1. Let’s begin this week with a reminder of a fundamental legal duty an agent owes a principal as a fiduciary. A fiduciary is a person having a legal duty that is created by voluntarily undertaking the responsibility to act primarily for the benefit of another in matters connected with the undertaking (e.g. a Trustee of property held in a trust for beneficiaries, like children). In a prior class, some students raised the issue of an employee’s 401k and asked whether this imposed a fiduciary duty on the employer. It does, but it’s in the capacity of a Trustee for that financial matter. This duty does not go further to encompass a fiduciary duty to employees in matters of the employment relationship.A relationship founded on trust and confidence. Legally recognized obligations imposed for the benefit of the business. 
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3. Contrary to a common-held belief (hope?), an employer does NOT owe a fiduciary duty to the employees. Still, the employees do owe a fiduciary duty to the employer. Fiduciary Duties owed to the business (employer) by the employee: Keep in mind that the duties owed by the employee are to the business and not the CEO; the executives (who also owe fiduciary duties to the business), who are often termed ‘employers,’ are simply the instruments by which the well-being of the business is assured by the fulfillment of fiduciary duties imposed on employees. Traditionally, fiduciary duties have included: 
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5. Duty of care requires that directors exercise the care ‘ordinarily careful men would use in similar circumstances, considering all material information reasonably available. Deficiencies in the process are actionable only if the actions are grossly negligent ‘ that is, if the conduct shows ‘reckless indifference to or a deliberate disregard of the whole body of stockholders or actions which are ‘without the bounds of reason.
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7. ’’ Examples: obey instructions (even stupid ones!); act with competence and diligence; provide information. Duty of loyalty requires that directors refrain from using their position of trust and confidence to further their private interests. 
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9. In other words, the duty of loyalty mandates that the best interests of the corporation and its shareholders take precedence over any interest possessed by a director officer or controlling shareholder and not shared by the stockholders generally. Examples: No usurpation of a business opportunity; a conflict of interest that benefits the employee to the detriment of the business; non-compete clauses; keep confidences; and keep accurate records and accounts (don’t co-mingle employer’s assets with personal assets or hold out employer’s property as one’s own). Duty of good faith requires honesty of purpose and fair dealing. Grounded in the knowledge of that legal duty, consider how one might demonstrate an ethical duty of care.
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11. In his book Business Ethics: Concepts and Cases, Velasquez (2012) discusses the duty of care as an ethic that requires caring for the concrete well-being of those particular persons with whom we have valuable close relationships, particularly those dependent on us. He’s talking about your employees. That duty must co-exist with your legal fiduciary duty to the principal of the company. 
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13. As a fiduciary, you owe the company your loyalty. You have no legal duty of loyalty to your employees. Again, you face the dilemma of balancing two concurrent and oftentimes conflicting duties. This raises a fundamental question: What is the nature and scope of ‘care’ you are ethically obligated to give your employees?
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15. Discuss the following questions:
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17. What is the nature and scope of ‘care’ you are ethically obligated to give your employees? Specifically, what are the characteristics of that duty? To what extent should you ‘care’ about your employees? Use at least two examples to clarify and justify your point of view. 
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19. NOTE: Yes, the principal has a legal duty to provide a reasonably safe workplace. Don’t focus on such legal obligations. Instead, answer the question: is there an ethical duty beyond the required legal duty? Does the nature and scope of care change when your agent is not an employee but an independent contractor? Why? Why not?
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21. How will you respond when that ethical duty conflicts with your legal duty to care for the principal? Describe a specific workplace conflict to illustrate your point.

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The nature and scope of the ethical duty to care for employees involve considerations beyond the legal obligations Ethical care goes beyond the minimu... View the full answer