Question

Scenario 2: Administrative Agencies and Ethics

Brian Day is the vice president of new technology development at Future Electronics in Southaven Mississippi. One year ago, he filed an application with the Federal Communications Commission to obtain approval for a new device using satellite technology. Brian met Jenice Brown at an electronics convention two months ago and invited her to his room at the hotel. The two parted ways. Brown worked as the director for licensing approval of new products at the FCC. Two weeks later, Brown wrote Day a letter on FCC letterhead stating, “It was nice to see your name cross my desk on your company’s application for approval of the new satellite device. I’d really like to see you again. Why don’t you come visit me in Washington this weekend?”

Day considered requesting that the petition be referred to another director at the FCC. However, he is concerned that the transfer would delay the approval process for at least a year. Day’s chief engineer advised that a key competitor plans to introduce a similar device on the market in three months.

Are there any legal or ethical barriers to relationships between corporate officers and members of administrative agencies involved in reviewing or regulating corporate activity?

What should Day do?   

What would you advise Day to do if you were head of human resources or legal counsel for Future Electronics?

Answer 1

Yes, there are legal and ethical barriers to relationships between corporate officers and members of administrative agencies involved in reviewing or regulating corporate activity because relationships may actually affect the decision of the department based on the statement of a member of the administrative agency so legally the relationship should not be used in the process of approval and ethically also this is not right because this is kind of a preference or bias that is created.

At present she cannot do anything rather than wait of the decision and if the decision is not as per what she expects and if she believes that it is because of the relationship that they possess then she should actually work this up to the higher management of FDA for clarification of the rejection.

As the head of HR I would have actually advised her not to reply to Joe Spencer and keep the message as a document for the time being and anything from him should be saved which my actually be used if the application is rejected based on the relationship. These documents can then be used as proof against Joe.