Ethics and The Conduct of Business: Eighth Edition

Ethics and the Conduct of Business
Eighth edition
Chapter 8
Employment Rights
Copyright © 2017, 2012, 2009 Pearson Education, Inc. All Rights Reserved
Modules
• Introduction: Employment Rights
• 8.1: Employment at Will
• 8.2: Right to Due Process
• 8.3: Freedom of Expression
• 8.4: Workplace Democracy
• 8.5: Worker Compensation
• 8.6: Executive Compensation
• Conclusion: Employment Rights
Learning Objectives (1 of 2)
• 8.1: Recognize the three basic arguments that justify
employment at will and the three types of exceptions to this
doctrine that protect employees from unjust dismissal
• 8.2: Describe the main arguments and principles of the
Model Employment Termination Act that support the right of
employees to due process in employment decisions
• 8.3: Explain the significance of freedom of expression for
employees, the extent to which it is protected by law, and
the arguments for and against this right in the workplace
Learning Objectives (2 of 2)
• 8.4: Analyze the correlation between worker participation
and workplace democracy and how Dahl's argument
supports workplace democracy as a right
• 8.5: Assess the market forces and other factors that
influence employee compensation, the fairness of wages,
and justifications for a minimum wage
• 8.6: Evaluate the reasoning underlying criticisms and
justifications of the compensation for top executives
Introduction: Employment Rights
• Case Study: The Firing of Robert Greeley
• Examining at-will employment
• Employers’ rights vs. Employee rights
• Due process
Figure 8.1: Arguments Used to Justify
Employment at Will
8.1: Employment at Will (1 of 3)
Objective: Recognize the three basic arguments that justify employment at will and the
three types of exceptions to this doctrine that protect employees from unjust dismissal
• 8.1.1: Property Rights Argument

– Employers and employees own property
– Exchange of property between the parties
– Downside
• 8.1.2: Freedom of Contract Argument
– Overview
– Downside
• 8.1.3: Efficiency Argument

– Employers granted freedom to choose workers
– Employee benefits
– Consequences of job immobility
Table 8.1: Arguments Supporting
Employment at Will
Argument Premise Application
Property Rights Argument Both employers and employees have Employers have wages and
“property” of some economic value employees have labor. They are free
and the right to determine what they to buy and sell this “property” or
do with their own property. accept and refuse offers for it.
Freedom of Contract Argument Employment is a contractual Excessive limits on the agreements

arrangement between employers and that can be made between employers
employees. Both have the right to and employees violate their freedom
contract as they choose. of contract.
Efficiency Argument This utilitarian argument relies on the Many employers and employees
importance of employment at will for agree to employment at will, so it
the efficient operation of business, benefits both parties and allows the
which benefits employers, most efficient use of all resources.
employees, and society.
• 8.1.4: Exceptions
– Restrictions to employment-at-will
Figure 8.2: An Acceptable Employment
at Will Doctrine
8.2: Right to Due Process
Objective: Describe the main arguments and principles of the Model Employment
Termination Act that support the right of employees to due process in employment
decisions
• 8.2.1: Support for Due Process

– Three arguments to support due process
• 8.2.2: Law of Due Process
– Features
– Model Employment Termination Act
8.3 Freedom of Expression (1 of 2)
Objective: Explain the significance of freedom of expression for employees, the extent to
which it is protected by law, and the arguments for and against this right in the workplace
• 8.3.1: Defining Freedom of Expression

– Four elements
– Definition
• 8.3.2: Legal Protection for Expression
– American law
– Two provisions
8.3 Freedom of Expression (2 of 2)
Objective: Explain the significance of freedom of expression for employees, the extent to
which it is protected by law, and the arguments for and against this right in the workplace
• 8.3.3: Arguments over Expression

– Two arguments
– Just grounds for dismissal
8.4 Workplace Democracy
Objective: Analyze the correlation between worker participation and workplace democracy
and how Dahl's argument supports workplace democracy as a right
• 8.4.1: Participation and Democracy

– Overview
• 8.4.2: Arguments for Democracy
– Overview
– Two moral arguments
– Dahl’s argument
8.5 Worker Compensation (1 of 2)
Objective: Assess the market forces and other factors that influence employee
compensation, the fairness of wages, and justifications for a minimum wage
• 8.5.1: Setting Wages

– Overview
– Factors that determine pay
– Correction of unequal distribution of wealth
• 8.5.2: Market Outcomes
– Economist view of wages
– Efficient markets
– Market justice
8.5 Worker Compensation (2 of 2)
Objective: Assess the market forces and other factors that influence employee
compensation, the fairness of wages, and justifications for a minimum wage
• 8.5.3: Minimum Wage

– Rationales for minimum wage legislation
8.6 Executive Compensation
Objective: Evaluate the reasoning underlying criticisms and justifications of the
compensation for top executives
• 8.6.1: Criticism of CEO Pay

– Condemnation of CEO pay
• 8.6.2: Justifying CEO Pay
– Justifying CEO pay
• 8.6.3: Problems with Justification
– Bebchuk and Fried thesis
Conclusion: Employment Rights
• Employee rights are important
• Workers are sensitive to unjust treatment
• Due process in termination has moral grounding
• Labor law ensures just treatment of workers

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Ethics and the Conduct of Business

• 8.1.1: Property Rights Argument

• 8.1.3: Efficiency Argument

Freedom of Contract Argument Employment is a contractual Excessive limits on the agreements

• 8.2.1: Support for Due Process

• 8.3.1: Defining Freedom of Expression

• 8.3.3: Arguments over Expression

• 8.4.1: Participation and Democracy

• 8.5.1: Setting Wages

• 8.5.3: Minimum Wage

• 8.6.1: Criticism of CEO Pay

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