Question

In: Finance

Do we have a duty of loyalty to our employer(s)? Drawing on at least two of...

Do we have a duty of loyalty to our employer(s)? Drawing on at least two of the readings from Chapter 10, explain why or why not, being sure to support your conclusion with reasoned argument. If we do have a duty of loyalty, what kinds of actions does this duty make it unethical to perform (e.g., whistleblowing)? Explain why. What criticism(s) might someone raise against your view/conclusion? What argument(s) would you offer in response?

Solutions

Expert Solution

Yes, we do have a duty of loyalty to our employer. An employee is an agent of the employer (who is the principal) and as such employees are required to act in a manner that is best for the employer’s interests and is not contrary to the employer’s interests. The duty of loyalty is, in a way, related to the degree of trust and responsibility that an employer gives to its employees. The higher is the level of trust and responsibility the higher will be the level of duty of loyalty that an employee will have towards the employer.

If an employee does have a duty of loyalty then the kind of actions that will be unethical to perform are:

  • Leaking confidential information and proprietary information of the employer
  • Competing with the employer by starting similar business
  • Diverting business to a competitor or helping a competitor

These actions will be against the interest of the company and in fact will harm the company’s interests and prospects. As such these activities will be unethical to perform by an employee.

The criticism that someone may raise against my view is that an employee does not have an absolute duty of loyalty and that this duty can be flexible as well as situational depending on the standards, conducts and ethical stands of the employer.

The argument that I will offer in response is that an employee should deviate from his/her duty of responsibility only when the employer is wrong and has done something that is either unethical or is illegal. Otherwise employees have no reason to harm the interests of their employers.


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