1
Year of the Whistleblower

• Corporate financial misconduct has helped create
  a do the right thing culture
• Historically, whistleblowing has often involved
  significant personal cost
• Half of respondents to 2002 survey said they were
  fired after reporting misconduct, those not fired
  often faced other retaliation many blackballed
  in industry
• Sarbanes-Oxley (2002) provides protection for
  whistleblowers (disclosure that could have
  material impact on share price)
• Retaliation is criminal offense
• DoL can seek reinstatement of fired Ee
• Revolution in corporate free speech

2
Year of the Whistleblower

• Companies must rethink how they deal with
  whistleblowers
• Rewrite nondisclosure pacts to differentiate
  whistleblowing from leaking
• Reconsider rules requiring Ees to receive
  permission to speak to media or lawmakers
• Corporate lawyers have special responsibilities
• If they become aware of evidence of misconduct,
  must report it to top mngt and/or board
• Youre going to see corporate policy changes
  that set the stage for cultural changes
• Corporate outliers (e.g., women in macho culture)
  have been one type of whistleblower
• Source Business Week, 12/16/02

3
Restrictions on Office Romance

• DQ 8 Can you think of a job-related reason why a
  company would decide to restrict dating between
  employees and enforce a no-dating (no
  fraternization) policy? Do you think employers
  have a right to restrict any or all of the
  following off-duty conduct of their ees? (4)
  having a romantic affair outside of the marriage
  relationship?
• January 2006 survey found 50 of respondents have
  known married co-worker who was involved w/
  someone else at office
• American Management Association found only 12 of
  companies surveyed in 2003 had written policies
  on issue
• Of these, most simply prohibit mngrs from dating
  subordinates
• Some ers also bar romance among peers on same
  work team
• Romance changes the dynamics of team
  relationships
• Studies by SHRM show mngt taking increasingly
  punitive stance
• 55 of companies in 2001 survey said ee who
  mismanaged office romance would be transferred,
  up from 42 in 1998 study
• 35 said ees could be fired, up from 27
• January 2006 survey found 38 of ees have
  experienced unwanted advances from co-worker
• Source Wall Street Journal, 2/20/04 HRNews
  Online, 2/9/06

4
Basic Standards for Discipline

• Some basic standards of discipline should apply
  to all rule violations, whether major or minor.
  All disciplinary actions should include the
  following procedures at a minimum
• Communication of rules and performance criteria
• Documentation of the facts
• Consistent response to rule violations

5
The Just Cause Standard of Discipline

• In cases of wrongful discharge that involve
  statutory rights or exceptions to employment at
  will, U.S. courts require the employer to prove
  that an employee was discharged for just cause.
• Failure to answer yes to one or more of these
  questions suggests that the discipline may have
  been arbitrary or unwarranted.
• Notification Was the employee forewarned of the
  disciplinary consequences of his or her conduct?
• Reasonable Rule Was the rule the employee
  violated reasonably related to safe and efficient
  operations?
• Investigation Before the Discipline Did managers
  conduct an investigation into the misconduct
  before administering discipline?
• Fair Investigation Was the investigation fair
  and impartial?

6
The Just Cause Standard of Discipline (cont.)

• Proof of Guilt Did the investigation provide
  substantial evidence or proof of guilt?
• Absence of Discrimination Were the rules,
  orders, and penalties of the disciplinary action
  applied even handedly and without discrimination?
• Reasonable Penalty Was the disciplinary penalty
  reasonably related to the seriousness of the rule
  violation?
• Note Preponderance of the evidence is lowest
  quantum of proof
• Beyond reasonable doubt
• Clear and convincing
• Preponderance

7
COMPULSORY ARBITRATION OF EMPLOYMENT DISPUTES

• U.S. Sup Ct has allowed employers to impose as
  condition of employment requirement that any
  employment dispute be resolved by arbitration
  (even a dispute arising from statutory right,
  such as Title VII)
• Issues
• Cost
• Arbitrator selection
• Limits on awards