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Flatland, Ethicsland, and Legalland

Published online by Cambridge University Press:  23 January 2015

Robert A. Prentice
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Extract

John Hasnas's fine article, “Up from Flatland: Business Ethics in the Age of Divergence,” fails in its stated goal of challenging the mainstream business ethics community's methods of analyzing normative issues. However, it achieves what is likely Hasnas's true goal of alerting both business ethicists and managers of the bigger stakes now in play when the federal government indicts employees and seeks their employers’ cooperation in establishing the prosecutor's case. While prosecutorial overreaching is a legitimate concern that deserves to be highlighted, it requires no qualitative change in normative ethical analysis. That analysis now involves different inputs (greater stakes for firms and employees), but continues to involve a familiar but complicated weighing of shareholder interests against employee interests and, sometimes, a weighing of both against the requirements of the law.

Type
Responses to Hasnas
Information
Business Ethics Quarterly , Volume 17 , Issue 3 , July 2007 , pp. 433 - 440
Copyright
Copyright © Business Ethics Quarterly 2007

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References

Notes

While I was preparing this piece, my friend and colleague Robert C. Solomon died. He was a great philosopher, an influential business ethicist, a fabulous teacher, and a fine man. I dedicate this article to him.

1. John, Hasnas, Up from Flatland: Business Ethics in the Age of Divergence, 17 Bus., Ethics Q. 399 (2007).Google Scholar

2. Id. at 399.

3. Apparently, so did a federal judge in New York. See U.S. v. Stein, 435 F.Supp.2d 330 (S.D.N.Y. 2006) (criticizing handling of KPMG tax shelter prosecution). Even the Justice Department must have been persuaded, for it put self-imposed restraints on its procedures;. see the “McNulty Memorandum” at http://www.usdoj.gov/dag/speech/2006/mcnulty_memo.pdf. The changes made do not quell the fears of prosecutorial abuse that many share with Hasnas. See Pamela, A. MacLean, McNulty Memo on Attorney-Client Privilege Blasted for Lack of Change, Nat'l, L.J., Jan. 26, 2007Google Scholar (noting that “few believe that what has been dubbed the McNulty memorandum … will resolve the simmering anger among corporate counsel over what has been called a ‘culture of waiver’”); Brooke Masters & Patti Waldmeir, Rules for Fighting Corporate Crime ‘Still too Tough,’ FIN. TIMES, Dec. 13, 2006, at 6 (noting signs “that the changes would not quell debate on whether the department should be forced by Congress to make bigger changes”).

4. It is, after all, “the duty of the legislator to frame laws that reflect morality and therefore provide the citizen with … the state-authorised duties to do what morality already obliges him to do in conscience.” DAVID S. ODERBERG, MORAL THEORY: A NON-CONSEQUENTIALIST APPROACH 62 (2000) (emphasis in original).

5. De George notes that “[a] utilitarian analysis, as a moral analysis, weighs the good and bad results of an action on everyone affected by it.” RICHARD T. DE GEORGE, BUSINESS ETHICS 45 (2d ed. 1986) (emphasis in original). Certainly this would include jail sentences for employees, as De George argues that whereas a business's utility analysis would just look at the pluses and minuses of a particular decision for the firm, a utilitarian moral analysis would look at the impact of the decision on third parties, such as employees.

6. See, e.g., Theodore, Y. Blumoff, Justifying Punishment, 14 Can. J. L. & Juris. 161, 172Google Scholar n. 48 (2001) (explicitly noting in philosophical analysis of the ethics of punishment that his analysis necessarily excluded “strict liability crimes for which no mens rea element needs to be provided”).

7. THOMAS M. GARRETT & RICHARD J. KLONOSKI, BUSINESS ETHICS 1 (2d ed. 1986).

8. For this reason, Harvard's Constance Bagley was able to state that the first question the ethical decision maker must always ask is: “Is it legal?” Constance Bagley, E., The Ethical Leader's Decision Tree, 81 Harv., Bus. Rev. 18, 18 (Feb. 2003).Google Scholar

9. See, e.g., Walter, H. Bennett Jr.,, The University of North Carolina Intergenerational Legal Ethics Project: Expanding the Contexts for Teaching Professional Ethics and Values, 58 Law & Contemp. Probs. 173, 190Google Scholar n. 34 (1995) (using Huck Finn's internal monologue regarding whether to turn Jim in as a runaway slave as an ethical dilemma in an ethics course).

10. See Brian, H. Bix, Physician Assisted Suicide and Federalism, 17 Notre, DameEthics, J. L. & Pub., Pol'y 53 (2003)Google Scholar (discussing medical marijuana, physician-assisted suicide, and same-sex marriages as examples of issues where legal rules and ethical mandates might differ); Wells Dixon, J., Note, Conant v. McCaffrey, Physicians, Marijuana, and the First Amendment, 70 Rev., U. Colo. L. 975, 978 (1999)Google Scholar (noting that if a “physician believes medical marijuana is the best treatment for the patient, he violates a professional ethical duty when he chooses not to prescribe or recommend it”); Hayry, M, Prescribing Cannabis: Freedom, Autonomy, and Values, 30 Ethics, J. Med. 333, 336 (2004)Google ScholarPubMed (also analyzing the conflict between physicians’ ethical duty to prescribe cannabis to patients when their professional judgment calls for it and their legal do to respect a legal prohibition).

11. See, e.g., R. D. DIXIT, CIVIL DISOBEDIENCE: A PHILOSOPHICAL STUDY (1980); RONALD DWORKIN, A MATTER OF PRINCIPLE 104–18 (1985); Frederick, A. Elliston, Civil Disobedience and Whistleblowing: A Comparative Appraisal of Two Forms of Dissent, 1 Bus, J. ETHICS 23 (1982);Google Scholar EDWARD H. MADDEN, CIVIL DISOBEDIENCE AND MORAL LAW IN NINETEENTH CENTURY AMERICAN PHILOSOPHY (1968).

Legal ethicists have also addressed the requirement for civil disobedience by attorneys when conflicts arise between law and morality. See Jorge, L. Carro, Book Review: Attorneys’ Professional Conduct: A Question of Law and Morality—Ethics and the Legal Profession, 56 Rev., U. Cin. L. 207, 211 (1987)Google Scholar (making this point); Judith, A. McMorrow, Civil Disobedience and the Lawyer's Obligation to the Law, 48 Wash. & Lee L. Rev. 139 (1991).Google Scholar

12. The AMA's Council on Ethical and Judicial Affairs notes that “the law seldom requires unethical conduct,” but concludes that in “exceptional circumstances of unjust laws, the ethical responsibilities should supersede legal obligations.” Council on Ethical and Judicial Policy, Fundamental Elements of the Patient-Physician Relationship E-10.01, available at http://www.ama-assn.org.

13. Hasnas, supra note 1, at 400 (emphasis added).

14. Note that even Milton Friedman would not argue that managers have a duty to maximize profits for shareholders or wages for employees in violation of the law, as Hasnas seems to imply. In other words, there is little evidence of a “growing divergence” between managers’ ethical and legal obligations, as Hasnas claims. Hasnas, supra note 1, at 400, 401.

15. Hasnas argues that under both DOJ policy and the Sentencing Guidelines employers are placed in an irresolvable dilemma in that they need information from employees but cannot get that information if they do not make promises of confidentiality that prosecutors may force them to breach. But the policies urge employers to establish an anonymous whistleblower hotline that allows the firm to gather the information necessary to have an effective compliance program without learning the identity of the whistleblowers. Therefore, the firm cannot breach a promise of confidentiality because its managers usually do not know the identity of the whistleblower.

16. I am not sure how Hasnas would prove this proposition true or how I would prove it untrue. It is, in any event, not a new problem. Corporations are already constrained in how closely they may monitor employees, yet they have long faced civil and criminal liability if employees err. For example, there are certain questions that employers may not ask employees when hiring them that might reflect on the employees’ ability and desire to comply with the law. Nor can employers promise that they will not monitor employees’ e-mail but then do so any way (without courting invasion of privacy suits by the employees). Nor can firms implant computer chips in employees’ heads to monitor their off-work activities, although to be able to do so might enable them to avoid various types of liabilities.

17. As noted earlier, fortunately we are joined in our discomfort by U.S. District Judge Lewis A. Kaplan, who had the power to do something about it.

18. There is substantial evidence that KPMG and many of its employees acted criminally with regard to many tax shelters. See generally Tanina, Rostain, Travails in Tax: KPMG and the Tax-Shelter Controversy, in Legal Ethics: Law Stories 89 (Rhode, Debora L. & David, Lu-ban eds., 2006);Google Scholar “U.S. Tax Shelter Industry: The Role of Accountants, Lawyers, and Financial Professionals: Four KPMG Case Studies: FLIP, OPIS, BLIPS, and SC2,” Minority Staff of the Permanent Subcommittee on Investigations of the Committee on Government Affairs, United States Senate, 108th Cong., 1st Sess., S. Prt. 108–34, at 7–16 (2003).

19. See generally, Robert, C. Solomon, Victims of Circumstances? A Defense of Virtue Ethics in Business, 13 Bus., Ethics Q. 43 (2003).Google Scholar

20. See, e.g., O. C. FERRELL & JOHN FRAEDRICH, BUSINESS ETHICS: ETHICAL DECISION MAKING AND CASES 62–64 (1991) (discussing various models).

21. See Manuel, Velasquez et al., Thinking Ethically: A Framework for Moral Decision Making, in Business Ethics 2 (John, E. Richardson ed., 18th ed. 2006/2007)Google Scholar (noting that “[t]he first step in analyzing moral issues is obvious but not always easy: Get the facts.”).

22. Again, I stress that I do not believe this proposition to be either novel or controversial.

23. Nifong's conduct as prosecutor of the infamous Duke lacrosse rape case should not be prejudged, of course. The gradual developments in the prosecution of that case make it surpassingly clear that prejudging guilt or innocence can be very dicey business. However, if current appearances are confirmed by later evidence, Nifong's handling of the case may have been a signal example of prosecutorial misconduct. See David, Barstow & Duff, Wilson, Prosecutor in Duke Sexual Assault Case Faces Ethics Complaint from State Bar, Times, N.Y., Dec. 29, 2006, at A22Google Scholar (noting that a seventeen-page complaint had been filed with the state bar association regarding Nifong's conduct of the case); David Zucchino, State Prosecutors Take Control of Duke Rape Case, L.A. TIMES, Jan. 17, 2006, at A18 (noting that because of concerns over Nifong's conduct, he had been replaced as prosecutor of the case).

24. Novelist Grisham has, of course, focused attention on prosecutorial misconduct in Oklahoma with his best-selling nonfiction book. JOHN GRISHAM, THE INNOCENT MAN (2006).

25. See, e.g., David Aaron, Note, Ethics, Law Enforcement, and Fair Dealing: A Prosecutor's Duty to Disclose Nonevidentiary Information, 67Google Scholar FORDHAM L. REV. 3005, 3027 (1999); Ellen, Yaroshefsky, Wrongful Convictions: It is Time to Take Prosecution Discipline Seriously, 8 Rev, D.C. L. 275 (2004);Google ScholarLittle, Rory K., Proportionality as an Ethical Precept for Prosecutors in Their Investigative Role, 68 Fordham, L. Rev. 723 (1999);Google ScholarFred, C. Zaccharias, Structuring the Ethics of Prosecutorial Trial Practice: Can Prosecutors Do Justice?, 44 Vand., L. Rev. 45 (1991).Google Scholar

26. See, e.g., Lyn M. Morton, Note, Reconsidering Absolute Prosecutorial Immunity, 7 Geo., J. Legal Ethics 1083 (1994);Google ScholarEllen, S. Podgor & Jeffrey, S. Weiner, Prosecutorial Misconduct: Alive and Well, and Living in Indiana?, 3 Legal Ethics, Geo. J. 657 (1990).Google Scholar