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The DOJ Strikes On Companies To Report Employee Misconduct.pdf (69.34 kB)

The DOJ Strikes On Companies To Report Employee Misconduct

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posted on 2023-07-28, 18:32 authored by Rachel Zelicof

Biden’s Plan for Transparency: The DOJ (Department of Justice) recently announced that it is incentivizing companies to report employee misconduct to promote transparency among the corporate business world. Biden has been working to curb corporate crime and foster more transparency among corporate culture. The benefit to this policy proposal is that companies will receive less severe penalties. However, the DOJ doesn’t seem to have considered the implications of the incentive such as how the company will demonstrate liability after a more flexible penalty. [1]

Legal Precedents: One interesting legal precedent that covers employee misconduct is Smith v. Employment Division, Department of Human Resources of Oregon (1990). Smith engaged with the drug peyote during a religious ceremony under a Native American Church. Smith was a counselor for a rehabilitation organization. The employer fired Smith which then prompted Smith to file for unemployment benefits. However, the state refused to acknowledge Smith’s claim since it was considered to be employee misconduct. [2]

If this case were to be applied to the DOJ’s new policy, would the penalty be less severe for Smith? Or perhaps, would the decision have come out differently? These are important questions that we must take into consideration when implementing this new rule. We must be sagacious and try to understand how the new rule could cause ripple effects in our judicial system. This could mean that penalties become less severe which would make it more challenging to hold employees accountable for their actions. The DOJ is ultimately trying to provide incentive for corporate companies to be more transparent, however, this may be at the cost of justice and fairness.

A more current case that we could apply the DOJ’s new policy to is the misconduct that Wells Fargo Employees were responsible for in 2022. The Consumer Financial Protection Bureau ordered Wells Fargo to pay more than $2 billion to consumers and $1.7 billion in legal violations. [3] Employees illegally charged surprise overdraft fees, denied mortgage modifications, and froze consumer accounts. [3] If the DOJ’s new policy applied to this case, would it mean that Wells Fargo would pay less in damages to its consumers since the employee misconduct was publicly reported? Also, would it even be justified for Wells Fargo to pay less in damages to its clients?

Implications: It is essential to recognize that this policy lacks clarity. It doesn’t explain how employees will still be held accountable for their actions. If the penalties are less severe does this justify holding employees less accountable for their actions? Also, would it be more important to be transparent with the public or hold employees accountable for their actions with proper judicial evaluation?

It is necessary that the DOJ reevaluate its position on this policy incentive. There are also concerns when considering if employee matters should be kept private from the public. Would employees want their information to be shared for millions of people to see? Probably not. Thus, it ultimately comes down to honoring the privacy rights of employees even if they engaged in misconduct. Consequently, it is imperative that the DOJ reexamine its policy for justifiability and fairness.



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