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Jeffrey Moriarty*
Employment relationships can be among the most significant relationships in a person’s life. For many people, work requires a major commitment of time and effort, offers a source of purpose, identity, and self-esteem, and provides the material resources needed to live a decent life. But the moral contours of the employment relationship are still not well understood. This chapter advances our understanding of them by considering two general questions. What obligations do employers have toward their employees? What obligations do employees have toward their employers? I approach these questions from a moral rather than a legal perspective. Although I discuss relevant laws, I focus on what employers and employees owe to each other morally. There has been considerably more focus on what duties employers have to employees than the reverse. This is because employers usually have more power than employees, and so are able to impose their will on employees in potentially morally problematic ways. This chapter reflects that focus, while also highlighting certain duties that employees have to employers. There are many more topics in employee ethics and rights than can be discussed here. I focus on ethical issues in five important areas: 1) hiring and firing, 2) compensation, 3) the nature of work, 4) privacy, and 5) whistleblowing. I begin with some reflections about the source of moral obligations in employment.
Freedom of contract: Lochner’s shadow
To the questions “What obligations do employers have toward their employees?” and “What obligations do employees have toward their employers?” one might answer: none, other than ones that they have explicitly taken on. That is, we might understand employer–employee obligations exclusively in terms of agreements or contracts. When you agree to work for an employer—suppose it’s me—you do so under certain conditions (e.g., that you receive $10 per hour, work 40 hours per week, and so on). We might think that my duties to you, and your duties to me, in the context of the employment relationship, are fully accounted for by these conditions. I have a duty to fulfill “my side” of the agreement, and you have a duty to fulfill “your side” of the agreement, and that’s it.
Of course, on this view, we would still have certain other duties to each other. For example, I would still have a duty not to kill you or steal from you, and you would still have a duty not to kill me or steal from me. But these are duties that we owe to each other as private citizens, not as employer and employee. On this view, then, “employee ethics and rights” can be reduced to a study of the agreements that employers and employees enter into.
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Something close to this view was encoded in law in the US during the “Lochner Era,” which lasted from 1905–1937. In 1901, Joseph Lochner, a baker, permitted an employee of his to work 60 hours per week. Although both Lochner and the employee agreed to this arrangement, it violated New York State’s law regarding the maximum length of working days, so Lochner was fined. Lower courts upheld the penalty but, on appeal in 1905, the US Supreme Court held this law to be an unconstitutional abridgment of freedom. Thus began the Lochner Era, in which many similar regulations of working conditions were struck down. It was a time of relatively unfettered freedom of contract in the US. The Lochner Era came to a close in 1937 in West Coast Hotel Co. v. Parrish. Elsie Parrish sued West Coast Hotel for paying her less than the state-mandated minimum wage. In this case, the Supreme Court found for Parrish, not accepting as a justification of her wage that it was freely accepted by both parties. The Court granted that minimum wage rules are abridgments of freedom, but concluded that it was not unconstitutional for states to limit freedom in this way.
As mentioned, this chapter is not primarily about employment law. My goal is not to identify the legal obligations of employers and employees, or to trace the development of employment law over time. But it can be useful to consider employment law because (like other areas of law) it is informed by, and reflects, people’s moral judgments. Thus Lochner is important because it highlights a moral consideration that is present in many discussions of employment ethics: freedom. It is good, other things equal, if employers and employees are able to arrange their relationships in a way that is mutually agreeable. Any such agreement, presumably, reflects the freedom of each party to accept or reject the proposed arrangement. But many think that there is more to employee ethics and rights than whatever is mutually agreed to by the parties involved. This may be because employers and employees have unequal bargaining power, so one side’s agreement (typically, that of employees) is less voluntary—and so has less moral force—than the other side’s (typically, that of employers). Or it may be because freedom, while important, is not all that matters. We might think that employers shouldn’t treat employees, and employees shouldn’t treat employers, in a way that is disrespectful or vicious, even if the party upon whom the disrespectful or vicious treatment is inflicted consented to it. Or it may be because freedom comes in different forms, so that giving employers and employees unfettered freedom to contract may reduce their effective freedom in other ways (as giving people the freedom to sell themselves into slavery would reduce the freedom of those who took this option). These and other considerations come to the fore in our discussion of particular ethical issues in the employment relationship.
Starting and terminating the employment relationship
Ethical issues attend the beginning and end of employment relationships. I begin by highlighting some ethical issues in hiring, then consider issues in firing.
Starting employment: hiring
Suppose a firm needs to hire a worker. It has advertised the position and now has a pool of applicants. Who should it hire? We might think: whomever it wants. We might understand a job as an ongoing exchange of property. When person P takes a job with firm F, F agrees to exchange some of what it owns (viz., money) for some of what P owns (viz., labor). Firm F is not obligated to enter into an exchange at all. So, it might be thought, if F does decide to enter into an exchange, it can do so with whoever it wants.
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Most would reject this view, however. It implies that it is not morally wrong for employers to discriminate in hiring on the basis of characteristics such as race and sex. But most think that this practice is morally wrong (Hellman 2008; Lippert-Rasmussen 2014; cf. Epstein 1992). According to Deborah Hellman (2008), discrimination against groups such as black people and women is wrong because it is demeaning. It treats certain people as if they had lesser worth than others. According to Kasper Lippert-Rasmussen (2014), discrimination of this sort is wrong because of the harm it causes, including stigmatization and the loss of opportunity.
An employer engages in discrimination of a sort when she chooses one from among several applicants based on certain facts about her, such as her experience or education. There is nothing wrong with this. But discrimination is wrong when it is based on certain other facts about applicants, such as their race or sex. It is not always easy to determine where to draw the line between facts that can and cannot be considered, and thus between morally permissible and morally impermissible discrimination. So-called “reaction qualifications” are a difficult case (Lippert-Rasmussen 2014). A firm might want to select an especially attractive person as a sales representative or a receptionist, on the ground that customers prefer to interact with attractive people. This has the effect of excluding ugly people from the applicant pool. It is not clear that excluding applicants from consideration based on their attractiveness is any worse than excluding applicants based on their race or sex.
A preliminary conclusion we might draw is that, while an employer is not required to hire anyone, if she decides to do so then certain facts should not enter into her deliberations (though there may be disagreement about which facts should be excluded). But some have argued that firms must do more than simply not hire people for certain reasons; they have argued that firms should hire the most qualified applicant (Sher 1987). The claim that the most qualified applicant should be hired is sometimes given as a reason why programs of preferential treatment are wrong. In an effort to increase diversity in its ranks, a firm might give preference in hiring to members of traditionally underrepresented groups. The effect of such programs may be to give jobs to less qualified over more qualified applicants, where qualifications are measured in terms of experience, education, training, and the like. But it is not clear that there is an independent obligation to hire the best applicant. We might think that, if those who have a right to control the firm (e.g., shareholders) want to hire the best qualified applicants, and they direct their agents (e.g., managers) to satisfy this want, then their agents have an obligation to do so. This may explain why government agencies should hire the most qualified applicants: the public wants them to do so. But we might not think that the government or any other employer has this obligation independently of the will of those who have the ultimate right to determine hiring policy within the organization. Moreover, what makes an applicant “best” for a particular position will be difficult to specify in many cases, and so difficult to codify in law or regulation. At most, this will be a moral obligation for individual employers.
Terminating employment: firing and quitting
Business ethicists have written extensively about the conditions under which employees may be terminated by employers. In the US, the current law in almost all jurisdictions is “employment-at-will” (EAW). Employment-at-will was originally the view that an employer (or employee) may terminate the employment relationship for “good reason, bad reason, or no reason at all.” An employer might decide to terminate a worker’s employment because the worker is incompetent, or because the worker won’t commit a crime for the employer, or just because the employer feels like it. Over time, however, various exceptions to EAW have been carved out, both by courts and legislatures (Twomey 2013). Employers cannot now fire workers because they refuse to commit crimes, among other “bad” reasons.
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The main alternative to EAW is “just cause” dismissal rules. On this alternative, employers must have a good reason to terminate employees. Usually these are reasons related to employees’ job performance. (Employers may let employees go if the business has financial difficulties, but these are best described as layoffs, not terminations.) So an employer could fire an employee for incompetence or excessive absenteeism, but not because he belongs to a political party the employer does not like.
In sum, in an EAW scheme, as it now works, employers are allowed to fire workers for any reason except for certain ones. By contrast, in a just cause scheme, employers are allowed to fire workers only for certain reasons. In theory, the set of reasons that remain as legitimate reasons to terminate an employee after an EAW scheme eliminates the illegitimate ones could be the same as the set of reasons designated as legitimate by a just cause scheme. In practice, however, these schemes are quite different. This is because most EAW systems leave it open for employers to terminate workers’ employment for non-job-related reasons. In some jurisdictions, it would be permissible for an employer to terminate a worker’s employment upon discovering that is he a homosexual, or because he engages in risky activities outside of work (e.g., smoking), or because he is found using a competitor’s products. No proponent of just cause dismissal rules would countenance these among the legitimate reasons for a worker to be terminated.
Which is ethically superior: EAW or just cause? Those who favor EAW often emphasize the value of freedom. To demand that employers terminate employment relationships only for certain reasons, they say, is an unwarranted diminution of employers’ freedom (Epstein 1992). Defenders of just cause have replied that employers’ exercising—or even simply having—a robust freedom to fire workers is an unwarranted diminution of workers’ freedom. To be free is to be able to live your life as you choose. If your employer can deprive you of your livelihood for arbitrary reasons, they say, then you are to that extent unfree (Hsieh 2005; Werhane et al. 2004). Another important consideration is social welfare. Many writers believe that Europe’s persistently high unemployment rate relative to the US is explained by the fact that most of Europe uses just cause dismissal rules while the US uses EAW (Maitland 1989). The harder it is for employers to fire employees, the more reluctant they will be to hire them. Just cause may protect workers’ jobs at the cost of creating a sclerotic labor market overall. Indeed, even if individual workers prefer strong job protections (and hence just cause), workers as a whole may prefer a healthier labor market (and hence EAW).
We have been considering the question of when an employment relationship may be terminated from the perspective of the employer. But we can also ask this question from the perspective of the employee. That is, we can ask: under what conditions can an employee terminate her relationship with her employer? Can the employee quit for “good reason, bad reason, or no reason at all”? Or must she have a good reason? Business ethicists have paid scant attention to this question (cf. Werhane et al. 2004). But many of the arguments that are deployed in the EAW vs. just cause debate can be deployed here as well. We might say that it is important for employees’ freedom to be able to quit when they want to, even if it’s not for an objectively good reason. But if employees’ freedom is constrained by being terminated by their employers, especially for arbitrary reasons, then employers’ freedom is likewise constrained by their employees quitting, especially for arbitrary reasons. Arguments about social welfare are relevant here too. If employees believe that they will be locked into jobs unless they have good reasons to leave, then they will be less likely to take them. Here again, even if individual employers would prefer to be able to keep talented workers, employers as a whole may prefer that employees have the freedom to leave.
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I suspect that many business ethicists would say that there is a difference between employers’ and employees’ obligations with respect to terminating the employment relationship. This is because, they would further say, losing a job is typically more damaging to the employee than an employer’s losing an employee is to the employer. In the US, approximately 80 percent of employees work in firms that employ 20 or more people (50 percent work in firms that employ 500 or more and 33 percent work in firms that employ 5,000 or more).1 On average, it seems easier for a firm of this size to manage in the worker’s absence, and find a replacement for the worker, than it is for the worker to find a new job. But we should not conclude that an employee’s terminating an employment relationship is always a trivial matter. Some employees may be as important to their firms as those firms are to most employees. This may be the case in the 20 percent of US firms that employ 20 or fewer workers, and especially in the 11 percent of firms that employ 9 or fewer workers. If arguments for just cause are sound, they require at least that, when employees terminate employment relationships, they do so thoughtfully. Their pursuit of new opportunities for themselves should be tempered by a concern for the damage they do to their current employers and co-workers.
Pay has been studied extensively by social scientists, including economists and strategists. They are typically concerned with the causes and effects of compensation schemes. That is, they ask: why do certain firms adopt certain pay schemes, and what are the effects of their doing so, especially on worker productivity? The compensation of CEOs has been a particular area of interest. This is because CEO pay is thought to be more than merely pay. It is thought to be a vital tool of corporate governance and, in particular, a way of aligning the CEO’s and the firm’s interests (Bebchuk and Fried 2004; Kolb 2012). Normative theorists have paid much less attention to compensation. When they have studied it, they have focused on compensation at the “extremes,” i.e., CEO compensation and the pay of workers in overseas sweatshops. But it matters to employees generally how much they are paid. And employees think about their pay in moral terms: as fair or unfair, just or unjust (Greenberg and Colquitt 2005). This is an area of inquiry that deserves greater attention.
In the existing discussion of ethical issues in compensation, two views are prominent (Moriarty 2014a). The first can be called the “agreement view.” According to this view, the just wage is whatever wage the employer and employee agree to without force or fraud. This view is often justified by appeal to property rights and freedom. Thus John Boatright says that “each person has a right to whatever he or she gains by exchanging his or her property through voluntary transactions” (Boatright 2010: 172; see also Machan and Chesher 2002). The idea is this: I own my money, and you own your labor. I should be free to offer you whatever amount of my money I want for your labor, and you should be free to accept or reject that offer, as you choose. And vice-versa.
The agreement view fits nicely with the “Lochnerian view” of employment ethics: ethics in pay is solely a matter of what is agreed to, assuming the parties are not forced to agree and know what they are agreeing to. But this view will strike many as overly permissive. Suppose that an employer offers a certain amount of money to a man, and a different, smaller, amount of money to an equally qualified woman for doing the same work equally well. Suppose that both the man and the woman voluntarily accept their offers. The result is discrimination in compensation, which many would say is morally wrong (Hellman 2008; Lippert-Rasmussen 2014). But the agreement view finds nothing wrong with this result.
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A second prominent view of ethics in compensation can be called the “contribution view.” On this view, employees should be paid in accordance with their contributions. This view comes in two versions. On the absolute version, an employee should receive from his employer an amount of money that equals the value of his contribution, perhaps as estimated by his marginal revenue product. If an employee’s contribution is worth $60,000, then he should be paid $60,000 (Miller 1999). On the comparative version of this view, employees should be paid in proportion to their contributions, given what others contribute and are paid (Sternberg 2000). So if an employee contributes $60,000 and is paid $40,000, then an employee who contributes $120,000 should be paid $80,000. The contribution view will seem attractive to those who see pay as a reward for work. We might think that, just as the severity of punishments should be proportionate to the seriousness of crimes, so the value of employees’ pay should be proportionate to the value of their work.
But if the agreement view seems overly permissive, the contribution view may seem overly restrictive. Suppose that a firm decides to pay the workers at the bottom of the organizational hierarchy more than the value of their contributions and those at the top of the organizational hierarchy less than the value of their contributions. It might do this because it wants to create a more cooperative work environment, or because its owners are committed to egalitarian ideals. Suppose, moreover, that everyone in the firm accepts this arrangement; indeed, they claim to prefer it to alternative arrangements. In this case, we might doubt that there is anything wrong about the firm’s paying its employees in this way.
It might be said that the above case—in which the wages that are agreed to by employers and employees do not match employees’ contributions—won’t occur in the real world (Boatright 2010). For it might be thought that, in a competitive market, employers will have to pay workers according to their contributions. If an employer pays a worker less than he contributes, then the worker will be poached by another firm who will make him a better offer. And if an employer pays a worker more than he contributes, then the employer bears an unnecessary cost that puts him at a competitive disadvantage in the market. Either way, market forces will pressure employers and employees to enter into agreements in which employees’ pay matches their contributions. If so, then perhaps we do not have to choose between the agreement and contribution views.
This is mistaken. First, the claim that workers will be paid according to their contributions— and hence that employers’ wage offers will match employees’ contributions—only holds true given a certain simplified view of the labor market, and even then, only in a perfectly competitive market at equilibrium. But actual markets are imperfect. In particular, significant informational deficits attend attempts to discover the value of employees’ contributions, especially since their pay is often kept secret (Danziger and Katz 1997). Second, there is empirical evidence that workers do not get paid according to their contributions (Frank 1984). Workers with similar qualifications, performing similar tasks, at similar firms, get paid differently. To take a familiar example, Costco pays its workers a lot more than Wal-Mart’s Sam’s Club pays its workers, despite the fact that they perform similar jobs (Cascio 2006; cf. McArdle 2013). Third, employers often have good business reasons for using compensation schemes that have the effect of paying workers more or less than their contributions. “Egalitarian” schemes may work best in firms in which teamwork is important (Bloom 1999); “inegalitarian” or “tournament” schemes may work best in firms in which individual effort matters more (Gerhart and Rynes 2003). (The mere fact that different firms use different compensation systems suggests that they have some choice about what to pay their employees. They are not bound to pay them in accordance with their contributions.) To be clear, a firm cannot get away with paying its workers vastly more or vastly less than their contributions, at least for long. But the evidence suggests that firms have some flexibility when it comes to compensation. As for what, in the final analysis, firms should pay employees: there may be compensation systems that are morally problematic, but there may be no morally best one. Or rather, the system that is morally best may differ from firm to firm, and depend on the kind of firm it is.
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The nature of work: meaningful work and workplace democracy
It matters how the labor process is organized, and who organizes it. Some argue that workers should have, or at least should have access to, meaningful work (Rawls 1971; Schwartz 1982). And some argue that workers should have a democratic say over how the labor process is organized (Brenkert 1992; McCall 2001). These outcomes need not occur together. Workers may decide through a democratic process to divide the labor process into meaningless tasks. And an autocratic manager may divide the labor process into meaningful tasks. But these topics are often treated together, as arguments for and against meaningful work and workplace democracy draw on similar considerations (Hsieh 2008).
Meaningful work
What is meaningful work? According to Richard Arneson, it is “work that is interesting, that calls for intelligence and initiative, and that is attached to a job that gives the worker considerable freedom to decide how the work is to be done” (1987: 522). For Adina Schwartz, meaningful work is work that allows the worker to act autonomously, work that “abolishes the distinction between those who decide and those who execute others’ decisions” (1982: 641). As these definitions make clear, when it is argued that workers should have meaningful work, the claim is not that they should have “important” work, or work that advances a worthy cause. Bolting wheels onto cars is important, because cars are important, but it is not meaningful in the sense under consideration. Nor must meaningful work feel meaningful or fulfilling to the worker to qualify as meaningful (cf. Michaelson et al. 2014). Rather, the work must challenge the worker, in particular, by calling upon him both to design and to execute significant tasks.
What reason is there for workers to have meaningful work, understood in this way? One might observe that workers often want meaningful work; they often prefer it to meaningless work (Arneson 1987). Other things equal, there is reason for people to have what they want. So there is reason for workers to have meaningful work. This analysis understands meaningful work as a job amenity like paid vacation or free coffee. Seen this way, it is not clear why business ethicists—or businesses themselves—should be more concerned about the provision of meaningful work than any other job amenity.
Some reply that meaningful work is different because it is unlikely to be provided in the quantities that workers want in a competitive market (Werhane 1985). A possible explanation for this claim goes back to Adam Smith. A labor process (e.g., pin making) will be more efficient if each worker performs just one or two steps of it repeatedly than if each worker performs all of the steps. In a competitive market, there is pressure to make labor processes as efficient as possible. So there is pressure to assign workers just one or two tasks, i.e., to make work meaningless.
This is true, but it is a mistake to suppose that it will lead inexorably to the elimination of meaningful work. Just as there is a market for consumer goods, there is a market for labor. Firms have an incentive to respond to workers’ preferences regarding the nature of their work just as they have an incentive to respond to consumers’ preferences regarding the nature of the goods they buy (Maitland 1989). If workers really want meaningful work, then they will trade higher wages, or some other desirable feature of their work, for more meaning (Nozick 1974). To take an example from university life: professors of accounting could easily double their salaries by becoming auditors in private industry. But they trade money for what they regard as more interesting work as researchers and teachers. We have no more reason to think that competition will make meaningfulness disappear than we have to think that competition will make paid vacation, free coffee, or any other job amenity disappear.
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Others see meaningful work not as an optional amenity but as a moral requirement. One argument for this conclusion appeals to autonomy (Bowie and Werhane 2005; Schwartz 1982). Meaningful work requires workers to exercise their autonomy in that it requires them to both design and execute tasks, as opposed to mindlessly following plans laid out for them by others. We might think, following Kant, that autonomy should be respected, and that this requires employers to offer employees meaningful work and employees to accept those offers (Moriarty 2009). In response, we might wonder whether employees can autonomously choose work that does not itself require autonomous choice. It is not clear that it is always disrespectful—to others or oneself—to engage in “mindless” activity. A second argument for thinking of meaningful work as a moral requirement begins with the idea that work has “formative power” (Arnold 2012). People’s characters, in particular, can be damaged by their work. Smith puts this colorfully:
The man whose whole life is spent in performing a few simple operations . . . has no occasion to exert his understanding . . . and generally becomes as stupid and ignorant as it is possible for a human creature to become . . . His dexterity at his own particular trade seems . . . to be acquired at the expense of his intellectual, social, and martial virtues.
(1976/1776, V.1.178)
We might conclude that labor processes should be divided into meaningful tasks to prevent this damage. A burden that this argument must meet is showing why character development should be a concern of anyone besides the person whose character it is (at least once this person reaches maturity).
If workers should have meaningful work, a further question is: who should provide it? In an economy dominated by private firms, the locus of meaningful work—where it happens, so to speak—must be those firms. But this leaves open whether the costs of providing meaningful work, if indeed there are costs, should be borne entirely by private firms, or whether the state should bear some of them, perhaps in the form of subsidies for firms to arrange their labor processes into meaningful segments.
Workplace democracy
As noted, a worker having work that is meaningful does not guarantee that his workplace is managed democratically, or vice-versa. But the topics of meaningful work and workplace democracy are often treated together. Both can be seen as ways of giving workers more control over their life at work, and arguments for both appeal to similar ideals.
A hallmark of workplace democracy is control of the firm by workers.2 But this control can take different forms. Some argue that firms should be controlled exclusively by their workers (Archer 1996; Dahl 1985). Others argue that workers should share control with shareholders (Brenkert 1992; McCall 2001; McMahon 2013). A fully articulated account of workplace democracy must, in addition to defending one of these alternatives, specify the types of decisions within the firm over which workers should have control. We might think that workers should have control over shop floor issues such as work schedules, but not seats on the board.
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Workplace democracy is often defended, as is meaningful work, in terms of autonomy or freedom. According to George Brenkert, employees “have a right to freedom, just like other individuals or genuine agents” (1992: 262) In social institutions such as firms, he says, “such a right requires participation, or at least, representation” in bodies that make decisions about what the firm does and how it does it (1992: 262). Similarly, Robin Archer argues that the “basic regulatory principle” of freedom is that “my actions should be governed . . . by my choices” (1996: 17). Unless workers control the firm, Archer says, their actions are determined for them by others. So workplace democracy is necessary to preserve worker freedom (see also Hsieh 2005).
Workplace democracy is also defended by appealing to workers’ interests. Thus John McCall says that employees’ important interests can be significantly affected by their firms’ decisions, and giving employees control over those decisions gives them “greater guarantees that their interests will be considered fairly” (2001: 206). Similarly, Brenkert says that employees require protection from abuses of power by firms, “for employees’ lives and futures, in short, their basic interests . . . are directly at stake” (1992: 260).3 According to McCall and Brenkert, control provides this protection.
Most workers, however, do not labor in organizations that they democratically manage. In most cases, capital hires labor. As a result, providers of capital, or their agents, have ultimate control over the firm. When we reflect on why that is, we see that considerations of freedom and welfare can be used to defend this arrangement too.
The first thing to observe is that there is no legal prohibition on workplace democracy. Labor can hire—and in some cases has hired—capital (Hansmann 1996). So we might conclude that the status quo reflects the free choices of the various stakeholders in the firm (Bainbridge 2008; Macey 1999). In defense of this, note that most stakeholders, including workers, are promised a specific benefit for their contribution. But shareholders are the “residual claimants”: they get what is left over. We might see control as the demand that shareholders make to become residual claimants—a position that maximizes the probability that there will be a residual to claim. And we might see stakeholders as agreeing to this demand to attract shareholders’ capital to the firm at a reasonable rate. If this story is right, then considerations of freedom tell against greater workplace democracy (cf. Boatright 1994).
Another argument for the status quo appeals to welfare. According to this argument, firms that are controlled by shareholders are more efficient than firms that are controlled by workers. Jensen says that “200 years’ worth of work in economics and finance indicate that social welfare is maximized when all firms in an economy maximize total firm value” (2002: 239; see also Boatright 1994). If this is right, it challenges the justification of workplace democracy that appeals to workers’ interests. Other things equal, workers may prefer to work in worker-controlled firms. But other things may not be equal: the price of worker control may be a significant decline in firm efficiency and social welfare. If so, workers may prefer an economic system in which they have more welfare to a system in which they have more control over firms. A key lesson of this section is that the debate about meaningful work and workplace democracy depends on empirical questions: on the formative effects of work, the relative efficiency of worker-managed enterprises, and so on.
Most people want to keep certain information, including information about who they are and what they do, private from certain other people. In particular, most employees want to keep certain information private from their employers. But employers may have an interest in knowing some of that information. Employees may want to keep their employers from finding out that, while at work, they send personal emails or check their Facebook pages. Employees may also want to keep their employers from finding out that they engage in certain activities outside of work, such as using illegal drugs or having sex with partners of the same sex, or other general facts about them, such as that they are thinking about having children or are at high risk for certain diseases. Employers may have an interest in knowing all of this information. This gives rise to two questions: What information do employers have a right to know? And what methods can they use to discover it?
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Informational privacy can be understood in terms of control and access. Roughly, person P has informational privacy with respect to information N just in case P has control over who has access to N (Tavani and Moor 2001).
Almost everyone agrees that individuals should have privacy with respect to some information. Elaborate precautions are taken to protect people’s medical and educational records, for example. To determine what other information deserves protection, we need to think in general about why informational privacy is important. One popular justification appeals to intimacy (Cohen 2002). Part of what it is to be close to another person is to have that person, and not others, know certain facts about you (e.g., that you are an atheist). This requires your having control over who has access to those facts. Another, more important, justification for informational privacy appeals to autonomy. Privacy promotes autonomy in two ways. First, the autonomous person acts according to her own plans. If you cannot control who has access to information about you, you may be tempted to “edit” your plans according to society’s expectations (Spinello 2010). You may decide not to indulge your atypical political or sexual proclivities, for example, out of fear of others’ judgment. Second, the autonomous person presents herself in public according to her own conception of who she is. An inability to conceal certain aspects of your life (e.g., your desire to have a family) may hamper your ability to present yourself in certain ways (e.g., as an ambitious and committed corporate executive) (Shoemaker 2010).
Yet surely employers have a right to know some information about employees. For example, employers are entitled to know whether prospective employees have the skills and experience necessary to perform the jobs for which they are being hired, even if employers knowing that information compromises prospective employees’ intimacy and autonomy to some degree. More precisely, employers are entitled to ask prospective employees questions about their skills and experience, and make employment conditional upon their answering truthfully.4 We need a way, then, of distinguishing information that employers are entitled to know from information that they are not entitled to know. A natural suggestion is “job relevance” (DesJardins and Duska 1987). So it might be claimed that employers are entitled to know information that is relevant to employees’ jobs, but not information that is not relevant. A problem with this suggestion is that it is not always clear what information is job relevant. Whether a person is politically liberal or a conservative is, in most cases, not job relevant. But what if the prospective employee is thinking of having children? What if he is a smoker? These traits do not directly affect job performance, but they are associated with higher employment costs that an employer may not wish to bear.
The question of what behaviors are and are not job relevant was at the center of a lively debate about the ethics of drug testing in the 1980s and 1990s (Brenkert 1981; Cranford 1998; DesJardins and Duska 1987). Whether an employee is performing his job poorly is clearly job relevant information, and heavy drug use may lead to poor job performance. So, some argued, employers have a right to know whether their employees are using drugs (Cranford 1998). But others argued that, while the fact that an employee is performing poorly is job relevant information, the reason why he is performing poorly is not. According to these writers, an employer is no more justified in testing an employee for drug use than she would be in “testing” the health of the employee’s marriage, on the ground that this too may cause poor job performance. While accepting this as a general rule, we might make exceptions for employees who perform jobs that pose a serious risk of harm to others, such as flying an airplane, driving a bus, or performing surgery (DesJardins and Duska 1987).
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Ethical questions about privacy are not exhausted by a determination of what employers have a right to know. There are also questions about how they can come to know it. Thus, even if employers have a right to know whether their employees are using drugs, they would not be justified in having their employees followed 24 hours a day to see what substances they put into their bodies. To use a different example: an employer has a right to know whether her employees are stealing from her. But she would not be justified in installing cameras in all areas of the workplace, including in its bathrooms, to determine whether employees are stealing from her. And she would not be justified in performing strip searches on employees. In a difficult labor market, an employer might be able to get employees to agree to intrusions of these kinds, but this would not eliminate their moral wrongness.
Questions about privacy are likely to grow in importance in the coming years, as new technology allows employers to collect increasing amounts and kinds of information on employees, and to do so in subtle and unexpected ways. Business ethicists have paid some attention to these issues (DeGeorge 2002), but there is a great deal more work to do.
There are many different definitions of “whistleblowing” in existence (Brenkert 2010; Davis 2003; DeGeorge 2009). Based on these definitions, a whistleblower is typically 1) an employee or other person with access to non-public information about an organization, 2) who reports information about activity in that organization that he perceives to be unethical or illegal, 3) outside of the normal reporting channels within that organization, and 4) in particular, to a person or entity that he perceives to have the power to do something to stop the activity. Jeffrey Wigand is thought to have engaged in whistleblowing when he gave an interview to 60 Minutes in 1996 about the ingredients in Brown & Williamson’s cigarettes. As a former high-ranking executive at Brown & Williamson, Wigand 1) had access to non-public information about the ingredients in its cigarettes. He further 2) thought that these ingredients were unusually dangerous. Wigand 3) reported this information to 60 Minutes, because 4) he thought the public attention would cause Brown & Williamson to stop.
Two questions traditionally asked about the ethics of whistleblowing are: When is whistleblowing permitted? And when is it required?
Perhaps the most popular justification of whistleblowing is due to Richard DeGeorge (2009). On his account, an employee is permitted to blow the whistle on his organization when it is about to do something that will harm the public, and the employee has tried without success through normal reporting channels to get the organization not to do it. The employee is obligated to blow the whistle when he has good reason to believe that his blowing the whistle will be successful in preventing the harm (because, among other things, he has good evidence that the organization is about to do something harmful). The extra condition for obligation compared with permission is motivated in part by the fact that whistleblowing, due to humans’ tribal nature, is typically costly for the whistleblower (Brenkert 2010; DeGeorge 2009). After blowing the whistle, Wigand never worked in corporate America again; he and his wife divorced; he claimed to have been harassed and threatened. DeGeorge’s account sensibly implies that one does not have to blow the whistle when it is unlikely to do any good.
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A different justification of whistleblowing, due to Michael Davis (2003), appeals to complicity in wrongdoing. He says that an employee is required to blow the whistle on her organization’s activities when she (truly and reasonably) believes that it is “engaged in a serious moral wrong” and “[her] work for that organization will contribute . . . to the wrong if . . . [she] [does] not publicly reveal what [she knows]” (2003: 550). While DeGeorge’s justification of whistleblowing focuses on the harm that the whistleblower can prevent, Davis’s focuses on the harm that the whistleblower herself would otherwise do. As a result, Davis’s account is curiously narrow. On it, Wigand did not engage in whistleblowing. For he was not responsible for the (alleged) decision to put unusually dangerous chemicals in Brown & Williamson’s cigarettes. At the time Wigand blew the whistle he did not even work for the firm. Whatever the merits of Davis’s account, then, it cannot be used to justify the actions of a large number of individuals normally classified as whistleblowers.
Recently, Brenkert (2010) had advanced a justification of whistleblowing that incorporates elements of the above two accounts. According to his “Principle of Positional Responsibility” (PPR), people are morally obliged to
report wrongdoings to those who might prevent or rectify them, when the wrongdoings are of a significant nature . . ., when one has special knowledge due to one’s circumstances that others lack, when one has a privileged relationship with the organization . . ., and when others are not attempting to correct the wrongdoing.
(2010: 582)
Brenkert offers the PPR as a pro tanto and not an absolute rule. Other things equal, one ought to report corporate wrongdoing in the conditions he identifies, but if, for example, “the chance of success is limited” or if the whistleblower “will be dramatically injured as a result,” then one need not (2010: 588). Interestingly, Brenkert seems to think that how much weight the PPR should have in an individual’s deliberations depends on the extent to which he is personally committed to the PPR. “The decision one makes on implementing the Principle of Positional Responsibility,” Brenkert says, “will be a decision regarding one’s integrity as one decides what one justifiably stands for” (2010: 589). So, if Wigand had decided that he “stood for” making a lot of money as an executive in a major American tobacco corporation, then would it have been permissible for him not to blow the whistle? Or is standing for making a lot of money not “justifiable”? Brenkert does not provide answers to these questions.
The importance of the topic of whistleblowing is reinforced at least every decade, as serious corporate and government wrongdoing comes to light through the actions of whistleblowers (e.g., Roger Boisjoly at Morton Thiokol in the 1980s, Jeffrey Wigand at Brown & Williamson in the 1990s, Sherron Watkins at Enron in the 2000s, Edward Snowden at the National Security Agency in the 2010s). Business ethicists have articulated thoughtful accounts of when whistleblowing might be justified, in the sense of being permissible or required. In my view, however, not enough attention has been paid to the prior question of whether whistleblowing needs a justification at all. The reason typically given for why whistleblowing requires justification, and hence is wrong, all else being equal, is that it is an act of disloyalty (Boatright 2009). By definition, the whistleblower is a person—often an employee or other individual with close ties to the organization—who shares inside information about wrongdoing in the organization with outsiders. She “rats the organization out.” But why should people be loyal to their organizations (Duska 2000)? It’s not hard to see, of course, why organizations would encourage employees to think that they should be loyal. Loyal employees are in many ways better employees than non-loyal ones (Meyer and Allen 1997). However, it is not clear that employees should believe their organizations. Suppose you are operating a meth lab in your house and I report this information to the police. It’s not clear that there is any sense in which my reporting this information to the police is wrong, even if I am helping you to operate the lab. But this is precisely what those who offer justifications of whistleblowing assume. At the very least, it seems, what is needed is an account of the conditions under which employees have a duty of loyalty to organizations. This may give us a clearer sense of when whistleblowing, as a putative act of disloyalty, is justified.
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Concluding remarks
This chapter considered recent research on employee ethics and rights. In particular, it considered ethical issues in: 1) hiring and firing, 2) compensation, 3) the nature of work, 4) privacy, and 5) whistleblowing. While these are not the only ethical issues that attend the employment relationship, they are among the most important.
A recurring theme in this chapter is that freedom matters. But freedom is a complicated concept: it is not always clear what freedom requires in employment. Moreover, freedom is not all that matters: in some cases, other values should prevail. “Lochnerians” may think that it is best if there are few if any restrictions on the content of employment agreements. On their view, employers should propose whatever terms they want to employees, and employees should propose whatever terms they want to employers, and the results are morally acceptable just in case they are voluntarily agreed to by both sides. But our consideration of specific issues within employment ethics reveals that, according to many writers, this view is too spare. First, a robust freedom to contract may be secured at the expense of other values, such as merit. For example, if wages are settled through bargaining only, workers may not be paid in accordance with their contributions. Second, contractual freedom may come at the expense of other kinds of freedom. If workers have the freedom to select meaningless work, they may damage their capacities for autonomous choice.
For the past few decades most researchers in business ethics have looked “outward,” investigating issues at the intersection of business and society. They have considered, for example, what the responsibilities of businesses are to address major social ills such as poverty and climate change. These are important issues to be sure. But equally important, albeit less glamorous, are the ethical issues that arise “inside” the organization, between employers and employees. The responsibilities that employers have toward their employees, and that employees have toward their employers, deserve greater attention.
Essential readings
Ian Maitland presents a case for a robust freedom of contract in his classic article, “Rights in the Workplace: A Nozickian Argument” (1989). Jeffrey Moriarty critically discusses work on compensation ethics in “Compensation Ethics and Organizational Commitment” (2014a). For an excellent survey of recent research on meaningful work and workplace democracy, see Nien-hê Hsieh, “Survey Article: Justice in Production” (2008). George Brenkert summarizes the state of the debate about whistleblowing, and advances it significantly, in “Whistle-Blowing, Moral Integrity, and Organizational Ethics” (2010). Richard DeGeorge considers informational privacy and other issues complicated by emerging technologies in Ethics and Information Technology (2002). For a general survey of issues in employment and employee ethics, see Patricia Werhane and Tara Radin (with Norman Bowie), Employment and Employee Rights (2004).
For further reading in this volume on contract and business see Chapter 13, What is business? On the rights of owners, see Chapter 18, Property and business. On the obligations of firms to employees, see Chapter 29, Exploitation and labor. On moral awareness and the responsibility of the manager, see Chapter 27, The ethics of managers and employees.
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Notes
* For detailed and perceptive comments on this chapter, I thank Eugene Heath and Alexei Marcoux.
1 These data are drawn from the US census bureau, accessible here: www.census.gov/econ/smallbus.html.
2 Early versions of stakeholder theory called for workplace democracy of a different kind. They called for control of the firm by boards composed of representatives of all of the major stakeholder groups, including workers and shareholders, but also members of the community, suppliers, and consumers. For a discussion and evaluation of this feature of stakeholder theory, see Moriarty (2014b).
3 A third type of argument for workplace democracy is the so-called “parallel case” argument (Dahl 1985). According to this argument, states should be governed democratically by those who are subject to their rules, viz., states’ citizens. Since firms are like states, firms should be governed democratically by those who are subject to their rules, viz., firms’ workers. This argument does not attempt to supply a normative ground for democratic rule in either the state or firm. Indeed, insofar as the basis is autonomy or interest-protection, the parallel case argument can be reduced to one of the two arguments discussed in the text.
4 It might be said that, even if an employer has a right to know certain information about you—in the sense that the employer has a right to ask you certain questions and make your (continued) employment conditional upon answering them truthfully—your informational privacy with respect to that information is uncompromised. You can always refuse to answer. But this is questionable. If an employer can impose a loss on you for refusing to answer certain questions, then your control over your employer’s access to that information is compromised to an extent. Similarly, if a mugger says to you, “your money or your life,” and you hand over your money in response, then even though your decision to do so is in some sense yours, the mugger exercised a great deal of control over it by threatening to impose a loss on you if you didn’t. Much depends, of course, on how much of a loss the employer is able to impose on you for failing to answer her questions. Being denied a certain job, or continued employment in that job, may be a significant loss in some circumstances, but an insignificant one in others.
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