Employee Rights
Corporate management is similar to a government: they are centralized decision-making
bodies who have power and authority to enforce their decisions on subordinates concerning
the distribution of resources, benefits, and burdens, and they have a monopoly on the
power to which the subordinates are subject. Some observers hold that this power is so
comparable to the power of governmental officials that the moral limits placed on
governmental officials must extend to managers as well. As government must respect the
civil rights of citizens, managers must respect the moral rights of employees: the rights to
privacy, consent, and freedom of speech, among others.
There are important differences between corporations and governments, however.
Governmental power is based on consent, while corporate power is based on ownership.
Since managers’ power rests on property rights, they have the right to impose whatever
conditions they choose on their employees who freely and knowingly contract to work there.
Moreover, managerial power (unlike governmental power) is limited by the countervailing
power of unions, and employees can leave firms more easily than citizens can change
countries. Therefore, it may not follow that all of the safeguards afforded citizens should be
carried over to employees. Employee rights advocates counter that dispersed ownership
means that managers no longer function as agents for the owner of a firm (there is no
single owner), so property rights are no longer relevant. In addition, unions do not protect
many workers, and changing jobs can be a very difficult and traumatic experience.
Employees have some rights, in any case. Because of technical innovations, the right to
privacy is under attack more than ever before. Employees’ rights to privacy must be
balanced against employers’ rights to know certain information about their activities. Three
elements are relevant when considering this balance:
1. Relevance – the employer must limit his inquiry to areas that are directly relevant to
the issue at hand.
2. Consent – employees must be given the opportunity to give or withhold consent
before their private lives are investigated and should be informed of any surveillance.
3. Methods – employers must use ordinary and reasonable methods of inquiry unless
circumstances are extraordinary.
Other rights are even less certain. Workers may think they have freedom of conscience,
but if they discover that their firm is doing something that harms society, they have few
legal options available if internal management does nothing about it. The company has the
legal right to punish the employee who informs against the firm with firing or blacklisting
him or her. Though some authors have pointed out that this is a clear violation of an
individual’s right to freedom of conscience, the law nevertheless maintains that the
employee’s duty is to maintain loyalty and confidentiality towards the employer.
Whistle blowing, the attempt by an employee to disclose wrongdoing in an organization,
can take two forms. It is internal if it is reported only to management within the
organization. If it is reported to others (such as governmental agencies or the media), then
it is external. Whistle blowing can have heavy personal costs, but it is morally justified when
there is clear evidence that the firm’s activity is seriously harming others and reasonable
attempts to prevent it by informing management have failed, as long as it is reasonably
certain that the whistle blowing will prevent the harm and the harm is serious enough to
justify the injuries it will bring upon the whistleblower.
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However, the fact that it is sometimes justified does not mean it is obligatory. Whistle
blowing is only morally required when the employee has a moral obligation to prevent the
wrong that whistle blowing will prevent, and the wrong involves serious harm to society’s
overall welfare, serious injustice against a person or group, or serious violation of people’s
basic moral rights.
Whistle blowing has serious consequences for the employee. It is argued that employees
have a contractual obligation to the employer and to keep all aspects of the business
confidential and to pursue the best interests of the company. So, whistle blowing violates
this agreement. While it is true that there is an agreement, it is not unqualified with
unlimited obligations toward the employer. In a situation, if an employee’s only way of
prevent other people from being harmed is by blowing the whistle on one’s employer, an
employee agreement cannot require the employee to remain silent. However, this right is
only if internal whistle blowing was attempted first, and it the harm remaining silent is
greater than the harm that will result to other parties by whistle blowing.
Many companies have now set up “ethics hotline” that employees can use to illegal or
ethical violations anonymously to upper management or to an “ethics officer” who will
investigate the allegations. The U. S. Congress has passed several laws that protect
whistleblowers from retaliation
A number of authors have proposed that the ideals of democracy should be embodied in
business organizations allowing workers to have a right to participate in decisions
that affect them. In a democracy, citizens have the right to participate in government,
where decisions that affect the group are made by a majority of its members after full, free,
and open discussions. Some authors have proposed that these ideals should be embodied in
business organizations. As a first step, they suggest that business decisions should be made
only after open discussion with workers. Next, individual workers should have the right to
make decisions about their own immediate work activities. Such models are not generally
popular in the U.S.
Some management theorists urge managers to adopt a participatory leadership style,
assuming that employees want and can develop the capacity to accept responsibility, are
ready to support organizational goals, and can determine the best means of achieving them.
Following the theory of Douglas McGregor, Raymond Miles distinguishes three models of
sets of assumptions that managers can make about employees:
1. Traditional – employees dislike work, are not capable of being creative or self-
directed, and care only about what they earn.
2. Human relations – employees want to belong and feel recognized, useful, and
important; meeting these needs is more important than what they earn.
3. Human resources – employees like work, want to contribute to meaningful goals that
they help establish, and can be creative and responsible.
Another theorist, Rensis Likert, posits not three but four “systems of organization.” They
are:
1. The “exploitive authoritative” system.
2. The “benevolent authoritative” system.
3. The “consultative” system.
4. The “participative” system.
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If such participative management styles are more effective and productive, then on
utilitarian grounds firms ought to adopt them. However, research on this issue is not yet
conclusive.
Until recently U.S. Labor laws have given prominent position to the principle of employment
at will. This was based on the employer’s property rights to decide who will work and for
how long, the freedom of contract for the employer to hire and fire the employees at will,
and the utilitarian argument that businesses will operate most efficiently if employers have
the right to hire and fire employees as they see fit.
This principle has recently come under attack, and the trend is towards the view that
employees have some right to due process, a fair process by which decisions about their
employment are made.
For many people, the right to due process is the most critical right employees have. This
is a vitally important right, since if it is not respected, the employees have little chance of
seeing any other right respected. In employment, the right to due process plays a central
role in the hearing of grievances. Theorists identify five essential features of an effective
grievance procedure:
1. Three to five steps of appeal
2. A written account of the grievance
3. Alternate routes of appeal beyond the immediate supervisor
4. A time limit for each step
5. Permission for the employee to be accompanied by one or two co-workers
The Right to Work is embodied in the United Nations Article 23.1 entitled “Universal
Declaration of Human Rights”. It states that “Everyone has the right to work, to free
choice of employment, to just and favorable conditions of work and to protection against
unemployment.” This has a different meaning in some states where it means the right to
refuse to join a union without losing one’s job. In the past, workers in some companies had
to join a company union or leave the company. Today, 22 states have laws that prohibit
being forced to join a union. These are called “right to work” laws. The Universal
Declaration of Human Rights has a different meaning.
A right is a fundamental value worthy of being granted the status of a right because it is
something of tremendous importance. It is a means to survival. It is:
1. Our work provides an economic benefit to our society.
2. It helps us develop our potential as a human being.
3. We develop our character.
4. Work is a fundamental source of self esteem and self-respect.
Although it is stated that everyone has a right to work, many people are unemployed. In
early 2010, more than 10% of the U.S. population was unemployed, 15 million men and
women. Aside from the recession, other factors leading to the unemployment were
improvements in technology, thereby requiring fewer workers. Secondly, the transfer of
U.S. jobs to foreign, developing countries because of lower wages and the free trade zones
making it easier to relocate U.S. operations to developing countries such as Mexico and
China. Thirdly, in the late twentieth century, U.S. transitioned from a manufacturing
economy to a service economy.
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Whatever the reasons, lay-offs and plant closings are threats to right to work and impose
high costs on workers and their communities. As plant closings become more common, the
rights of employees in these situations need to be considered. Plant closings impose high
costs on workers, so when plant closings are inevitable, workers’ moral rights should
continue to be respected. Utilitarian principles suggest that the harm caused by layoffs
should be minimized, which means that the costs of plant closings should be borne by those
best able to bear them, namely the company. Considerations of justice further imply that
workers and communities should be repaid by the firms not unjustly abandoning pension,
health, and retirement plans. Companies that have to close plants can minimize the harm
they cause individuals and their communities by giving advance notice, severance pay,
health benefits, early retirement, transfers, retraining, allowing employee purchase, and
phasing out local taxes.
As owners have the right to associate to establish and run their business to achieve their
morally legitimate ends, so workers have the right to freely associate with each other to
establish and run unions to achieve their own morally legitimate ends. The worker’s right to
organize derives from the right to be treated as a free and equal person. Unions, moreover,
have traditionally been justified as an important and legitimate countervailing means of
balancing the power of large corporations. Workers have the right to form unions and to
strike as well. Though unions have been important in the establishing of worker rights in the
U.S. and around the world, unions represent a dwindling percentage of American workers.
Opposition to unions is on the rise, and the use of illegal tactics against them is rising as
well. As the effectiveness of unions shrinks, it is likely that we will need more laws to secure
the rights that unions had previously protected.
While U.S. workers have a right to unions, many U.S. companies are moving their
companies to developing countries because the other nations have weak unions which lead
to weak wage demands and low worker protections. Therefore, the ethical issues for
companies moving to these developing nations is what obligation does a U.S. company have
to respect the right to unionize for workers in its foreign factories where the workers’ rights
are either not recognized or weakly enforced by the local government?
Whatever the cause, displacement of jobs to other nation, changes in domestic demand,
rising productivity, mismanagement or a company’s pursuit of cheaper workers, layoff and
plant closing are threats to the right to work and impose high costs on workers and their
communities.
William Diehl, a former senior vice president in the Steel industry defined eight steps that
companies can do to minimize the effects of plant closings:
1. Provide workers 12 to 18 month of advance notice.
2. Provide severance pay equal to 1 week’s earning for every year of service.
3. Health care should be provided by the company for at least one additional year after
employee’s dismissal.
4. Workers who are within 3 years of normal retirement should be retired on full
pensions.
5. In the case of a multiplant corporation, workers should be given the opportunity of
transfers to an equally paying job at another plant, with moving expenses paid by
the company.
6. Company –sponsored training should be established to train and place workers in
other jobs in the local community. The programs should also include family
counseling for all employees.
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7. Workers and the community should be given the opportunity to purchase the plant
and operate it under an Employee Stock Ownership Plan.
8. The company should phase out their local taxes over a 5-year period. This may
involve a voluntary contribution to the local tax authority if the plant and equipment
are disposed of in a way that will severely reduce property taxes.
Workers have a right to associate with each other and have a right to organize and run a
union. The worker’s right to organize into a union is derived from the right of all people to
be treated as free and equal persons. Corporate employers, especially during period of high
unemployment or in regions where only one or a few firms are located, have much more
power in negotiations with individual employee than the employee does. So workers in
solidarity with other workers can achieve equal footing in negotiating with the corporation.
In addition to organizing, the unions have a right to strike as long as there is no pre-
existing prior agreement not to strike. Companies then have an obligation to respect the
rights of the workers to form unions and to strike. This right extends to the workers of all
nations.
Despite the view that unions are legitimate, there has been a good deal of dissatisfaction
toward them in the United States. There are a number of factors for the decline in union
membership, including an increase in white collar job, a switch from manufacturing to
service jobs and a decline in public confidence in unions. This has been accompanied by a
rise in use of illegal tactics to defeat union organizing campaigns. This has had the effect of
an increase in the appeal to legislatures and the courts to establish rigid legal protections
against the abuses that unions were originally established to secure.
Organizational Politics
The chapter, so far, has focused primarily on formal power relationships and the ethical
constraints that must be placed on this formal power. But there are informal channels of
power in organizations as well, which can be used ethically and unethically.
For the purposes of this chapter, organizational politics is defined as the process by which
individuals or groups within an organization use non-formally sanctioned tactics (political
tactics) to advance their own aims. (Such aims are not necessarily in conflict with the best
interests of the organization.) Because organizational politics aim to advance the interests
of an individual or group, political individuals tend to be covert, which means that they can
easily become deceptive or manipulative. Some of the most frequent political tactics
encountered in business organizations are:
1. Blaming or attacking others.
2. Controlling information.
3. Developing a base of support for one’s ideas.
4. Image building.
5. Ingratiation.
6. Associating with the influential.
7. Forming power coalitions and developing strong allies.
8. Creating obligations.
Such behavior can easily become abusive, manipulative, or deceptive, seriously injuring
others. It can also be used to advance laudable organizational and social goals, however,
and sometimes the only defense a person in an organization has is to fight fire with fire. The
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dilemma is knowing where the line is that separates the moral from the immoral use of
political tactics. Perhaps the best way to approach them is to test them against the four
standards of ethics: the utilitarian question (are the goals of the tactics socially beneficial or
socially harmful?); the rights question (do the tactics treat others consistently with their
moral rights?); the justice question (will the tactics lead to an equitable distribution of
benefits and burdens?); and the caring question (what impact will the tactics have on the
web of relationships within the organization?).
Two kinds of political tactics are viewed to be judged unethical: those that involve pursuit of
personal goals at the expense of organizational productive goals and those that knowingly
involve inefficiency and waste.
Therefore in deciding whether to use political tactics, one should consider the long-range
consequences that the exercise of power implied by these tactics can have on oneself and
one’s relationships with others in the organization.
8.3 The Caring Organization
So far, the chapter has examined organizations as having either hierarchical collections of
individuals who are connected to each other and to the organization by contractual
agreements and formally defined hierarchies of authority. Overlying the rational
organization’s formal lines of authority is the political system, the power relationships
crisscrossing lines of power. There can also be a third different system, one seen as a
network of connected (“selves”) relationships all concerned with each other. The primary
goal of the organization is not profit, but caring for those individuals who make up the
organization and with whom the organization interacts.
The characteristics of a caring model of the organization would be focused entirely:
1. On persons, not on profit not “quality,” or any other kinds of ideas that much of
today’s “car-talk” seems to revolve around.
2. As an end itself, not as a means to profit or quality
3. Essentially personal, in that it ultimately involves particular individuals engrossed in
caring for other particular individuals.
4. As personal and growth-enhancing for the cared-for, in that it moves them toward
the use and development of their full capacities, within the context of their self-
defined needs and aspirations.
Some argue that business organizations in which such relationships flourish exhibit better
economic performance. There are few organizations that perfectly embody the caring
model, though W. L. Gore & Associates comes close. The essential ethical concerns that
arises with this model is the problem of caring too much (which leads to burnout) and the
problem of not caring enough because of fatigue, self-interest, or disinterest.
Extra Resources
1. “Protecting the Worker: Historic OSHA Films (1980s-2000s)” documents strikes, the
history of OSHA, and what it has done for workers;
2. “Behind the Labels: Garment Workers on U.S. Saipan” (2006) looks at sweatshops
and sweatshop foreign workers in Saipan (45 minutes);
3. “Child Slavery” (2007) is a 90 minute BBC documentary with reporter Rageh Omaar
that looks at unpaid child workers around the world
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4. Several documentaries on sweatshops and workers around the world are available on
the website of the Institute for Global Labour and Human Rights including:
“Triangle Returns” (2011) on the 2010 Bangladesh garment factory fire that killed 26
workers
“Where Ships and Workers Go to Die” (2009) on dangers of working in Bangladesh
shipyard
“The Human Cost Behind Bargain Shopping” (2005) on sweatshop workers in
Bangladesh; several other videos are available for streaming on the Institute for
Global Labour and Human Rights website (www.globallabourrights.org) .
Questions for Class Discussion
1. What defines the rational organization? Of what do its layers consist? What
obligations do the employees in this model have towards the firm? What obligations
does the firm have to its employees?
2. What are conflicts of interest? What types of conflicts of interest are there? Under
what circumstances are gifts ethical?
3. Is insider trading moral or immoral? What are the arguments on both sides of the
issue?
4. Why should employers care about their employees’ level of job satisfaction? Why are
modern employees increasingly unsatisfied with their jobs? What can be done to
improve their degree of satisfaction?
5. What is the “political organization”? How is it structured and defined? What are the
main ethical problems that arise in this model?
6. What are the similarities and differences between the power wielded by managers
and the power wielded by governmental officials?
7. Should employees have freedom of conscience? When should they engage in whistle
blowing tactics? Why might external whistle blowing occur in any given organization?
8. What is participatory management? Should U.S. firms adopt more participatory
practices?
9. What is the distinction between the right to due process and employment at will?
10. How should companies conduct themselves when they are forced to close a plant?
Why should they respect the rights of their former workers?
11. Why do employees have the right to unionize and to strike? What explains the lack of
power of modern unions? What are the effects of the dwindling numbers of union
employees in the U.S.?
12. What are the most common types of political tactics? When are they justified?
13. What characterizes the caring organization? Why should companies consider
adopting this model?
Activities and Assignments
1. Have students interview employees from various business organizations, asking
them about their level of job satisfaction and what model of organization their firm
uses.
2. Ask students to research a large, well-known corporation (either individually or in
small groups). The firm may be one for which they would consider working. Direct
them to pay attention to the corporation’s organizational structure and corporate
climate, its goals, its history in dealing with employees and unions, and the types of
positions offered, as well as the duties, requirements, and expectations that go with
them. Would the students want to work for this firm? Why or why not?
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3. Have students investigate the activity of unions in their local area. How many firms
have unionized employees or partially unionized employees? Are the unions
influential or relatively powerless? How do workers themselves feel about unions?
4. Ask students to share their own experiences with the political tactics mentioned in
the chapter. How did they work for the student? Were they ever themselves the
victims of unethical political tactics? What did they do in response?
5. Promote groups of students to the executive level of a selection of major U.S.
corporations that are organized in the traditional, “rational” way. Then, have them
assess the feasibility of reorganizing their particular corporation after the “caring”
model. What changes would they need to make? What benefits, if any, would they
expect? What problems might they encounter in the attempt?
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