As an engineer, I developed a good working relationship with subordinates (who were union members) by earning their respect and trust over time. I told them that I would always be upfront and honest with them… In one instance I was scoping out a capital project that was very attractive to management because it had a really nice ROI. While the capital costs were large, this project would save the company over $800,000 annually through staff elimination. At one point I was measuring the location layout when a few employees approached me and asked what I was doing. I explained that we were looking to replace several old manual machines with a new fully automated system. One worker asked me if this project would eliminate any positions (specifically his position). I had to lie and say that no, management was just looking to free up employees to do “more value-added tasks.” Although I was uncertain the project would be approved, it would undoubtedly eliminate 8 positions if implemented. However, there was simply no way I could release that information. This was 2008, when the economy was performing poorly, layoffs were prevalent, and unions were on edge. If I told the employees that the main goal of this project was to eliminate their jobs, not only would there have been some sort of mutiny, but I’m pretty certain management would have fired me for divulging that confidential information. Was it unethical for me to lie to protect my job and the company from a hostile situation?

Contributed by Adam

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About John Hooker

T. Jerome Holleran Professor of Business Ethics and Social Responsibility Tepper School of Business Carnegie Mellon University

4 responses »

  1. Anoop says:

    Adam, my personal reaction to your situation had I been in your shoes would have matched your actions exactly but evaluating your actions under the frameworks we’ve learned in class may lead to a different conclusion. The situation was complicated because you had an obligation or promise to two parties, one to the company as a whole to identify capital projects that would provide high returns and another to the union workers who you had promised to be upfront and honest with. Under the generalization principle, I believe your action of breaking your promise to the union workers to be forthright was unethical. The fact of the matter is you made a commitment to always be honest with this group, and the act of breaking this commitment undermines the point of a commitment. If everyone who made a promise or commitment chose to break the promise for personal benefit, the reasoning behind a promise would dissolve. On the other hand, you maintained your obligation to your bosses and management to keep the information confidential, which I am assuming you were directed to do. Perhaps a better more ethical response would have been to ask the union employees to direct their questions to management. However, I think under the utilitarian principle your actions are validated. Revealing the information would have not only potentially led to your firing, but it also would have increased tensions between management and the union while delaying the capital project, which would have benefited stockholders, from going forward. By withholding the information, you eliminated the risk to your job and allowed the capital project to go forward and thus created more utility for the company as a whole. Additionally, you provided the opportunity to management to explain the reasoning behind their situation to union heads in a formal matter, a course that would likely alleviate the potential backlash from layoffs as compared to a situation where the information was released to the union-workers in an informal manner. By withholding the information, you created more utility overall. Evaluating the situation with virtue ethics leads to more questions than answers for me. In terms of loyalty, where should your loyalty lie to a greater degree, the company or the union workers to which you made a commitment to be forthright? Were your honor and integrity compromised by withholding the information? All in all, you were put in a very difficult situation that was further complicated by the external economic environment.


  2. Amran says:

    The key to this dilemma revolves around the basis for your reasons. If your reason for not divulging the information to your subordinate was to prevent unrest among the union, then my analysis concludes that your actions pass the generalization test. If every person in a managerial position possessed sensitive information but chose not share it, the subordinates may lose faith in him as an honest leader, but they will not necessarily become hostile or refuse to work. In this case, withholding the information passes the generalization test because every person in the same position would undertake the same action and the reason would still be justified.

    Furthermore, your action also passes the utilitarian test. By telling the truth in this case, the information would likely cause union hostilities and a work stoppage. This would cause a much larger drop in net utility throughout the company than the loss of utility experienced by the eight workers who were laid off. By lying directly to your colleague, you have chosen a path that minimizes the net utility loss and is therefore ethical.

    Finally, your action is more uncertain when faced with the Virtue Ethics test. On one hand, directly lying to your coworker is not a reflection of your beliefs, since you prided yourself on building trust with them and respecting them. They expected that you would be honest with them as well. On the other hand, your action sought to minimize the total net pain/suffering experienced by the sum of your coworkers and the company as a whole and this action therefore meshes well with your value system. Since your reason for lying was to prevent hostilities that might ultimately have caused significant stress on your organization, you have acted ethically and in accordance with who you are.

    Given this analysis, I conclude that your actions were indeed ethical and rational.


  3. Jason says:

    @Amran and Adam
    I agree with Amran’s analysis and application of the Generalization Test. Where I find these ethical dilemmas interesting is when people try to apply the Utilitarian Test in the consideration of one doing something that would surely cause himself dis-utility. First of all–in much the same way your dilemma involved–I feel like it the uncertainty over whether the eight employees will be fired versus the probability that you will get fired, should matter. When I put myself in your shoes, I imagine I would rationalize to myself that since I cannot cause these eight workers to be fired nor prevent their firing, but since I can control whether I get fired or whether the union is put into upheaval mode, I should factor into my decision, less, my loyalty to these eight coworkers. The factors I consider in my decision-making process, therefore, should be weighted according to the degree to which they are under my control.

    So, when computing, for example, the net change in utility caused by my getting fired and one of my colleagues keeping their job, I feel like I am being less ethical by hurting myself rather than hurting someone else. And this is not because I think I am inherently more valuable than someone else. Rather I am thinking it is unethical to mistreat yourself. It shows lack of appreciation for the life you have been given. Then again, it is about odds and probability, right…


  4. John Hooker says:

    As Amran points out, lying for certain reasons can be generalizable. A famous example is Anne Frank’s family, which hid in her father’s Amsterdam office building while being sought by Nazis. A few office workers knew about the secret rooms, but when the police asked them about the Franks’ whereabouts, they lied and said they didn’t know. Lies are normally ungeneralizable because if they were generalized, no one would believe them. Here, however, the lie can serve its purpose even if no one believes it. The purpose is to withhold information about the Franks’ whereabouts. If everyone lied to the police in such cases, the police would know everyone is lying, but they still wouldn’t get the information they want.

    You might argue that your purpose in lying to workers is merely to withhold information about layoffs and avoid trouble with the unions. The workers don’t necessarily have to believe your lies.

    First you have to make sure that you can really achieve your purpose if the workers don’t give your statements any credence. If not, then lying about them is ungeneralizable.

    Supposing your lies need not be believed to achieve their purpose, we have to ask whether they could achieve their purpose if managers always lied in such cases. They might, if managers communicated with workers only on the matter of layoffs. However, they must have credibility with workers on a range of topics. If managers were always dishonest about layoffs, they may lose credibility and goodwill in general, which could create the very problems they want to avoid.

    This is not a clear case. Perhaps if your industry can tolerate a strained relationship with workers, companies would be able to keep peace with the unions by routinely sending around meaningless memos that deny any plans for layoffs.

    Another problem is your intention to develop a relationship of respect and trust with workers. Lying to them betrays this relationship and is therefore inconsistent with virtue ethics.

    So to be ethical in denying layoff plans, at the very least you would have to take care to maintain personal distance from employees and communicate through formal memos and the like.

    A better option is to say, “The company doesn’t allow me to talk about future plans.” This escapes generalizability problems because it’s true and doesn’t mislead. It may harm the relationship, although not necessarily, because the workers know what you are up against. In any case, it doesn’t betray the relationship and so is consistent with virtue ethics.

    Your failure to deny layoff plans could raise suspicions that lead to trouble and reduced utility. But the relevant test is whether this kind of trouble is worse than the expected disutility of sudden layoffs that give workers no chance to prepare. If there is no rational way to judge this, your refusal to talk passes the utilitarian test by default.

    I conclude that the ethical option is to tell the workers that you are not at liberty to discuss company plans, and perhaps make sure they understand that your job is at risk if you do.


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