Workplace Ethics: How to Tackle the Small Lapses and Avoid a Company Crisis

Workplace Ethics: How to Tackle
the Small Lapses and Avoid a
Company Crisis
Janette Levey Frisch, Esq.

Janette Levey Frisch, Esq.
Employment and HR attorney Janette Levey Frisch has more
than 20 years of legal experience, more than 10 of which
she has spent in employment law. It was during her tenure
as sole in-house counsel for a mid-size staffing company
headquartered in Central New Jersey, with operations all
over the continental US, that she truly developed her
passion for Employment Law.
Janette works with employers on most employment law
issues, acting as the Employer’s Legal Wellness Professional
— to ensure that employers are in the best position
possible to avoid litigation, audits, employee relations
problems, and the attendant, often exorbitant costs.

Disclaimer & Proprietary Information
• Contents of this presentation are for informational purposes only and are
not intended as legal advice or to replace consultation with local counsel.
Attending this presentation does not create an attorney-client
relationship.
• This presentation is intended as an overview of key issues regarding
workplace ethics. Consult with local employment counsel and/or ethics
expert with any questions specific to your organization.
• Content herein is proprietary information and may not be duplicated,
published or disseminated without express permission from Janette
Levey Frisch, Esq
© Law Office of Janette Levey Frisch 2018, All Rights
Reserved.

What is Workplace Ethics?
• The moral principles that guide a person's actions in the workplace;
• Usually shaped by laws, industry or government regulations or even
precedents set by other companies in the industry or marketplace
demands;
• Generally derived from secular, self-transcending values, such as:
trustworthiness, integrity, fairness, responsibility, accountability,
loyalty, respect, caring, honesty;
• Ethics derived by laws can be a springboard to create workplace ethics,
such as: anti-discrimination policies, anti-harassment policies;
safety policies, anti-theft policies, policies for interacting with
clients and/or the public;
Reserved.

Examples of Workplace Ethics
• Policies for disclosing the sourcing of materials or labor to inquiring
consumers.
• Anti-discrimination policies regarding interactions with between management
and employees, co-workers, clients, such as requiring employees to address
all clients in English, rather than make assumptions about their languages
based on their appearance.
• Policies that provide specific boundaries for romantic relationships between
employees, including relationships between supervisors and their reporting
staff.
• Time-off policies that provide clear instructions for how employees may
request and use their paid time off.
• Clear explanation of the disciplinary actions that will be taken against
employees who violate workplace ethical guidelines.
Reserved.

Examples of Workplace Ethics Violations
• Asking a job applicant if she has children, as this can be construed as a
discriminatory question.
• Quoting a higher price for a service for a Latino client than the price typically
quoted for white clients.
• A supervisor failing to provide necessary safety equipment for staff to
perform a manual labor task.
• An employee lying about his position to a prospective vendor or making
orders or decisions he is not in the position to make.
• Engaging in gossip or starting a rumor about a fellow employee.
• Failing to report a piece of broken equipment to a supervisor.
• Covering up unethical or ethically ambiguous business practices.
• Paying workers less than the legal minimum wage.
Reserved.

Examples of Workplace Ethics Violations, cont’d
• Failing to provide testimony to support a colleague’s sexual harassment claim
despite having witnessed the harassment firsthand.
• Taking office supplies from work for personal use.
• Offering a raise or other favorable treatment in exchange for a sexual
relationship with a subordinate.
• Giving a subordinate preferential treatment because she is a friend.
• Making personal phone calls during work hours.
• Making personal purchases with a company credit card.
• Calling in sick when really, the employee wanted to spend the day at the beach.
• Engaging in exploitative sourcing or labor practices.
Reserved.

Why are Workplace Ethics So Important?
• Ethics keep all employees (including senior management) accountable for their actions;
• Robust codes of ethics provide employees with a sense or security by setting appropriate
boundaries;
• Management can make decisions that benefit company as a whole and simultaneously meet
employee and customer/client needs;
• Helps employees feel valued;
• Provides employees guidelines as to how to deal with difficult customers or situations;
• Provides managers guidelines as to how to address challenging employee concerns or situations;
• Creates healthy relationships between employees;
• Minimizes financial and legal issues which can be costly and devastating (more on this as we
continue).
• “No organization is free from ethics and compliance challenges” Patricia Harned, CEO, Ethics and
Compliance Initiative.
Reserved.

Some Numbers
• According to the 2013 National Business Ethics Survey of the US
Workforce:
• Just over 40% of workers said they had observed on-the-job
misconduct that violated their employers’ standards or rules.
• Of those who witnessed misconduct, 63% reported what they saw.
• Of those who reported misconduct, 21% said they experienced some
form of retaliation.
• 60% of misconduct involved someone with managerial authority (i.e.,
“the very people who are supposed to set a good example of ethical
conduct and make sure employees honor company rules.”) Roughly a
quarter of observed misconduct involved senior managers.
Reserved.

Ethical Issues with High-Level Employees
• Reasons high-level employees may be more likely to behave
unethically:
• More opportunities to break the rules;
• More pressure to show results;
• Knowing the difficulty of achieving the company’s ends, may be
more willing to rationalize questionable means.
BUT:
You can’t expect employees to do the “right thing” if they regularly and
frequently see managers breaking the rules.
Reserved.

Common Myths About Workplace Ethics
Myth #1: It’s easy to be ethical.
Reality: Ethical decisions are complex and ambiguous.
80% of adults look outside themselves for guidance.
Reserved.

Common Myths About Workplace Ethics, cont’d
Myth #2: Unethical behavior in the workplace comes
from “bad apples”.
Reality: People tend to be followers. Bad behavior
therefore often flows from a flawed system.
Reserved.

Myth #3: You can manage ethics through formal codes
and programs.
Reality: Effective ethics management must be part of a
larger coordinated cultural system supporting ethical
conduct every day.
Reserved.

Myth #4: Ethical leadership is mostly about leader
integrity.
Reality: Effective ethics management addresses what
to expect of all others, not just the leaders.
Reserved.

Myth #5: People are less ethical than they used to be.
Reality: Scandals have been around pretty much
forever. Scripture, the Talmud and the Koran addressed
these issues.
Source: Trevino, Linda Klebe, and Brown, Michael E., “Managing
to be ethical: Debunking five business ethics myths” Academy of
Management Executive, 2004, Vol. 18, No. 2
Reserved.

Building Blocks for an Ethical Workplace
• Compliance – organization’s norms, values and ethical expectations,
and its management practices.
• Must communicate them in concrete terms that all employees can
understand and relate directly to daily work activities.
• Fairness- perceived justice of policies and practices affecting
employees and their work. Trust arises when employees perceive
organization and leaders as fair. Employees assess fairness on how
managers treat employees.
• Trust – employees assess ethical character of those they interact
with at work and then decide to trust – or not.
Reserved.

• Some of the most important characteristics of trustworthy
managers:
• Willingness to listen to criticism;
• Willingness to admit and take responsibility for ethical
mistakes;
• Willingness to ask for forgiveness and take corrective
action.
• When managers are good role models, demonstrating ethical
values, employees are more likely to meet expectations and
even give extra time and effort to accomplish company’s
goals.
Building Blocks for an Ethical Workplace- Trust,
cont’d
Reserved.

• Ethical working self-concept: degree to which employees
make organization’s ethical values part of their concept of who
they are and what is expected of them as members of the
organization.
• Most powerful of all components, but can’t have it without the
other three.
• Motivates employees to display highest levels of ethical
judgment and action and to go above and beyond their job
description.
• Asking employees what is right and wrong with the company and its
leaders and about level of trust within your company, bringing together a
committee from all levels and empowering them to create a common
strategy and purpose for the company more likely to get you buy-in from
staff and management.
Building Blocks for an Ethical Workplace- Trust,
cont’d
Reserved.

3 Models of Ethical Workplace Culture
• Compliant- the bare minimum required by law, regulation, social
convention. Concerns limited to contractual obligations and
commitments. Will include some respect for employees’ rights and the
employer’s property. Typically emphasize self-enhancing themes (e.g.
Company's prestige, personal benefits of working there, Emphasize
following all relevant laws and regulations and adhering to
conventions, e.g. honesty and respect.
• Positive ensures clear communication of self-transcending values
and expectations and adherence by employees to highest levels of
justice and fairness. Encourages managers to become role models
and to learn from inevitable ethical dilemmas arising while conducting
business. Includes concrete examples drawn from company’s own
case files to ensure that employees understand exactly what is
expected of them in terms of ethical behavior;
Reserved.

3 Models of Ethical Workplace Culture
• Virtuous- makes adherence to self-transcending values a priority.
Ethical values are synonymous with firm’s value. Ethics is a
substantial part of managers’ performance evaluations. Recruitment
emphasizes self-transcending values so that candidates will choose
to work for the company based at least in part on its ethical appeal.
Often use challenging onboarding programs to screen out new
employees whose values are not congruent with firm’s ideals and
aspirations.
• In positive and virtuous cultures, rules and compliance are an
expression of the company’s ethical values. (Many firms inadvertently
undermine ability to build positive or virtuous culture by using rules-
based approach of “Do this or else”, or offering rewards for ethical
behavior, transforming them into discretionary, self-enhancing
behavior.
Reserved.

Signs of a Virtuous Ethical Culture
• Zappo’s: asks potential applications to “Please check out the Zappos
Family’s 10 Core Values before applying! They are the heart and soul of
our culture and central to how we do business. If you are ‘fun and a little
weird’—and think the other 9 Core Values fit you too—please take a look
at our openings and find one or two that best fit your skills, experience,
and interest!”
• Griffin Hospital: Online job search instructions begin with a statement
of purpose: “At Griffin Hospital, every employee is a caregiver and every
employee makes a difference. We understand that employee
satisfaction leads to patient satisfaction. Our culture of teamwork,
professionalism and respect makes Griffin Hospital a place where both
patients and employees want to be”.
Reserved.

A (Surprising?) Note about the Ethics and Legal
Compliance…
• If you all you do is strive for legal compliance, you will
probably continue to be at great risk for discrimination,
harassment and other legal liability;
• State/federal/local law and/or regulatory compliance is the
bare minimum. It should be your starting point, not your end
goal;
• If you want to avoid criminal, discriminatory, harassment
or similar issues, you need to aim higher than the bare
minimum. If you aim for the bare minimum, you probably
won’t even get that.
Reserved.

So How Do You Develop an Ethics Program???
• Start with these components:
• Determine your company’s goals and culture and tailor the program
accordingly (In other words, there’s no one-size-fits-all ethics
program);
• Get involvement and buy-in from employees at all levels to
understand goals and culture. Talk to everyone, not just senior
management. (Senior management doesn’t always talk with staff).
Encourage an environment in which people at all levels can speak
frankly. At this point a key goal should be convincing people that
high ethical standards make them better at what they do and make
the company a better place to work.
• Have a go-to person that acts as a facilitator (not a dictator).
Reserved.

So How Do You Develop an Ethics Program???,
cont’d
• Research the program elements your company needs and create a code to live and work
by. Consider one or both of the following types:
• Enforceable rules of conduct that, if violated carry consequences. Usually narrowly
drafted, like regulations. Goal: to deter certain types of behavior/activities;
• Set of values or principles, usually stated in positive terms, that employees should
strive to live by.
• Which code should you use? Depends on what you’re trying to accomplish. Use focus
groups to help here
• Consider including the following:
• Ethics and compliance officer (can be an existing employee who takes on the role
part-time in addition to current role);
• Policies and procedures around key issues your employees face;
• Means for employees to confidentially report concerns about suspected ethical
violations without fear of any type of retaliation.
Reserved.

So How Do You Develop an Ethics Program???,
cont’d
• Integrate Ethics Into Your Company Culture:
• Provide ongoing training, that emphasizes learning to think about ethical
aspects of daily work life;
• Use case studies from your own workplace (scrub specific identifying info) so
people find it relatable and don’t assume “It can’t happen here” or “It
can’t/won’t happen to me”.
• Examples: a) Include questions as to how staffers’ long lunches affects your
ethical code; b) company’s work in countries where bribes are the usual way of
doing business.
• Don’t be afraid to blend the philosophical with the concretely practical.
• Ensure that the CEO (and all Senior Management) makes ethics a priority;
CEO’s and senior management’s actions speak the loudest, especially when
they model ethical behavior.
Reserved.

How Do You Deal with Lapses?
Starting points
•Reviewing all applicable laws (i.e. determine the “bare minimum”)
•Review your own policies and practices. How do you say you will deal with the particular issue
and how have you done so in the past?
•Do you have a confidential hotline or similarly is there a means for confidentially reporting
suspected lapses?
•Do you have policies to ensure that those reporting suspected lapses do not experience
retaliation and do you consistently enforce those policies?
•Take all reports seriously and conduct a prompt and thorough investigation;
•Stay in touch with those who report suspected lapses, ask if they need anything further from you.
Assure them that the matter is being investigated and addressed even if you cannot tell them
details.
•Take all steps that are allowed under applicable law and appropriate to ensure confidentiality.
Reserved.

Sample Ethical Lapses and Possible Solutions
Employee Conducting Personal Business on Company Time can include setting up doctor's
appointments on company phone lines, making vacation reservations using their employer's
computers and Internet connections or even making phone calls for a freelance side business
while on company time.
What can you do?
•Consult your Code of Ethics;
•While this is an abuse of company time/ethics, look for/look at shades of grey and
determine how you will deal with them.
•Company needs to decide what’s an actionable abuse of company time/resources.
• How will you deal with actionable abuse of time/resources? Determine your objective.
•Is this a “first offense”?
•Who is hurt and how?
•Possibilities: staff meeting with example scrubbed of personal identifying info. Discuss
possible disciplinary actions and the reasons.
•Do you provide breaks during the day when these types of activities can take place?
•Do you have any flexibility if an employee has a personal matter and needs to take a
personal call during work hours;
Reserved.

cont’d
Personal Business on Company Time – working second job or running
side business:
What can you do?
•Code of Ethics should in most cases forbid this type of activity
•Decide in advance what the consequences will be:
•Will you give oral warnings first?
•Written warnings?
•Suspensions?
•Termination?
Reserved.

cont’d
Taking Credit for Others’ Work: e.g. three members of a five-person team did all the
work, do those three members demand to receive proper credit while pointing out that
two members of the team did not pull their weight?
•If employees single out their co-workers in a negative light, it could foment resentment,
BUT
•The same thing could happen, if all employees accept equal praise even though only a
select few did the real work
What can you do?
•In a team situation, have each member do a specific task;
•Encourage partnering with others and giving proper credit for any help received;
•Emphasize the importance of building and maintaining trust and the impact of eroding
trust.
Reserved.

cont’d
Harassing or Bullying Behavior: can include mental, sexual or physical harassment
or bullying or other similarly abusive behavior.
Note that per the EEOC, to be harassment, behavior has to be “hostile, intimidating or
embarrassing to most reasonable people”. Usually a single incident won’t be
harassment, BUT
Even if the behavior doesn’t meet the legal definition of harassment, it could be bullying,
and it could escalate if not addressed.
Some options:
•Confidential reporting with assurances of no retaliation;
•Ensuring that no one in a position to retaliate will do so;
•If the alleged behavior is harassment then follow your policies;
•If the behavior is questionable, speak with both parties separately, and, if appropriate,
tactfully inquire if s/he may be experiencing some issues and if you can help. (e.g. “We
noticed you don’t seem yourself lately. Is everything OK? Can I help with anything?”)
•Does your company offer an EAP? If so, consider referral.
Reserved.

cont’d
Stealing on the job: includes embezzling, includes taking
confidential information that might be trade secrets, and can also
include helping oneself to company supplies. An accumulation of
missing items can affect the bottom line, just as embezzling or taking
larger items.
What to do?
As with abuse of company time/resources, determine what is and
is not actionable – and make sure you clearly state that to your
employees – then follow up.
Reserved.

cont’d
Padded expense reports or other expense reporting issues;
Possible solutions: revisit the expense forms or your system for reporting
expenses. Some companies make expense reporting so complicated that
employees make things up to get the forms filled out. Could your company be
unwittingly incentivizing employees to commit violations?
Employee has called out sick twice in the last month and you believe s/he
wasn’t really sick.
What can you do? See if some part of your company culture could be contributing
to the problem. Could there be a harassment or bullying situation going on? Could
there be an employee relations issue between the employee and her supervisor?
Sometimes there’s an underlying problem, that, once addressed can also
eliminate the surface problem.
Reserved.

Listen to (and to the extent appropriate) investigate all complaints:
•If employees feel you aren’t taking them seriously, they won’t report
concerns to you;
•Do a prompt and thorough investigation, and document everything;
•Consult your Code of Ethics, and review applicable laws;
•Decide when you might outsource an investigation (maybe the usual in-
house investigator is the one accused or has biased relationship with the
complaining employee);
•Have a confidential hotline or other complaint procedure;
•Ensure non-retaliation;
Ethical Lapses – General Approach
Reserved.

Who’s monitoring the monitor?
•Remember that high-level employees are often in the best position to
commit ethical breaches (and may be most vulnerable if under pressure to
produce);
•Consider rotating ethical compliance duties among different senior staff;
•Consider random “check-ups”;
•Example: In August 2018 2 lunches ladies running cafeterias in New
Canaan CT were arrested for allegedly pocketing just under half a million
dollars from the cash registers over 5 years. Allegedly they told workers not
to count the daily cash receipts but to leave it to them to count.
General Approaches to Ethics Issues
Reserved.

• Get the big picture: Rather than focusing on the one person who committed
the ethical lapse, see if/how the overall culture/system/leadership may have
contributed to the behavior;
• Analyze your business processes, determine your company’s highest risk
areas and which processes directly affect your company’s good will e.g. HR
policies and their implementation, e.g., Reward systems; Hiring and
retention; Performance management and evaluation; Promotion decisions-
make sure you don’t inadvertently create a breeding ground for ethical/legal
issues;
• Beware of incentives that may unintentionally encourage unethical behavior
(e.g. contests that encourage managers to bring in contracts by any means
necessary, might encourage kickback schemes.)
General Approaches to Ethics Issues
Reserved.

• Other possibilities:
• Accounting software to track cash flow and inventory;
• Time and billing software to track workers hours and what is
billed to customers/clients, what’s collected, etc.
• Restrict access to sensitive company information and to
employees’ sensitive personal information;
• Frame the issue around creating, building, maintaining trust –and
the impact of breach.
• Surveillance? Use sparingly.
• Pre-employment screening: behavior-based interviewing, look for
fit with company culture subject to applicable state/fed’l anti-
discrimination laws;
• Hire managers with actual managerial skills (or provide adequate
managerial training– and emphasize ethics and company values.
General Approaches to Ethics Issues, cont’d
Reserved.

• Best way handle ethical lapses is to prevent them before they
happen;
How do you do that?
• Be proactive, using some of the tips in the previous slides;
• Promote a strong ethics culture by:
• Talk about the importance of ethics.
• Keep employees adequately informed about issues that impact them.
• Uphold promises and commitments to employees and stakeholders.
• Acknowledge and reward ethical conduct.
• Hold accountable those who violate standards, especially leaders.
• Model ethical conduct both professionally and personally.
Best Overall Approach to Handling/Avoiding
Ethical Lapses
Reserved.

2 Key Points to Remember:
1.Character is paramount. Ethical leaders show integrity in all their
relationships – work and personal. Because of the internet and social
media, private behavior often becomes public knowledge, shaping
employees’ beliefs about what kind of individuals their leaders are.
2.Leadership happens at all levels. While senior leaders set the tone for
the entire organization, supervisors shape the everyday environments in
which employees work and make decisions. The actions of supervisor
have a profound impact on employees and their workplace conduct.
Best Overall Approach to Handling/Avoiding
Ethical Lapses- About Modeling Ethical
Behavior…
Reserved.

• First, remember that in ethical workplaces, ethical crises can still
occur;
• Recognize the ethical issues at the moment of crisis, and recognize
the “teachable moment”;
• Act in accordance with your company’s ethical code and values;
• Hold the responsible people accountable;
• Hold leadership accountable for any way it may have inadvertently
contributed to the issue at hand;
• Communicate with staff.
Final Points – When Crises Do Occur…
Reserved.

Questions, Comments,
Thoughts?????
image from freemortgageaudit.net

Thank-you for participating
Contact Janette Levey Frisch, Esq., (732) 902-0728
janette@theemplawyerologist.com
www.theemplawyerologist.com
@JLeveyFrisch
Contact i-Sight
j.gerard@i-sight.com
Find more free webinars:
http://www.i-sight.com/resources/webinars
@isightsoftware

Workplace Ethics: How to Tackle the Small Lapses and Avoid a Company Crisis

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