1. Evaluation of International Widget Code of ethics. International Widget has developed very clear code of Ethics to guide all its staff members. Among the areas of emphasis is the essence of confidentiality. The organization has made it clear that all clients’ information will be treated with high level of confidentiality. It further provides that ethics will be upheld in conducting business with all the clients and suppliers. In addition, the organization has committed itself to observe ‘duty of care’ in all its actions. More importantly, the organization has outlined that all employees should desist from any activity that causes conflicts of interest. It further commits itself to deliver quality service to its clients while maintaining professional conduct. All the employees are required to act with integrity. Additionally, the code specifies that the organization will maintain equality and nobody will be discriminated on any ground.
It is apparent that some of the provisions of the code of Ethics prohibit John’s behavior. To begin with, John is in breach of provision on conflict of interest. The codes clearly outlines that all staff should avoid any activity that will cause conflict of interest. By engaging in business with competitor, John is doing exactly contrary to the provisions of Code of ethics.
In addition, John also has divulged International Widget client’s information to a competitor. This action is directly prohibited by the Code of Ethics provision on confidentiality.
John is also acting contrary to provisions of ‘professional conduct’. His action portrays lack of integrity as it is influenced by personal greed and not in the interest of the employer provided by the codes of ethics
2. Legal avenues that International Widgets could pursue against John and the competitor
Yes, International Widget can seek legal redress to this issue. According to the provision under 29 CFR 458.33 of United States Labor Laws, conflicts of interest are prohibited. Sub-part 2b of the laws provides that no officer or agent may engage in any activity or business that is contrary to his fiduciary obligation. John’s case certainly falls within this category of law. International Widget therefore may bring an action against John for breaching of provisions of labor law. It may seek court injunction to stop John from divulging confidential client’s information to the competitors and also sue for damages for loss of loss of the customers due to his actions.
International Widget may also bring an action against the competitor under Common Law Protection of Trade Secret for improperly soliciting for confidential information and using for his interest. Restatement of Torts§ 757, outlines the provision that protect the confidential trade information from unauthorized parties. According to A.H Alavi (2004), customers list is one of the trade secrets that have attracted a lot of litigations. International Widget therefore has discretion of seeking court action against the competitor on this premise.
3. Fiduciary relationship
Yes, John is in a fiduciary relationship with International Widget. This relationship stems from the law of agency. Restatement of Agency §8.01 provides that anyone who accept to act on behalf of another, is subject to general fiduciary principle. The section further clarifies the fiduciary duty as the ‘duty of loyalty’. It is apparent therefore that indeed John owed a fiduciary duty to the organization.
He is an agent of international Widget as per the provision of Restatement of Agency §8.01. He assented to act on behalf of the employer and therefore bound by agency rules.
Duties of an agent of an agent
Duty to act in best interest of the principal- agent is expected to act to the greatest advantage of his principal. He/she is expected to use due diligence and skills within his authority to the best interest of his principal. John is certainly not fulfilling this duty. His actions are not to the best interest of
