I am the vice-president for finance and personnel of a privately owned company that makes precision parts for other manufacturers. Due to an expansion five years ago, the company is heavily in debt at rather high interest rates. Orders have not increased rapidly enough for us to use our enlarged capacity efficiently. By cutting costs in every possible way, we have managed to avoid bankruptcy, but just barely. We are walking a fiscal tightrope; any misstep is likely to put us in serious trouble.
Our employees are not unionized. We have forestalled that by paying them well and treating them right. Recently, however, I have been under a lot of pressure to cut labor costs and have done so, sometimes in ways I do not like. Still, I have tried to be fair in spreading the pain. For instance, I have insisted that the company’s officers give up salary and benefits proportionate to the cuts imposed on other employees. But now I face a serious dilemma.
Yesterday, the first day after the holiday weekend, one of our key workers, Ray, came to my office demanding that we fire a fellow worker, Joe. Both have worked here more than twenty years but they have never gotten along. Last Friday after work they got into a quarrel outside a bar. Ray told me Joe assaulted him and he no longer is willing to run the risk of working in the same place with “such a maniac.” My initial reaction to Ray’s demand was that, since the fight happened somewhere else, it is no concern of ours, and since I have no complaints about Joe’s job performance, I have no reason to discharge him. I also called in Joe to hear his side. He said Ray started the fight, and three other trustworthy employees who were there supported his story. I then told Ray I was not going to discharge Joe. He replied with an ultimatum: Either fire Joe by Friday or that will be his own last day here.
I am quite sure Ray is not making an idle threat. He has had recent offers of other jobs that we considered it worthwhile to match. Still, I do not believe management ever should give in to any employee’s arbitrary demand. Also, while Joe is a less skilled worker, he does everything we ask of him, and losing his job here will be hard on him. He has a family to support and will not easily find a job with comparable pay and benefits. If we were not in such perilous shape financially, I would be happy to tell Ray goodbye. However, he would be very hard to replace, while Joe could be replaced easily and, in fact, would have been laid off by now except that he is a good employee with more seniority than those we have laid off. Moreover, while we were finding Ray’s replacement and breaking him in, we would have to pay overtime to other workers in that section, and the new man inevitably would make a certain number of costly mistakes before mastering the job.
I really am perplexed. Our lawyer foresees no problem if we discharge Joe, but that seems to me obviously unjust. At the same time, considering the serious consequences for the company, taking the risk of losing Ray seems obviously irresponsible. What to do?
This question calls for the application of norms regarding lying and promise keeping, and judgment in accord with the Golden Rule. Even if it becomes clear that the well-being of the company as a whole requires that Joe be dismissed, the questioner must not falsely suggest that he has given cause to be discharged or tell any other lie to placate Ray. Moreover, inasmuch as Joe has been an entirely satisfactory employee for many years, the company has at least implicitly promised him job security. Therefore, if he is dismissed, he has a moral right to a fair severance settlement even if he has no legally enforceable right to ongoing employment. What fairness requires must be determined by considering all the relevant facts and applying the Golden Rule.
Before making a decision, you ought to consider not only the problem of fairness to Joe but all the prospective disadvantages of giving in to Ray’s arbitrary demand. Although he is a twenty-year employee, he plainly cares nothing about the com~pany’s good and is trying to exploit its need for his services to extort compliance with his unjust demand. If you give in, you can expect more demands from him. And since he has no loyalty and his threat to leave is credible, do not count on him to stay even if you meet all his demands. So, even if you dismiss Joe, you must prepare to replace Ray. Moreover, giving in to him will more or less undo your effort to build good employee relations by treating employees right. It will provide a bad example for other disloyal employees and will weaken loyal employees’ confidence in you and the company, perhaps even alienating many of them.
These considerations suggest that you should not give in to Ray’s demand. If you nevertheless judge that you cannot now take the risk of letting him go, you should seek an alternative resolution. One possibility would be to offer him a substantial raise to stay. This would have the advantage of not only motivating him to withdraw his demand for Joe’s dismissal but countering other motives he might have for leaving. You also might be able to change Joe’s work assignment so that the two men will have little or no contact with each other. At the same time, you could begin to get ready to replace Ray as soon as possible.
If neither this proposal nor any other you can think of provides a workable solution, one thing you certainly may not do is fire Joe—that is, not only dismiss him but allege that he deserved it. Your statement of the facts makes it clear that he has done nothing to give cause for dismissing him; therefore, to say or imply that he has, would be to calumniate him, a very grave wrong. Moreover, this wrong probably would make the company legally vulnerable.327 Of course, you need not tell Ray you are not going to fire Joe, and probably he is not interested in the terms under which Joe leaves so long as he does leave. But if this should become an issue, you may not lie about Joe regardless of the consequences—even, for example, if the company’s president ordered you to lie and your own job was at stake.
Can you fairly terminate Joe’s employment in some other way? There would be nothing wrong with offering him an incentive adequate to motivate him to leave voluntarily. But what if you cannot do that? Even if he has no legally enforceable right to his job, his long and faithful service with the company has built up a valuable human relationship and created reasonable expectations on his part that the company will continue to employ him if it can. In view of that bond and those expectations, terminating his employment would be breaking an implicit promise to him. Yet, like the obligation of keeping explicit promises, the duty to keep such an implicit one is not absolute but limited by various conditions, which surely include the need to discharge the employee for the well-being of the company as a whole—the same condition that justifies laying off good and loyal workers. Thus, it seems to me you may terminate Joe’s employment, provided you do that without either lying about him or failing to give him a fair severance settlement. In saying this, I am not telling you to discharge Joe; I am only saying that, if you conclude that the company’s common good requires that he be discharged, you must proceed honestly and must be fair to him.
It would not be fair simply to discharge Joe, since the obligation of the company’s implicit promise to him must be considered in the context of his long and satisfactory service. When promises are unfairly broken, the communion established between the parties by their mutual promises and built up by their faithful cooperation is damaged or destroyed. So, to discharge Joe fairly, you must keep faith with him. In effect, try to see to it that he goes away only sad, rather than justifiably mad, by doing what fairness requires, all things considered, to mitigate the harm he will suffer.
Certainly you not only should give Joe as full and favorable a recommendation as you honestly can, but should make an effort to help him find employment elsewhere—for example, by contacting your counterparts in other companies who might have a job for him. Beyond this, you must consider all the relevant facts, including the following: what he has contributed to the company by long and loyal service; what that contribution has cost him not only in hard work but, perhaps, in other ways, such as forgone opportunities to work elsewhere; what harm, not only monetary but psychological, he and his family will suffer by his being discharged; and what the company’s present and possible future capability is to mitigate that harm. Then you must apply the Golden Rule by asking yourself what you would regard as a reasonable severance settlement if you were in Joe’s place. Not knowing the outcome of that reflection, I cannot say precisely what you should do. But I can offer a few suggestions.
One important harm resulting from Joe’s discharge will be the psychological impact on him and his family. It may be greater if they do not know that he is faultless, that you are acting under constraint, and that you wish to make up to them fairly for discharging him. So, I suggest you meet with Joe and his wife, fully and honestly explain the situation, and invite them to help you work out a plan as satisfactory as possible to them. If you can, for example, you might offer a severance bonus, the temporary continuation at company expense of important benefits such as health insurance, and/or reimbursement of expenses related to job hunting and moving, if that turns out to be necessary. You also might promise Joe that, if and when conditions permit, you will reinstate him in his job with full seniority and other benefits.328
327. At least in some places, even dismissing Joe under the circumstances described would make the company legally vulnerable; but the questioner already received legal advice on that issue, and I presume it was sound.
328. The answer to this question points to a more general norm that should be followed in many similar cases. While promise breaking may be justified, one nevertheless always must keep faith with those to whom the promise was made—that is, do whatever one reasonably can to maintain the bonds of community that are strained by justifiable breaking of promises. Thus, while a business’s common good can require its managers to break various promises—to investors, suppliers, customers, or employees—they should do what they reasonably can to compensate those adversely affected. That is not generosity but a requirement of fairness.