The fact that something is legal doesn’t make it ethical. You might think it’s obvious, but it’s not, as evidenced by the fact that a former student recently told me that his Finance professor explicitly told him that if something is legal, it’s ethical…full stop. Of course, the student — my student — knew better, and related the story to me while rolling his eyes.
So let’s make the case explicitly, and explain why legality doesn’t determine ethics.
First, we can proceed by enumerating a few counter-examples:
- Most kinds of lying are perfectly legal, but lying is generally recognized as being unethical;
- Breaking promises is generally legal, but is widely thought of as unethical;
- Cheating on your husband or wife or boyfriend or girlfriend is legal, but unethical, though the rule against it is perhaps more honoured in the breach;
- …and so on.
So, if you want to hold that what is legal is also ethical, you’ve got to bite an awful lot of bullets, and accept as ethical a lot of behaviours that you very likely don’t want to accept.
Of course, it could be that the aforementioned Finance professor wasn’t making a general claim about the relationship between ethics and law at all, but was instead making a more subtle point about ethical standards in competitive domains. After all, ethical rules are different in adversarial situations, and it might well be argued that in the highly-regulated world of commerce, businesses should feel justified in helping themselves to whatever strategies aren’t specifically outlawed.
But that rationale is, at best, incomplete, and leaves open a different line of argumentation, one that applies even within competitive domains, and one that should truly drive a stake through the heart of the “legal=ethical” nonsense.
The ultimate disproof lies in the hidden circularity of the Finance professor’s argument, which we can illuminate by contemplating the process by which something is made illegal.
Consider: on what general basis is something made illegal? Let’s set aside cases of unscrupulous legislators passing laws simply to benefit themselves or their friends. In all legitimate cases of lawmaking, the law always has a moral purpose — generally, either to make people’s lives better and safer [e.g., seatbelt laws] or to protect some important right [e.g., food-labelling laws].
But if the aforementioned Finance professor were right, there would be no possibility of finding a moral rationale for any new law. After all, according to him, if a behaviour is legal [right now] then it is ethically OK [right now]. On what basis could new laws ever be passed? Certainly not on ethical grounds, because per hypothesis if something is currently legal is must be ethically OK. What if some horrible new toxin is discovered, the use of which by industry would pose significant risks to workers or consumers? Should it be banned? According to the Finance professor, it cannot be. After all, using it is legal, so it must be ethical; and if it’s ethical, it cannot be made illegal.
Anyone who tells you, or simply implies, that whatever is legal is also ethical is most likely indulging in self-serving rationalizations. When that idea comes up in the private sector, it’s likely that someone is trying to justify some profitable behaviour that is unethical but not-yet illegal. When that same idea comes up in academic circles, it’s more likely the self-interest they are trying to preserve is their own interest in avoiding the hard work of figuring out which business behaviours are unethical, and why.
[See also the entry on Law, from the Concise Encyclopedia of Business Ethics.]
Sometimes it’s easy to tell when something fishy is happening at work. But in other situations, it may be harder to tell if your employer is cutting corners on laws or regulations that you’re not familiar with.
According to the 2011 National Business Ethics Survey, nearly half of employees surveyed – 45 percent – observed improper conduct at work. The good news: Sixty-five percent of those who witnessed wrongdoing reported it.
The bad news: More than one out of five who blew the whistle – 22 percent – experienced some form of retaliation, including missing out on pay raises and promotions, harassment, and even being fired from their jobs.
What’s the right thing to do when your employer is doing something wrong?
Retaliation against whistle-blowers is a serious problem, and Congress has responded with 18 federal laws to protect employees who report misconduct. Whistle-blowers are protected when reporting violations of federal law, including:
- Environmental violations
- Financial misconduct
- Potential food or drug hazards
- An employer’s failure to pay wages
- Workplace health and safety violations
There’s also a catchall federal whistle-blower protection statute, and the Securities and Exchange Commission [SEC] has its own Office of the Whistleblower for reports of financial fraud and abuse.
The Federal False Claims Act allows whistle-blowers to collect a portion of any financial settlement the government collects when misconduct is reported – like if a hospital or health care provider, for example, is submitting false claims to Medicare.
If you believe you have been the victim of retaliation at work because you reported violations of a federal statute, you can file a complaint with the U.S. Department of Labor, which enforces most federal whistle-blower statutes. In most cases, you must file a report within 30 days of when you believe the retaliation has occurred.
One exception is if the misconduct involved allegations of fraud against the U.S. Department of Defense. In that case, you should contact the DOD Inspector General.
Thirty-seven states also have whistle-blower protection statutes.
Even with all this legal protection, making a decision to blow the whistle at work should not be taken lightly. In some situations, prominent whistle-blowers have won significant settlements after being fired illegally; others can share in significant monetary awards under the Federal False Claims Act.
But there are also whistle-blowers who lose their jobs and face serious personal and financial difficulties.
Some ideas to consider if you ever find yourself in this predicament:
- Just say no: If somebody at work asks you to skip a safety inspection on a piece of machinery, falsify a report to a customer, or participate in illegal harassment, tell them “no” in no uncertain terms.
- Talk to your co-workers: Have others seen the same problem you’re seeing? Are others concerned about it? Whatever action you take will be stronger if you act together, and you’ll also have stronger legal protections than if you act alone.
- Confront the problem: If you see wrongdoing, talk to the person involved, to that person’s boss or to your own boss. Let them know you intend to report the problem if it continues. Keep in mind, however, as Ask A Manager points out, while making sure laws and regulations are followed in your workplace is important, so is maintaining a good relationship with your boss and co-workers. If possible, be nonconfrontational instead of accusatory.
- Got a hotline? If your company has a hotline for reporting misconduct or unethical behavior, make use of this procedure. In many cases, a complaint to a government agency or a lawsuit will not succeed if you have not first exhausted internal remedies.
- Put it in writing: If initial efforts to resolve the problem are not successful and you want to pursue further action, its important put your observations in writing, print out a copy and keep it at home, where you control your own records. Note: Taking confidential documents from work into your own possession is usually not a good idea. They are typically the property of your employer, and removing such material could be grounds for discipline or discharge.
- Consult an attorney: Blowing the whistle is a high-stakes decision that may involve multiple state and federal laws. So it’s a good idea to talk an attorney before deciding on a course of action. The National Whistleblowers Center [a site run by private attorneys] operates an attorney referral service.
Telltale signs that somebody is trying to pull a fast one:
- If your supervisor says, “Let’s just keep this between us.”
- If you’re given a verbal order to carry out a task that doesn’t sound right – dump chemicals down a drain, for example – but nobody wants to put it in writing.
- If you ask a question about something that concerns you and nobody wants to answer.