Facts of the Case
Luke has been working for the company on a project which involves developing a recently purchased land by the company in order to build an entertainment store on the land. Luke believes that as soon as the announcement for this project will be made, the real estate prices in the area will go down.
Luke’s brother Owen lives in the neighborhood of the land. Owen recently told Luke that he got an average offer for his house recently. Owen is not sure about the offer and has asked Luke whether he should sell his house or wait for a few more years to see if he can get a better price.
Ethical Issue Involved
The ethical issue involved in this case is regarding Luke’s confidentiality obligation to the company, while at the same time advising his brother. If he tells his brother about the company project, it would not only be unethical, it would be illegal as he will break employee confidentiality code.
Also, since Luke’s brother has house in the area, which makes Luke in having personal interest, he has to consider disclosing the situation to the company.
Analysis of the Issue
The confidentiality agreement that Luke has towards the company prohibits him from disclosing the information about the project to his brother Owen. Luke knows that the real estate prices in the area will come down once the public announcement is made. Yet, he has an obligation to not mention about the project while giving his brother Owen advice about selling his house.
The case is a classic example of the theory of virtue ethics. Many people may not consider this matter as unethical as they would feel that Luke has a responsibility towards his brother and he would not be doing anything wrong in telling him about possible price depreciation in the area, maybe without mentioning the project.
The theory of virtue ethics states that a person’s ethical or unethical choices reflect his personal character. Everyone may have their own moral code and what he thinks is right or wrong. And the choices we make are a reflection of that personal moral code.
The problem in this situation is that if we act according to our moral code that Luke may warn his brother about price depreciation even without mentioning the project, it is still wrong and unethical, as Luke arrived at the conclusion of possible price depreciation after gaining knowledge of the company project.
So even if he may personally consider the situation to be normal and does not feel anything wrong in telling his brother Owen about possible price depreciation without mentioning the company project, it would still be unethical on his part.
The situation where Luke may have to disclose this case and his personal conflict of interest to the company is a case of the theory of Golden Rule as well as of virtue ethics. The Golden Rule theory states that we should treat others in the same manner as we want to get treated.
And although the merits of the theory have been widely debated with some arguing that this theory would produce an ethical result only when two or more highly ethical persons are involved, this theory can act as a guiding light in this case.
Imagine a situation where the company is in financial trouble and is banking on a big project to remain profitable. If the project fails however, it may have to fire some of its staff. Now from the position of Luke, he may want the company to discuss the situation with the employees, so that they are aware of the future possibilities regarding their career at the company.
In the same manner, the company expects Luke to disclose this conflict of interest concerning his brother’s house in the same area of the project. Luke may have feared till now that if he discloses this conflict, it may mean that he would be removed from the project and that may affect his career growth.
However, Luke needs to understand that by not disclosing this conflict, he is further jeopardizing his position in the company. If this fact comes out in the open at a later point in time, he risks getting fired from the company.
Also, the theory of virtue ethics applies to this situation of conflict disclosure as well. It may be okay for some people to think that they need not disclose this situation to the company; it is unethical and reflects poorly on their character.
In the process of ethical decision making by Luke, another theory which can be utilized is the Utilitarianism theory which focuses on the utility of a decision. According to this theory, a decision should tend to maximize collective happiness by providing the maximum benefits to the greatest number of people. Based on this theory, if Luke decides to adhere to his employee confidentiality code and discloses nothing to how brother, it would help ABC Company to fulfill its project objectives and gain market edge over the rivals.
This in turn would result in company’s growth and the development of Luke as the project manager and other related employees and staff of ABC. On the contrary, if Luke chooses to reveal the information to his brother, he can opt to sell his house instantly at good market prices. Secondly, if Owen further decides to inform other people having similar interests in the property, it will help them get a good market price before the price of the real estate falls considerably.
The Theory of Universal Ethics is yet another ethical theory which considers an action or a decision ethical if it has a universal application and that anyone or everyone would apply the same without any conflict. According to this perspective, Luke’s decision to help his brother by disclosing the current situation would be unethical under the lens of this theory since this decision does not hold universal application by other employees of ABC Company. Such an act on Luke’s part would be a direct violation of his employee confidentiality code for self-interest and personal gains and would count under breach of ethics. In a later point of time, such an act may hamper the progress and growth of ABC’s project on this real estate, thus jeopardizing the profit prospects and company’s future development goals.
On the contrary, if Luke chooses to disclose the information to his brother, he will sell the property immediately and possibilities are abound that he will spread the news to other property owners in the same vicinity, thus making everyone sell his property. In a later point of time, ABC may run in-depth investigations into this sudden price escalation of real estate which may bring out Luke’s name as the brother of one of the property sellers. This will further tarnish his image as a loyal and trustworthy employee and he may run into the risk of losing his job as well as legal claims raised against him by ABC Company.
Recommendation
Taking the facts of the case into consideration and the ethical options that are available to Luke, it is recommended that Luke should not reveal to his brother confidential information about the project and his involvement with the project as the manager. In doing so, he will save his professional integrity and his ethical duty towards his company which is a universally accepted principle and is also related to his personal and moral behavior. He may choose to disclose the conflict of interest matter to the company formally but in this case, he runs into the risk of revealing to the company that he has some kind of personal interest vested in the project and consequently, despite his honesty, he may be looked at with doubts by company officials as to anytime, Luke can reveal the confidential details to his brother to save him from financial losses. Also, he may not advise his brother Owen about selling or not selling his house. He should not tell his brother about the company project. And although his brother may suspect that Luke is not telling him some non-public information about the real estate situation in the area, he would not be able to judge whether that information will have a positive or negative effect on prices, and thus may not base his decision on Luke’s advice.
