Business Week Article Review: Wal Mart Ethics Case

This is the second article of three related to a case of whistle-blowing within the Wal-Mart organization. The first reports that Chalace Lowry, an administrative assistant to a vice president for communications, was asked to copy some papers she thought was related to stocks. When Wal-Mart announced a $15 billion stock buyback shortly thereafter, she was concerned about the possibility that Williams had exercised stock options before the announcement. Lowery filed a complaint with the ethics department who cleared Williams the same day the report was filed.

Soon after, Lowry was identified as the whistleblower to Williams. There was conflict as to whether the disclosure was voluntary or not. Because of the conflict, Lowry felt she could no longer work in the communications department and sought a transfer. She was apparently told she has 60-90 days to find a new position before they would "discuss her next steps". This second article reports that Lowry finally did find another position within the company after much stress and worry.

The first and most obvious ethical topic in this series of articles is that of whistle-blowing. By all appearances, Wal-Mart had taken all steps to ensure that a proper whistle-blowing policy was in place. The policy was well communicated and the mechanism was in place to report ethical violations.

I question whether Lowry was justified in blowing the whistle in this case. The textbook lists one of the conditions of justified whistle-blowing as having all the facts to properly understand their significance. Because Lowry admits herself that she wasn't certain there was any wrongdoing, there are doubts even in her mind. Let me make the distinction that I recognize that the level of understanding one should have is hard to define, and any error should be on the side of reporting the suspected ethical breach. However, Lowry reports that she was given some papers to copy that appeared to be stock-related and later learned that Williams exercised stock options before a stock buyback was announced.

While the situation was of moral significance to warrant whistle-blowing and Lowry used the proper channels for reporting, she did not understand what was going on at all and made a rash decision. The text goes on to say that the claim should be backed by strong evidence that would stand up under scrutiny in court, not merely hunches. Clearly, a glimpse of a document and the buyback announcement amounted to nothing more than a hunch.

The next issue is Wal-Mart's handling of the matter. It is in conflict whether or not Lowry consented to having her name released. I fail to understand why Lowry would consent to this because, had she not wanted to remain anonymous, she wouldn't have used a hotline to make the report. Breaching the confidentiality of a whistle-blower justified or not, is a serious ethical breach and a violation of whistle-blowing policies. The policy is in place to provide a safe place for employees to report activities. If employees don't feel safe reporting through the designated channels they will either look the other way or use other channels, such as the media. Either of these alternatives will damage the company.

It's important for employees to feel confident that they can report such issues without fear of retaliation. In this case, Lowry felt her work environment had changed such that she had to find another job within the company. Whether this is just awkwardness associated with her wrongful accusation, or if there was some type of retaliation, this should have never been an issue-she should have remained anonymous. The ensuing OSHA complaint is further evidence that an employer must be diligent in providing a safe environment for whistle-blowers, in the interests of all stakeholders, the company included.

This was a very interesting article with a variety of ethical topics. I look forward do any comments.