Lou Sinclair, the owner, operator, and CEO of the Sinclair Security Firm, Inc., has over the last few years become increasingly concerned about the amount of workers’ compensation that he must pay to the state of Winnemac in order to cover his employees. Most of his workers are security agents who are engaged in field work and rarely report in person to the office. In an economic move to cut costs, Sinclair orders Hal Kellogg, his human resources director, to restructure the contract of all field agents so that they are called “independent contractors” rather than “employees.” Wary of this tactic, Kellogg takes a detailed look at the Winnemac state statute on workers’ compensation. In his view the statute is flexible enough to permit Sinclair’s scheme to work with a minimum of legal exposure. As a result, he complies with Sinclair’s order and revamps every agent’s contract. As word filters out to other security firms, this practice becomes an industrywide strategy. Senator Winston Arrowsmith, a member of the Winnemac state legislature, gets wind of this tactic and introduces a bill into the state senate that will reform the worker compensation law, expanding the definition of employee to such an extent that it actually includes workers who really are independent contractors. Arrowsmith justifies this move by saying that the security firms have gotten away with violating the original law so much that it serves them right to now have to pay for workers who really are ICs. Consider these questions: 

(1) Was Sinclair’s original plan ethical? 

(2) Does the information uncovered by Kellogg on the original law make the original decision by Sinclair ethical? 

(3) Is Arrowsmith’s plan to punish the security firms ethical? Make sure you give reasons for your answers here.