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Ethical Analysis Of First Central Bank Essay

, Research Paper FIRST CENTRAL BANK CASE ANALYSIS The relevant facts are centered on communications concerning union activity by the bank’s employees, the bank’s management, and the union. On one occasion, membership cards had been distributed to various locations within the bank. On two separate occasions, bank employees had been directly involved in initiating union activity.

, Research Paper

FIRST CENTRAL BANK CASE ANALYSIS

The relevant facts are centered on communications concerning union activity by the bank’s employees, the bank’s management, and the union. On one occasion, membership cards had been distributed to various locations within the bank. On two separate occasions, bank employees had been directly involved in initiating union activity. The bank’s management communicated with its employees as an information and education campaign. Communication took place via meetings and letters. The union had formally communicated with the employees by letters sent to their home addresses.

A guard at the main office discovered that membership cards had been distributed to the various teller stations, the bookkeeping department, the switchboard and in the ladies lounge. Management never was able to determine who was responsible for the distribution of the cards.

Harold Newell, vice president of branch operations, reported to Johnson that number of the branch office employees had informed him that the three assistant auditors were engaging in union organizing activities in the branch offices while ostensibly instructing employees on the use of a new computer. According to Newell’s informants, the auditors spent only about 15 minutes explaining the new computer procedures and the remainder of the two-hour session talking about the advantages of having a union. At the end of the meetings they had passed out union membership cards. At the meeting with mgmt., the assistants admitted that they favored a union and had been trying to get other employees to join. Attorney Smith opinioned that the assistant auditors were a part of management and, therefore, that union activity by them was not protected under the NLRA.

Three employees at the bank’s main office were observed by a supervisor in a part of the bank other than where they worked, handing out union membership cards to other employees during working hours.

Johnson set up meetings with small groups of employees as a question and answer session. The first written communication to the employees from management was sent soon thereafter.

Employees reported to their supervisors that they had received a letter from the International Metalworkers Union (IMU) addressed to their homes.

In addition, the bank filed with the IRS a request to institute a hospital medical plan to be paid entirely by the bank. The bank produced witnesses and correspondence to show that work on the hospital medical plan had been undertaken before the bank was aware that the union was attempting to organize its employees.

Exhibit 4 included the bank’s statement: If you vote in favor of a union, all of these items (pension and profit sharing plans) are subject to negotiation.

Articulate the critical legal issues:

Congress enacted the National Labor Relations Act (NLRA) in 1935. The NLRA guaranteed workers the right to join unions without fear of management reprisal. It created the National Labor Relations Board (NLRB) to enforce this right and prohibited employer from committing unfair labor practices that might discourage organizing or prevent workers from negotiating a union contract.

The most important sections of the NLRA are Section 7, 8, and 9. Section 7 is the heart of the NLRA. It defines protected activity. Stripped to its essential, it reads: Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid and protection.

An employer’s free speech right to communicate his views to his employees is firmly established and cannot be infringed by a union or the NLRB. An employer’s rights cannot outweigh the equal rights of the employees to associate freely, as those rights are embodied in section 7 and protected by Section 8(a)(1) and the proviso to Section 8 (c) of the NLRA.

The First Amendment to the U.S. Constitution reads: Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

An employer is free to communicate to his employees any of his general views about unionism or any of his specific views about a particular union, so long as the communications do not contain a threat of reprisal or force or promise of benefit. He may even make a prediction as to the precise effects he believes unionization will have on his company. In such a case, however, the prediction must be carefully phrased on the basis of objective fact to convey an employer’s belief as to demonstrably probable consequences beyond his control or to convey a management decision already arrived as to close the plant in case of unionization.

If there is any implication that an employer may or may not take action solely on his own initiative for reasons unrelated to economic necessities and known only to him, the statement is no longer a reasonable prediction based on available facts but a threat of retaliation based on misrepresentation and coercion, and as such without the protection of U.S. Constitution Amendment I.

State the appropriate legal rules: What is the test the courts will apply to determine liability or guilt or innocence?

Section 8 of the NLRA defines employer unfair labor practices. Five types of conduct are made illegal:

1. Employer interference, restraint, or coercion directed against union or collective activity

2. Employer domination of unions

3. Employer discrimination against employees who take part in union or collective activities

4. Employer retaliation for filing unfair labor practice charges or cooperating with the NLRB

5. Employer refusal to bargain in good faith with union representatives

Threats, warnings, and orders to refrain from protected activities are forms of interference and coercion that violate Section 8(a)(1). Disciplinary actions, such as suspensions, discharges, transfers, and demotions, violate Section 8(a)(3). Failures to supply information, unilateral changes, refusals to hold grievance meetings, and direct dealings violate Section 8(a)(5).

Section 9 provides that unions, if certified or recognized, are the exclusive representatives of bargaining unit members. It prohibits the adjustment of employee grievances unless a union representative is given an opportunity to be present, and establishes procedures to vote on union representation.

Discuss your observations:

The bank’s employees communicated union involvement during working hours. Co-workers may contact fellow workers during free time, before or after work, or during breaks and meals. Off-work-site solicitations may be made anytime and by anyone.

Employers may restrict the distribution of pro-union literature and union authorization cards to nonworking areas, such as exits, parking lots, cafeterias, and rest rooms. The First Amendment to the U.S. Constitution permits both employees and employers to exercise fee speech by electioneering during union organization.

The bank’s management met with its employees as an information and education campaign. In addition, the bank sent written communication to its employees related to unionization. An employer’s free speech right to communicate with his employees is firmly established and cannot be infringed by a union or by the NLRB, and section 8 ( c) merely implements the First Amendment by requiring that the expression of “any views, argument or opinion” shall not be “evidence of an unfair labor practice,” so long as such expression contains “no threat of reprisal or force or promise of benefit” in violation of section 8 (a)(1).

The bank’s letter to employees dated 6/7/86 stated in part that if the employees voted in favor of a union, the pension and profit sharing plans were subject to negotiation. This action taken by the bank can be viewed, as a warning to refrain from protected activities are forms of interference and coercion that violate Section 8(a)(1).

The union wrote several letters to the bank’s employees. A union usually begins a campaign to organize a particular group of employees by having union representatives from the national headquarters of a local union chapter visit employees. They may distribute literature to build support for unionization. Union representatives may ask employees about their dissatisfaction with the employer and then attempt to build on any negative sentiments. Unions are usually forced to electioneer on or near the employer’s property. However, the presence of nonemployees on the employer’s land is a trespass that violates the employer’s property rights.

Draw you legal conclusions, discuss your ethical conclusions

I conclude that First Central Bank of River City did not perform unfair labor practices involving its employees and the International Metalworkers Union. The bank utilized its rights under the First Amendment and was not in violation under the NLRA. The one instance that I questioned concerns a statement made by management related to pension and profit sharing plans. Management indicated that the plans were subject to negotiation if the employees voted for the union. Since the pension and profit sharing plans are voluntary by the bank and thus the bank has control, the statement suggests coercion. However, no threat of reprisal or force or promise of benefit was evident.

Furthermore, I conclude that the International Metalworkers Union did not perform any unfair labor practices and did not violate rules under the NLRA.

What key ethical issues are involved in the case?

I assume that one of the bank’s employees provided the union with a computer printout of employee names and addresses.

Bank employees using company’s facilities and during working hours to promote union activity. On two occasions the bank had the opportunity to discharge two employees based on violation of company policy. Assistant auditors had engaged in union organizing activities on company property and time. Three employees at the bank’s main office were observed handing out union membership cards to other employees during working hours.

The bank had never developed an employee handbook or a pamphlet explaining the various benefit plans.

Following the filing of hospital medical plan with the IRS, announcements were sent to all department heads, supervisors, and branch managers. No letter was sent directly to the employees, but their supervisors informed them about it.

What ethical alternatives exist?

The employee responsible for providing the printout of employee names and addresses could have requested permission from First Central Bank. The printout was the property of the bank subject to confidentiality of information and privacy. Company owned or issued property shall not be used or applied in order to obtain personal benefit or to harm another person. This ethics policy prohibits employee theft, fraud, embezzlement or misappropriation of property belonging to the company.

The employees should limit union organizing activity to break hours, before and after work and off the premises of its employer. The employees have a responsibility to its employer.

The bank should produce information on benefits plans to all employees. In addition, all employees should have been sent a letter about the hospital medical plan.

Ethically, what should be done?

First Central Bank should develop an employee handbook or pamphlet explaining the various benefit plans. Employees have the right to know the benefit plans its employer has available. In addition, policies should exist regarding internal communication to its employees. Written communication and oral communication should be distributed equally to all employees. Employees should be treated fairly when considered for all activities.

First Central Bank should establish compliance policies. The policies would require ethical and legal behavior by anyone working for or on behalf of the bank.

What evidence and reasoning support your responses?

The ethical theory referenced in the analysis is Teleology. Teleological theories give priority to the good over the right, and they evaluate actions by the goal or consequences that they achieve. Thus, correct actions are those that produce the most good or optimize the consequences of choices, whereas wrong actions are those that do not contribute to the good. Here, First Central had the right to discharge the employees due to improper behavior. However, management decided that it was better not to take any disciplinary action other than to deliver a warning. The Utilitarianism approach embodies the notion of operating in the public interest rather than for personal benefit.

Rights-base ethics on basic moral duties: one ought to improve the lot of others with respect to virtue, intelligence, and happiness. Integrity is usually thought about as a virtue. Aristotle points out three things about virtues that are particularly relevant here. First, virtues are habits of character, that is, they are deeply engrained in our character through long years of training and commitment. Second, virtues are those habits or strengths of character necessary to human flourishing. Quite simply, we need the virtues to lead a happy and fulfilled life. The virtue of courage is necessary for anyone who has goals that involve overcoming things they fear, in other words, the virtue of courage is necessary for all of us. First Central Bank had the courage to install a fully paid hospital and major medical plan for all of its employees in spite of their fear of unionization.

There is a third and final point Aristotle makes about the virtues that is relevant here. A virtue is always a mean between what Aristotle calls excess and deficiency, between having too much of something and having too little.

Like courage, integrity is also a virtue. It, too, is a habit of character, something that exists over a long period of time. People don?t have integrity sporadically. The whole idea of integrity is that is lasts. Integrity is opposed to the “here today, gone tomorrow” attitude. It is that strength of character that allows us to be true to ourselves, and in particular true to our most basic commitments. First Central Bank was the oldest commercial bank in the River City community. The bank was looked at as a prestigious place to work. Jobs at First Central were valued because of their security. Employees were never laid off or discharged for poor work. In other words, the bank was committed to its employees and to the community. Therefore, an enhancement to the benefit package showed the character it was known for.

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