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 neighbourhood 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 jeopardising 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.
Recommendation
Taking the facts of the case into consideration and the options that are available to Luke, it is recommended that he should disclose the conflict of interest matter to the company formally. 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.
