best path to take. That's why it's important on a regular basis to sit back and ask yourself, "If this happens as a possible abuse of power what will I do?" An abuse of knowledge, an abuse of access or relationships... To think it through and have a plan so you're not surprised when an ethical dilemma comes your way.

And even with the best laid plans, sometimes there are surprises, and you need to act quickly. I do this with a simple 3-step test. The first is to say "Are there butterflies in my stomach?" Just like when you get on stage it's a little scary and exciting at the same time, ethical dilemmas can create the same feeling and we get butterflies. If you have that feeling, think about turning your position. Secondly, I think about what my dad would say if I brought this to him: would he support me wholeheartedly or would he give me a stern warning? And finally would I want this dilemma on the headlines?

Committing to an ethical path as an organization or as an individual can be overwhelming; it can be daunting so let's keep things in perspective. The journey to an ethical workplace starts with one person's conscientious ethical actions.

And next, "Where can we turn for guidance to maintain our ethics at work?"

Henry Ford once said "Most people spend more time and energy trying to get around problems than trying to solve them.”

In addition to going around problems, often ethical challenges cause us to feel isolated, kind of like taking a test by yourself within a room with nothing more than the test paper and a pencil. But ethics is an open-book test. There are people and other resources and even experiences that can guide you along the way.

Carla I got an email from someone who knew that the guy who was about to be hired to be her boss had lied on his resume. She was frightened and scared and she just didn't know what to do. Finally she summoned her courage, and she went to human resources and she suggested that they check his references. They did and he wasn't hired. She learned a couple of valuable lessons. One, you shouldn't be frightened, you need to stick to your ethical guns at work, even if there's a risk involved. And two, there's a value in not approaching things by yourself. Get other people involved. Oftentimes, people will come to support you in your ethical stand.

But it's not just people that can offer you options. There are a lot of other resources other than Dr. Phil. Other options include,

laws or regulations, industry or professional practices, organizational codes of conduct, policies, cultures, or norms, and finally our own personal values.



Our next question, "What can you do if someone asks you to do something unethical?"

Will Rogers coined the phrase "Live your life as if you wouldn't be ashamed to sell your parrot to the town gossip." Often when we're faced with an ethical challenge, we see it as a fork in the road: the ethical path, "right with pain," or the unethical path, "wrong with gain."

Maybe that's why they call it a dilemma.

Instead let's keep looking for the third path, what we call the "trilemma." One tip: the road less traveled just might be your best option. Another strategy that we don't often use that works in this situation is our institutional knowledge and even our internal networking. Do a little bit of digging and seek out other people who may have had similar problems in the past. They can offer you insights, even a new perspective. And don't forget the people that you trust. After all, you trust them for a reason, so go talk to them. Next, you may have to report it. Ethical dilemmas are seldom just about the individual; they affect the entire organization. Knowing about something may make you culpable. Finally, if your values and your beliefs don't line up with the organization or the person who is asking you to do something, your option may be to quit.

In this program we've given you some tips, some strategies and some insights into how to better handle your ethical dilemmas at work. It's important to remember ethical policies need to live in here as well as in here, …………..because you don't want to end up here.

LESSON 1 ~ COURSE INTRODUCTION Once you've established the facts and issues of a business ethics problem, you may feel confused about where to go next. Does applying what you know to a particular problem seem a bit daunting? Don't worry. After you understand the problem as best you can, you should check current laws. In this course, you'll learn how you can research legal issues without becoming a lawyer.

Selling customer information sounds like a good idea if you're looking for new forms of revenue. Perhaps you've heard that companies have sold or have tried to sell customer phone numbers, home addresses, and statistics regarding customer shopping habits. But what happens to the goodwill you've built with customers when they learn that you're selling information they thought was confidential? If you put yourself in your customers' situation, you'd probably prefer that a company not share that data. And is it really all right to sell customer information to the highest bidder? Isn't that dishonest? This is an ethical dilemma you need to research.

The first step in answering the questions raised by an ethical dilemma is to identify the relevant law. The law sets a baseline for behavior that you shouldn't venture below, so you can't make a business decision without considering the law. What should you do if you're not exactly sure what the law is? If your company has in-house counsel, you can talk to the company's attorney. But you may not have an attorney on-site, or you may not feel comfortable approaching them just yet. If your company is smaller, you may not have in-house legal counsel. Although you could consult an attorney on your own, legal advice is expensive. Finally, whatever decision you make, you need to make it quickly. In this course we'll show you another option for responding to ethical dilemmas — finding the law on your own.

LESSON 2 ~ LOCATING RELEVANT LAWS ON THE INTERNET Ethical dilemmas almost always have legal implications. This may seem obvious, but it's sometimes forgotten when you're making a difficult business decision. After completing this lesson, you should be able to research legal issues on the Internet

As a business manager, you should have some basic knowledge about the principles of business law. For example, should the CEO of your company misstate numbers in an accounting report to make profits look higher? The Sarbanes-Oxley Act of 2002 requires that the CEO and CFO certify that the company's financial reports fairly present the conditions of the company. Under Sarbanes-Oxley, your CEO could be liable for misrepresenting the company's financial conditions.



If you can't ask your attorneys about things you suspect are legal issues, you can get started in your quest to find the law by doing the following:

Asking a friend or relative with a law degree to answer your questions. Consider that you might not get the best advice if your friend doesn't specialize in business law.

Contacting a regulatory agency. Educating yourself through a textbook that covers the "legal environment of business." If you choose this option, make sure you locate a book aimed at business students rather than law students. Legal environment of business textbooks get to the essence of legal rules.

In many ways, finding an attorney to identify and respond to legal issues is the best thing to do. Law students spend about a year learning how to research the law. You're probably in a hurry and don't want to go to law school, but you may be able to find some relevant law yourself. Finding law can be a difficult task, but you don't necessarily need to find the actual law. Your goal should be to learn about the general legal issues relevant to a decision you need to make. You can do this by engaging in careful searches on the Internet. You can use Websites to find articles or summaries that shape your thinking about the law.

CAUTION: The focus in this course is an American perspective that’s not necessarily shared by businesspeople in other parts of the globe. Using the law as a guide to ethical business actions may be less valuable tool in other jurisdictions.

FINDING THE LAW WITH AN INTERNET SEARCH Your goal is to learn a little about the law to help guide your decisions. The Internet is a great resource for legal research. Before you go to the Internet, though, it might be a good idea to review a legal environment of business textbook to get a sense of your subject matter. For example, your boss might be asking for you sex in exchange for a promotion. A quick review of a legal environment of business textbook will refine your description of what's happening, and you'll know to search for law related to "quid pro quo sexual harassment."

Once you have a basic understanding of the words an attorney might use to describe an issue, you should start your search at the FindLaw Website: www.FindLaw.com. FindLaw contains a lot of information for businesses. The Website has articles about contracts, debts and bankruptcy, employee and employer rights, intellectual property, small business concerns, business deductions, and more.

You can browse the collection of articles on FindLaw, or you can search for text by following the Search FindLaw link. When the search fields appear, type the words you want to find in the field on the right and click the Go! button.

Searching FindLaw can produce an overwhelming number of references. Searching for the term "sexual harassment" produces almost 13,000 results. You can narrow a search by looking in just one area of FindLaw — you might search for "sexual harassment" in just the Article Library. This produces about 400 results, which should be plenty to get you started.



Perhaps you're thinking about breaking a contract because that might be cheaper than complying with the agreement. You locate an article called "Top 10 Reasons to Avoid Breaching a Contract." The article says that you can be sued and there may be costs that you haven't considered — damage to your reputation, legal fees, damages awarded in the lawsuit, and time away from your business.

Suppose you're interviewing candidates for an open position. The employee who used to fill this position was frequently absent from work because of a disability. You want to find the best candidate — someone who's well-qualified, articulate, and personable. You're also interested in hiring a healthy employee. Are there restrictions on the types of questions you can ask in your interview? You go to FindLaw, search for the term "interview questions," and locate several articles concerning job interviews and complying with the Americans with Disabilities Act. These articles say you aren't permitted to ask specific questions about a candidate's disabilities. Instead you should ask questions about the candidate's abilities. You also learn that asking questions about disabilities is a violation of the Americans with Disabilities Act. Gaining this knowledge was time well-spent and easy to accomplish.

Other Websites also provide summaries or links to short articles about particular legal topics. Here are some sources you can investigate:

WEBSITE DESCRIPTION Legal Information Institute www.law.cornell.edu

Topics such as First Amendment rights, employment law, contracts, Constitution, and legal cases.

Catalaw www.catalaw.com

A catalog of Websites of worldwide law. Topics include environmental law, tax law, alternative dispute resolution, and contract and remedy law. You may narrow your search by country.

Megalaw www.megalaw.com

Topics include labor and employment, unfair competition, media law, consumer law, libel law, damages, antitrust law, bankruptcy law.

Yahoo www.yahoo.com News articles and other general information about legal issues.

Now you know how to find general information about the law. But how do you know which laws should concern you? Consider the following two examples:

SEXUAL HARASSMENT Sexual harassment has been defined as "unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature [that] explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance, or creates an intimidating, hostile or offensive work environment." As a business manager, you should be concerned about sexual harassment in the workplace by both supervisors and coworkers. Title VII of the Civil Rights Act of 1964 prohibits discrimination with respect to terms and conditions of employment in the workplace on the basis of race, color, sex, religion, or national origin. Sexual



harassment is prohibited under Title VII because it's a form of discrimination that alters the "terms and conditions of employment" on the basis of sex. Under statutory law, if an employer allows sexual harassment to alter the terms and conditions of employment, the employer may be liable to the harassed employee. The statute is silent about how the harassed employee must demonstrate his or her case, so the courts have laid out what elements a plaintiff must demonstrate. The Supreme Court recently decided two cases, which lawyers refer to as Faragher and Ellerth. These cases consider exactly when an employer will be liable for harassment. The courts recognize two general types of harassment: quid pro quo harassment and hostile work environment harassment. If a supervisor tells an employee that he or she must offer sexual favors or suffer a job detriment, the supervisor has engaged in quid pro quo harassment. If the employee actually suffers a job detriment, both the supervisor and the employer are liable to the employee. The employer is liable to the harassed employee because, under agency theory, the employer is liable for the acts of its agents, and a supervisor is an agent of an employer. Hostile work environment harassment occurs when harassing conduct is based on sex and is so severe and pervasive that it alters an employee's working conditions. Hostile work environment harassment typically occurs over an extended period of time. For example, if a coworker repeatedly makes sexual innuendoes to or touches another employee, this coworker may be engaging in hostile work environment harassment. The Supreme Court makes a distinction between a coworker and a supervisor creating the hostile work environment. If a coworker is the harasser, the employer is liable if it knew or should have known about the harassment. In other words, if the harassed employee complains about the harassment, the employer has notice of the harassment and should then take steps to remedy the harassment. If the employer knows and does not take action, it will be liable to the employee. If a supervisor creates the hostile work environment, the employer will automatically be liable for the supervisor's harassment unless the employer can show two defenses: (1) the employer exercised reasonable care to prevent or correct the harassing behavior, and (2) the employee failed to take advantage of preventative or corrective opportunities. Given this standard of liability, it's important for an employer and for you as a business manager, to take an employee's report of sexual harassment very seriously. Courts vary on what they consider "severe and pervasive" conduct. If you're concerned about what the courts consider severe and pervasive and how this would affect your company, you can search for hostile work environment cases in the circuit courts that govern your company.

THE SARBANES-OXLEY ACT Starting with the fall of Enron in December 2001, state and federal legislators passed legislation that imposes duties on directors, officers, employees, auditors, and accountants of corporations with regard to financial transparency. For instance, the corporate laws of many states require directors and officers to act in the primary interest of the shareholders. All the decisions made by these officials should serve the interests of shareholders. Corporate officials were also subject to securities regulations, tax laws, and other government mandates. These obligations have become more numerous with the passage of the Sarbanes-Oxley Act of 2002, a new federal statute passed as a result of a wave of corporate accounting scandals. The act significantly enhances the obligations of corporate directors and officers. It requires corporate officers to sign quarterly and annual filings submitted to the Securities and Exchange Commission. The officers' signatures indicate that they have reviewed the filings and have found them to be true and complete representations of the company's financial status. In addition to requiring directors and officers to certify company filings, the act forbids them from accepting personal loans from the company unless the loans are also available to outsiders. The



act also prohibits officers and directors from buying or selling shares of equity security during a blackout period. A blackout period occurs when individual shareholders are barred from conducting any trading. If a company wants to impose such a period, it must give 30 days notice before declaring the blackout. Although many provisions of the Sarbanes-Oxley Act affect only boards of directors and corporate executives, there have been important changes to the U.S. Criminal Code that affect all levels of employees. Congress made it a crime for any person to knowingly make, alter, destroy, or conceal a false entry to any business record if the entry is made with the intent to impede, obstruct, or influence an investigation or the contemplation of such a matter. This new provision means that even if no investigation has been launched, businesspeople could still commit a crime if they knowingly destroy a document they think could be used in an investigation. Businesspeople will have to be more vigilant about record keeping, because this crime is punishable by up to 20 years in prison. The Sarbanes-Oxley Act also makes it a crime to retaliate against any person who provides authorities with information about the potential commission of a federal offense. The act makes it clear that retaliation against whistle-blowers won't be permitted if the victim has provided truthful information. This represents an important constraint on managers who ordinarily have the power to sanction subordinates. SarbOx and other new corporate accountability laws were passed with a stiff warning that companies will be expected to comply with their requirements.

A business manager may encounter many different legal questions. Here's a list that only scratches the surface of the legal issues a business may face: BUSINESS AREA SAMPLE QUESTIONS Accounting Who regulates accountants?

Advertising What labeling requirements does the FDA impose of food manufacturers?

Bankruptcy Which creditors have first dibs on company assets when a company declares bankruptcy?

Building Permits Which local agency issues building permits?

Business Insurance Can a business insurer avoid paying a claim if the business engaged in intentional misconduct?

Debt Collection What rules govern debt collectors?

Disabled Workers What does it mean to "reasonably accommodate" an employee?

Drug Testing of Employees

Should a company engage in drug testing at the pre-employment stage, or is it better to engage in random drug testing later?

Employee E-mail How private is employee e-mail?

Employee Records Do employees have a right to look at their company personnel files?

Employment Discrimination

Is it lawful for employers to prefer white employees if upper-level managers feel more comfortable around people like themselves?

Firing Employees Can a manager fire a subordinate because of a personality clash?

Hiring Alien Workers What paperwork must employers complete if they hire alien workers?

Illegal Contracts If a person signs a contract to purchase marijuana and the seller breaches the contract, does the buyer have any rights?



Leasing a Facility How can a business get out of a lease?

Loans What happens when a lender hides the truth about the interest rate that will apply to a particular loan?

Non-compete Agreements

In what circumstances will a court declare that a noncompete agreement is to restrictive?

Overtime Pay Who decides whether a particular employee is a manager exempt from federal requirements that employers provide overtime pay?

Sexual Harassment Can a man file a sexual harassment claim when male colleagues are teasing him to the point that it is causing emotional distress?

Workers' Compensation

In what circumstances can employees sue their employer for negligence?

Workplace Safety Does the law require employers to tell employees the details of chemicals they handle?

Writing Bad Checks How much can a business charge a customer who wrote a check that bounced?

TIMBERLAND Clothing manufacturer Timberland is a company guided by its values. Timberland CEO Jeffrey Swartz explains that the company must do more than provide money for shareholders and outdoor gear for customers:

"No longer will it be enough to measure business by profit, efficiency, and market share. Citizens must also ask how the private sector will contribute to standards of social justice, environmental sustainability, the health and strength of community, and the values by which we choose to live."

Because Timberland's ethical goals are so broad and ambitious, it does more than merely comply with the law. To achieve its vision of a better world, Timberland goes above and beyond what the government requires it to do. Timberland treats its employees around the world far better than the law requires. The company contracts with a plethora of international suppliers to manufacture its outdoor gear. Although many other companies have come under fire for their treatment of workers in overseas plants, Timberland has actively sought to ensure that its subcontractors comply with both the law and Timberland's internal code of conduct. In 2000–2001, a nonprofit firm audited all of Timberlands' facilities. The purpose of the audit was not merely to find out how the facilities were doing financially, but also to determine the noise level, the quality of lighting, and the air quality. Timberland reports that the voluntary audits have improved employee compensation, overtime payments, nondiscrimination, break times, and employee health and safety. Although Timberland initially tried to improve working conditions in suppliers' factories, it has terminated contracts with several organizations that haven't improved to the company's specifications. Timberland also holds training sessions for thousands of factory workers in China and the Dominican Republic. Local nongovernmental organizations give educational sessions on human rights, local labor law, and Timberland's Code of Conduct. Timberland isn't required by law to provide these training sessions, but the company sees them as integral to its success. Timberland also treats its employees in the United States in an exemplary manner. The company lets its full-time employees spend 40 paid hours per year doing community service. Timberland also provides financial and volunteer assistance to a myriad of community groups. Finally, the company



has committed to reducing its impact on the environment. It has taken steps to decrease carbon dioxide emissions, reduce energy consumption, and use recycled materials. Again, these policies go far beyond the requirements of corporate, labor, and environmental laws. Although Timberland is surely aware that the law doesn't require them to adopt these policies, the company doesn't feel limited by legal requirements. For Timberland, the law is a starting point for how they should treat employees and comply with regulations. The goals, values, and attitudes of the company help shape the company's substantive policies. One outcome is clear: employees, communities, and the environment benefit when companies such as Timberland meet and exceed the standards set by law. In addition, Timberland enjoys sustained corporate success in both monetary and nonmonetary terms.

Becoming familiar with the law is the first step in making tough business decisions. Although lawyers know best the answers to precise legal questions, you don't necessarily need a lawyer or even a law degree to find out what laws affect your business. Suppose your company plans to sell customer information. Consider what legal sources you'd want to consult to learn about the laws that govern the use of such information. These laws might say that a company can sell customer information as long as it does so within certain guidelines. Once you learn this, you might think that the law has made the decision for you. But even if the law doesn't prohibit selling customer data, would it be clear that you should advocate this practice? Make sure you consider both the short- and long-term consequences of the decision you make.

SUMMARY In this lesson, you learned that it's possible to use the Internet to research legal topics. If you have questions about the ethics and legality of a business decision, you can access websites such as FindLaw to determine what laws are relevant.

LESSON 3 ~ SOPHISTICATED SEARCHES FOR THE LAW If you want to find the law the way a lawyer or law student would, you need a basic understanding of the legal system. There are four sources of law: the legislative, executive, and judicial branches of government, and administrative agencies. After completing this lesson, you should be able to locate legislative statutes, executive orders, court rulings, and administrative regulations

LEGISLATIVE BRANCH The legislative branch creates laws. Both the federal and state Congresses create law by introducing a bill into either the House of Representatives or the Senate. If both houses of Congress vote affirmatively on the bill, the bill becomes law. You'll often see laws referred to as statutes. A statute is simply a law created by a legislative body.

The legislative branch creates two types of statutes: criminal laws and civil laws. Criminal law governs the relationships between an individual and the state. Civil law governs the relationship between two private parties, such as two companies or a company and an employee.

As a business manager, you'll need to be concerned with both types of law.

You'll find federal statutes in the United States Code and state statutes in the appropriate state code. For example, the statute citation 42 USC 2000e-2 provides the title (42) and section number (2000e-2) of the United States Code. You can use the FindLaw website to look up a statute:

www.FindLaw.com/CaseCode/uscodes



Title 42, Section 2000e-2 of the United States Code prohibits discrimination on the basis of race, color, religion, sex, or national origin.

You might want to see how a proposed bill affects your company. Do that at the Library of Congress Website:

http://thomas.loc.gov

Searching the Website displays a list of bills you can read. For example, you might want to see what the Online Privacy Protection Act of 2005 is all about.

When you've found the bill, you can see how it will affect your business.

There are other Websites where you can research legislative statutes.

FEDERAL STATUTES http://uscode.house.gov www.Law.Cornell.edu/uscode

STATE STATUTES www.FindLaw.com/llstategov www.Law.Cornell.edu/topics/state_statues.html

MUNICIPAL CODES www.generalcode.com/webcode2.html www.municode.com/resourses/online_codes.asp

EXECUTIVE BRANCH A second source of law is the executive branch. At the federal level, the president, his staff, and his cabinet constitute the executive branch. The federal executive branch creates law two ways: by making treaties and by issuing executive orders. State governors may also issue executive orders.

You'll be most concerned about complying with executive orders. For example, President Johnson issued Executive Order 11246, requiring government contractors to create affirmative action plans that encourage the hiring and promotion of minorities and women.

Presidential executive orders are available on the White House Website:

www.whitehouse.gov/news/orders

JUDICIAL BRANCH Federal and state courts interpret the Constitution and the laws passed by the legislative branches. When two parties disagree about the meaning of a statute, they bring the disagreement before the court. The court examines the language and legislative history of the statute to resolve the disagreement. The court will also consider the effect of earlier relevant case decisions, or precedents. Lower courts (the trial courts) must follow the decisions or precedents of higher courts (the appellate and supreme courts). The court's written decision is then printed in a reporter.



When people initiate a lawsuit, they file their case in either a state or federal trial court. At the federal level, the trial court is called the district court. There are 96 district courts in the United States. If you appeal a district court ruling, one of twelve federal circuit courts of appeals reviews the district court's decision. If you appeal the circuit court of appeals decision, the U.S. Supreme Court decides whether to hear the case.

You'll find U.S. Supreme Court cases in the U.S. reporter. The location of a case in a reporter is called the citation of the case. For example, the Supreme Court recognized sexual harassment as a form of discrimination in Meritor Savings Bank v. Vinson, citation 477 U.S. 57 (1986).

REPORTER VOLUME # REPORTER NAME PAGE # YR

477 U.S. 57 1986

The FindLaw Website provides easy access to federal case law:

www.FindLaw.com/casecode

You should be most concerned about disputes that could affect your business. For example, if your business is in California, you should pay close attention to Ninth Circuit court of appeals decisions, along with decisions in the northern, eastern, southern, and central districts of California. If your business is in Ohio, you should give special attention to Sixth Circuit court of appeals decisions, along with the northern and southern districts' courts of Ohio.

COURT STATES SERVED FIRST Maine, Massachusetts, New Hampshire, Puerto Rico, and Rhode Island

SECOND Connecticut, New York, and Vermont

THIRD Pennsylvania, Virgin Islands

FOURTH District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and West Virginia

FIFTH Louisiana, Mississippi, and Texas

SIXTH Kentucky, Michigan, Ohio, and Tennessee

SEVENTH Indiana, Illinois, and Wisconsin

EIGHTH Arkansas, Iowa, Minnesota Missouri, Nebraska, North Dakota, and South Dakota

NINTH Alaska, California, Hawaii, Idaho, Montana, Oregon, Nevada, and Washington

TENTH Colorado, Kansas, New Mexico, Oklahoma, Utah, and Wyoming

ELEVENTH Alabama, Florida, and Georgia

ADMINISTRATIVE REGULATIONS Congress has delegated the authority to make rules governing the conduct of business to federal regulatory agencies. The Securities and Exchange Commission, Federal Trade Commission, Equal Employment Opportunity Commission, Occupational Safety and Health Administration, and other agencies can all create regulations that affect your business.



State and local rules are maintained in state administrative codes or municipality administrative regulations, and those are often available on a Website. Federal agencies publish their proposed and final rules in the Code of Federal Regulations and the Federal Register. You can access these documents at the Government Printing Office Website:

www.gpoaccess.gov/nara/index.html

SUMMARY In this lesson, you learned that there are four sources of law: legislative statutes, executive treaties and orders, judicial cases, and administrative regulations. You also learned how to use the Internet to determine whether existing or proposed statutes, orders, cases, and regulations may impact your business decisions.

WHAT YOU DON T NOW CAN HURT YOU - OnlineAgencyto ethics at work?" Coming through at 19% was "Do the...

Documents

Transcript of WHAT YOU DON T NOW CAN HURT YOU - OnlineAgencyto ethics at work?" Coming through at 19% was "Do the...