Sample Case 1
Ethics and Social Responsibility Case
A New Concern for Human Resource Managers: Whistle-Blowing
Each year Time dedicates a front cover of its magazine to a “Person of the Year.” Last
year, for example, New York City Mayor Rudolph Giuilani was given such an honor for
his handling of New York’s 9/11 terrorist crisis. This year Time expanded its version of
the person of the year. It dedicated its cover to “Persons of the Year.” The magazine
identified three women working in unrelated fields who had at least one common
characteristic—they were all “Whistle-Blowers.”
The term whistle-blower is defined by the third edition of The American Heritage
College Dictionary as ...view middle of the document...
Cooper, a WorldCom vice
president, informed the board of WorldCom about inflated profit of nearly $4 billion
through its accounting practices; and finally Watkins, an Enron vice president, informed
Enron Chairman Kenneth Lay about improper accounting methods used by the company.
Like all whistle blowers, these three women placed themselves in very precarious
positions with regard to physical and emotional health, privacy, and especially
employment, since these women were the main financial supporters of their
households—two of them had “stay at home” husbands.
Rowley who had spent nearly 23 years at the FBI and was some two years away from
retirement was subjected to verbal backlashes and criticism from co-workers. Some of
her colleagues compared her to recently convicted FBI agent and spy Robert Hanson.
Fallout from Watkins’s letter to Enron’s Chairman Lay eventually led her to resign from
her $165,000 job last November. As a result of Cooper’s revelation, nearly 20,000
WorldCom employees lost their jobs and shareholders lost some $3 billion.
Whistle-blowing has resulted in terrible and even fatal endings. Two examples: in 1976,
Karen Silkwood, a chemical technician at Keer-McGee plutonium fuels production plant
in Crestcent, Oklahoma, paid with her life. She died mysteriously in a one-car automobile
crash after bringing to light problems about falsifying quality control reports on nuclear
fuel rods. More recently, in 1995, Dr. Jeffery Wigand, vice president of research and
development at Brown & Williams Tobacco Corporation, revealed what most people
thought they already knew—there is a causal relationship between tobacco and cancer
and tobacco is addictive; his company fired him summarily. However, he was been
publicly vindicated when his story was aired on CBS’s 60 Minutes on February 4, 1996.
For Silkwood, Wigand, and others who willingly tell on the bosses it “still means career
suicide—with no applause.” As recently as August 2002, a survey conducted by the
National Whistle-Blowing Center in Washington, DC found that 200 employees were
fired after reporting misconduct; others who remained in their companies faced internal
demotions; while others whistle-blowers were blackballed in their industry, unable to find
any work in that sector. Experts have offered four simple questions for anyone thinking
about whistle-blowing. First, the whistle-blower should ask the question: “Is this the
only way?” Second, “do I have the goods?” Third, “why am I doing this?” And finally,
“am I ready (for the consequences)?”
Just recently the federal government has gone to some lengths to protect whistle-blowers
with the enactment of the Sarbanes-Oxley Act 2002. This act provides whistle-blowers
with legal protection:
An executive who retaliates against a whistle-blower can be criminally
liable and imprisoned for up to 10 years. The Labor Department can order
a company to rehire an employee without going to court. And...