Philosophy 223

1. Philosophy 223 Ethical Treatment of Employees: Hiring and Firing

2. The Right to Work? • As we noted in our discussion of rights based theories, talk of rights is an important element of the moral and ethical analysis of the employment relationship. • While the set of rights that it is reasonable to consider will occupy our attention up to Fall Break, today we are going to focus our attention on a basic one: the right to work.

3. Denying the Right to Work:Employment at Will • Employment at Will emerges from common law. • Asserts that in the absence of specific law or contract, employers have the right to hire, promote, demote, and fire whomever and whenever they please. • Also asserts that employees have parallel rights: quit whenever they please. • Employment at Will is the principle that governs the employment of 50-60% of the private workforce. • Only public employees are uniformly exempted. • EaW does not contradict EEOC regulations: i.e. discrimination based on sex, race, religion, nationality, etc.

4. Employment at Will: Equal Rights? • The strongest ethical justification for EaW is based on the apparent equality of the employment relationship. • Is the relationship really a reciprocal one? • The courts clearly don’t think so. • Laws constraining the employment relationship in favor of the employee greatly outnumber those in favor of the employer. • Who is most vulnerable?

5. Other Justifications for EaW • When an employee takes a job they voluntarily commit themselves to the terms of that job, including the knowledge that they are an “at-will” employee • A system of due process will interfere with efficiency and productivity of corporations • Legislation or regulation will undermine an already overregulated economy

6. Criticisms of EaW • Firing an employee without providing good reasons treats them like a piece of machinery and does not show them the respect they are due as persons. • Loyalty, trust, and respect are expected of employees, thus, reciprocal obligations are entailed by employers. • It is not clear that due process will necessarily entail increased costs and decreased efficiency. • The right to due process that employees in the public sector enjoy is grounded in the property rights of workers in their employment. • Permanent workers are entitled to their jobs unless they show poor work habits. • Being fired can often cause substantial damage to an employee including making it difficult and sometimes impossible to find new employment.

7. An Alternative: Due Process • Due Process also has its roots in Common Law. • Magna Carta: limits to the arbitrary authority of the king. • Due Process rights protect individuals from the arbitrary uses of authority. • Based in the principle that even legitimate authority requires justification for its employment.

8. Due Process In the Workplace • When the principle of Due Process is applied in the workplace, it typically takes one of two forms: • Substantive: right to demand a rationale/reasons for decision. Typically takes the form of a procedure that must be followed in making employment decisions. • Procedural: right to mechanisms to dispute decisions.Examples include written standards, appeal process, and established disciplinary practices.

9. Justifications for Due Process • Arguments in favor of due process rights typically invoke the principles of justice and fairness. • Application of these principles typically refers to a distinction between power and authority. • Power in this context is the ability to impose one’s will on another. • Authority refers to situations when the exercise of power is legitimate. • The use of power without authority violates standards of justice and fairness. To the extent that Due Process guarantees that power is used with authority, it is justified by those standards.

10. Criticisms of Due Process • Critics of Due Process have raised four concerns. • Freedom: imposition of due process rights violates the freedom of participants in the employment market. • Fairness: due process imposes burdens on the participants in the employment market. • Property Rights: due process illegitimately restricts the property rights of business owners. • Efficiency: due process lessens the efficiency of our economic institutions.

11. Participation Rights • The focus on legitimate uses of power in the discussion of Due Process raises another question: • Where does the authority of business owners and managers come from? • Perhaps we should ask, “Where does the authority of our political leaders come from?” • Implications of the analogy?

12. Participation Rights: Workplace Democracy • Is the analogy to our political context appropriate? • Both are significant social institutions with coercive power; in both, power arises from ability to grant or deny important goods; in both, institutional roles specify who has the power. • If the analogy fits, then there seems to be good reason to conclude that authority arises in business in way analogous to politics: consent of the governed.

13. Advantages of Workplace Democracy • Makes work more fulfilling. • Encourages self-respect. • Improves morale. • Encourages participation in other public institutions.

14. Epstein “In Defense” • Epstein examines the justifications for contract (employment) at will. • Providing a primarily utilitarian defense of EAW, Epstein concludes that EAW is morally justified on these grounds.

15. The Argument from Fairness • Fairness • Freedom of contract is a basic liberty akin to our freedom to choose marriage partners or religion • It is an unacceptable violation of that freedom for government to interfere with our ability to create our own contracts • If terms are unacceptable then that is the responsibility of that party since he freely entered into the employment relationship, yet both retain the freedom to leave the relationship at any time.

16. The Argument from Utility • For employers • Monitoring—Discourages theft, encourages productivity • Administrative costs – cheaper to merely fire someone than having a process in place • Imperfect information – no way to be certain an employee will fit when you hire them • For employees • Imperfect information • Mobility – easier to explore alternative employment options • Both sides • Reputational losses – the risk of reputational losses discourages abuses of the system

17. The Argument from Distribution • With regard to the principle of distributive justice, Epstein argues that there is no clear way to show that banning EAW will lead to a more fair or just redistribution of wealth. • Given what we talked about last time, we might ask in response if there’s any reason to believe it wouldn’t?