Truthtelling in the Workplace

Financial Statements Must Tell the Truth

A prime example of the role of truthtelling in the workplace is the preparation of financial statements by businesses, governments, churches, non-profit organizations, and individuals. All of these entities are required under certain conditions to prepare financial statements for the purpose of giving others an accurate depiction of their financial condition.

Often this requires disclosing information that is not favorable, including reduced profitability, diminished cash reserves, controversial levels of executive compensation, spiraling debt obligations and the like. Although organizations and individuals might prefer to hide such information, they have a legal and moral obligation to provide accurate information.

Most financial statements are crafted according to rules governing how to define, calculate, estimate and verify various aspects of the statements. Following these rules helps make financial statements accurate and comparable across different entities. But rules alone are not enough. Entities must make judgments about factors such as the likelihood of a contract being completed on time, the lifetime of equipment, the future interest rates, a wide variety of future risks, and a host of others. Leaders are often tempted to adjust their judgments about these factors in a way that paints the entity in the most favorable light—rather than giving the most accurate picture of its true financial position. In fact, some leaders may even believe they have a duty to “manage earnings”—to make profits appear stable from quarter to quarter—by making pessimistic adjustments during prosperous times and switching to optimistic adjustments during lean years.

The Bible, social expectations and laws and regulations in free and open countries prohibit such manipulations. The only acceptable criterion for financial statements is whether they “present fairly, in all material respects, an entity’s financial position, results of operations, and cash flows in conformity with generally accepted accounting principles."[1] That is, they must convey the truth. It is not enough that they follow the rules, or that they refrain from containing false statements. They have a higher duty, which is to convey an accurate picture of the true situation. This is the standard by which all of our statements should be judged. Do they give the listener or reader an accurate picture of the situation? If not, they are not telling the truth.

There May Be Exceptions to Truthtelling in the Workplace

Though it is clear that the default position is to tell the truth, even in Scripture, that is not considered a total absolute—there are some exceptions to the general principle. Of course, what the law allows for does not determine the standard for truthtelling. Another way to say this is that the law is the moral minimum, the moral floor, not the ceiling. What a person can get away with and yet not violate the law is not the standard.

Here are some of the categories of acceptable exceptions to the norm of truthtelling.

Puffery/Exaggeration

Much of contemporary advertising falls into the category of what may be referred to as “harmless puffery.” This may apply both to the text of an advertisement as well as to the image created and associated with a company’s product. For example, the TCBY Yogurt chain calls itself “The Country’s Best Yogurt.” However, there is likely widespread disagreement about whether their product is really the country’s best yogurt. As far as is known, the company has not taken surveys to accumulate evidence to back up their claim, nor do they provide any substantiation to what is basically a matter of opinion and an immeasurable claim. This is no doubt an exaggeration, an example of puffery that few people take seriously as a demonstrable claim. Yet most people would not regard the company's name as a lie. The reasonable consumer takes the claim for what it is—public relations fluff.

To hold advertising to strict truthtelling standards that would put puffery off the table would reduce advertising to mere statements of verifiable facts and would cause most advertising to lose its appeal. “The city’s best pizza” is understood to be a slogan, not a fact. To a large degree, any statement of unverifiable opinion could be considered a violation of truthtelling, unless perhaps it includes an explicit statement of “It is my opinion that….” Yet we can usually tell when someone is expressing an opinion, and we recognize that advertising is generally a mercenary kind of opinion, not a claim of objective truth. We don’t need to be told, “The city’s best pizza—in the opinion of the owner.” Opinions are valuable to society—even when they are wrong—and advertising has value too, even if it amounts to harmless puffery. Do we really want a world where sports fans chant, "We're number 14, or at best 13," or where lovers croon, "I love you with 93% of my heart?"

But take the example of a car dealership that advertises, “Credit problems? No application refused.” Most people would not take an ad like this literally because we recognize it as commercial puffery. We wouldn’t really believe that a person with very poor credit, or who has just filed for bankruptcy, would actually be granted credit. Because we take it with a grain of salt, we might think the ad is unlikely to harm anyone. Yet because it makes a specific claim—“no application refused”—it does have more potential to mislead than a vague opinion statement does. Unless the advertising conveys to the average person the actual reality of the situation, the ad should explain what it really means. In this case, the company should include a disclaimer that makes it clear that all credit applications are subject to review. Or, to minimize the possibility of being misunderstood, they should delete the portion of the ad that claims, “no application refused.” The difference here is that the claim is not merely an opinion, but a claims to be a fact, "No application refused." If it is not a fact, it is an unacceptable violation of truthtelling.

Advertisers may also make implicit claims, not by the direct text of their ads, but by the images that are associated with their products. Men’s shaving products are often accompanied by beautiful women being attracted to the men who have just finished using a company’s razors, shaving cream or after shave lotions. The suggestion is that if you use this product, you will be surrounded by beautiful women who find you irresistible. Or at least that you’ll feel more like an attractive man. Or it may be that the ad simply uses the beautiful woman to grab your attention, and you know perfectly well that using it won’t make you more attractive.

Regardless of the psychological workings of the ad, most reasonable consumers see through this puffery and don’t expect an entirely accurate portrayal of the appeal of the product. In fact, most people, when they think about it rationally, recognize that their hygiene products have little to do with their sexual attractiveness. Yet the image associated with such products remains a popular one for advertisers, which is the reason that this form of puffery continues. It is hard to work up too much outrage at this type of puffery, to the degree it doesn't really mislead anyone. (Whether this type of advertising reinforces harmful gender stereotypes, demeans women or men, or promotes unhealthy body images is a worthy question, although one beyond the scope of this discussion.)

Of course, when advertisers make measurable claims, they are presenting themselves as telling the truth, fulfilling the moral demands of truthtelling, as well as the laws requiring truth in advertising, apply. For example, when toothpaste manufacturers make the claim that “4 out of 5 dentists surveyed recommend Crest,” that must be verified by the surveys themselves.

Truth is also expected when verifiable claims are made outside of an advertising context. Exaggerating non-advertising claims is usually intended to be misleading, to present the person or situation as better than he/she/it actually is. If the truth were plainly told, it would clearly not leave as positive an impression as the exaggeration. For example, embellishing your work experience or educational background on a resume is unethical, since the recipient of the resume expects the truth and makes decisions based on receiving the truth in those documents. Saying, “I’m the best person for this job,” is allowable because everyone understands it’s not based on an objective assessment of all candidates. Saying, “I graduated from Oxford,” when you did not, is not allowable.

Even when giving opinions that cannot be verified, you should still be wary of exaggerating, since the person who requests your opinion may be depending on an accurate assessment. If you are asked your opinion about a former student or co-worker, for example, any specific claims you make are expected to be true. Even a statement as vague as “one of my best students” should only be made if the student was indeed better than most other students.

Of course, hyperbole (the use of exaggerated emphasis to make a true point) is a common figure of speech employed in contemporary language. It is also used in the Bible, particularly the poetic sections. Psalm 6:6 reads, “Every night, I flood my bed with tears; I drench my couch with my weeping” as a hyperbolic way of saying, “I am in deep sorrow.” We don't expect the Psalmist's couch to actually be saturated or the bed to float away. Jesus’ statements, “If your hand causes you to stumble, cut it off . . . If your foot causes you to stumble, cut it off . . . And if your eye causes you to stumble, tear it out” (Mark 9:43, 45, 47) are often regarded as hyperbole. We would be horrified if someone amputated their foot in the hope it would prevent him or her from robbing banks again. But hyperbole is not expected in situations where someone is soliciting your opinion and, if it is offered, it is normally followed with an explanation that more clearly specifies one’s actual opinion.

One example where this is difficult to sort out is when it comes to letters of recommendation. This is particularly troublesome when it comes to recommending employees whom you have terminated and who, without your endorsement, will have trouble securing other work. One of the common solutions to this, often recommended by a company’s lawyers, is to say nothing, except to confirm that the person in question worked at your company during the stated period. But this can be very problematic in the case of a dangerous ex-employee, since it does not protect future employers from potential harm through incompetence, lack of character, or violent personality. Yet most companies do not want to risk being sued for slander. In court, the truth is an absolute defense, but most companies will want to avoid litigation in the first place.

When recommendations are given, it is not uncommon for them to be exaggerated, building up the person being recommended to be better or more qualified than he or she actually is. This is also the case when recommendations are given for employees who are going back to school to further their education. This common practice of exaggeration in references causes problems, because the recipient of the reference expects a forthright evaluation of the person so that it can be determined whether or not the person is a good fit for a particular position or organization. A poor fit serves neither the employee nor the organization well.

The commonplace nature of these exaggerations is why there is cynicism about recommendations and references, with some actually discounting them and questioning their overall value. This is a difficult area, since prudence under the law may prohibit material disclosure about a candidate for a position. Though you would not be violating the obligation to tell the truth, it’s not helpful at all for the person requesting the recommendation. To be fair, if you adopt this policy, it should apply to all requests for recommendations, since it would not be right for your non-disclosure to be interpreted as disapproval of the candidate. This would even be the case if someone asked you for more clarification “off the record.”

We may be tempted to engage in such exaggeration on our own behalf. We may want to say or imply something like, “I’ve been in the kind of situation you’re talking about many times, and here’s what I’ve found is the best way to handle it,” when in fact we have only faced the situation once or only heard about how others faced the situation. If, in fact, we have high confidence about what to do in such a situation, we may feel justified in portraying ourselves so confidently. But the claim to have done something we have not is, in fact, a lie told in a situation where the truth is expected. Rather than exaggerating how often you’ve encountered a specific scenario, simply tell the person how you would handle it. You can say that you’ve seen it (if you have) and spell out how you would deal with such a situation.

White Lies

“White lies” are lies that are meant to smooth discourse or deflect minor conflict, supposedly without doing harm to anyone. For example, if you are late to a meeting, it is often tempting to manufacture a face-saving excuse, such as “Traffic was bad today,” or “I got a last minute call that I had to take.” Or take this very common scenario. You don’t want to talk to someone, so you ask a colleague to tell the person that you’re out of the office or in a meeting. Other kinds of white lies include statements like, “Let me introduce my dear friend” (of a colleague you don’t like very much), “I see you are a wise person” (to a customer who is obviously a fool), “I’ll call you” (when you have no intention of calling).

While it is difficult to take a strong stand against white lies, since they seem so harmless, there is usually a way to manage these cases without lying and still stay out of awkward situations. If you are late to a meeting you can simply admit that “I’m sorry I got hung up,” and let it go at that. The people with whom you are meeting don’t need to know what hung you up, and the ambiguity is better than a white lie, though both seem relatively harmless. Similarly, when you want to be unavailable, simply have the person representing you say you are unavailable. The person asking generally doesn’t need to know the precise reason you are not available to talk to them, and you are under no obligation to give full disclosure of the reasons. Or if you are dealing directly with the person, you can simply say, “I can’t talk about this now, but would be glad to get back to you later on that.” Again, you are under no obligation for full disclosure. Leaving some ambiguity is not necessarily the same thing as deception and less than full disclosure is not necessarily lying.

Some situations in which we are tempted to tell white lies are actually scenarios in which we ought to be truthful. Take, for example, when someone asks for your evaluation of a presentation made at the company. It would be easy and very efficient to say, “It was great, I liked it,” and leave it at that. But that may be missing an opportunity to give helpful, constructive feedback if, in reality, the presentation wasn’t good. You can praise the parts that were genuinely praiseworthy, but also point out the areas that are shortcomings so that the person can improve for the next presentation.

Likewise, we may try to convince ourselves that some types of deceit are acceptable because they are relatively minor. This includes misleading your employer about how you use your time or padding your expense account. We may be especially susceptible to this kind of deceit if we can convince ourselves that it’s common practice. Or we may try to justify deceit as compensation for a perceived injustice against us. “I deserve a bigger share of the tips, but I’m getting cheated out of it because I’m not sleeping with the boss, like Pat is, so I’ll make up for it by skimming a little out of the cash drawer.” These have clearly moved beyond anything like a white lie or harmless puffery. They are deceits against unsuspecting counterparties, having no other object than personal gain we know we could not achieve if the other party were not deceived. These have no place in Christian ethics.

Bluffing

One of the most common violations of truthtelling in the work world is bluffing or what some call, “mutual deceits.”[1] Bluffing may be legitimate when all the parties understand that the truth is not necessarily expected, and the bluffing is considered part of the negotiation. It’s somewhat akin to a dance that’s expected where both parties know the music and the steps. Routine examples of bluffing that are generally considered legitimate include faking in sports, deception in poker, negotiating prices while shopping in many parts of the non-western world, and not-guilty pleas in trials. The bluff that Philippe Kahn put over on the salesperson from Byte magazine is another example. What makes bluffing seem acceptable is the assumption that everyone knows that bluffing may occur—that is, everyone knows the rules of the game. This is clearly the case in the above examples (though not as clear in the Kahn case), and it is difficult to claim that someone has been unjustifiably deceived in those cases.

Perhaps the classic defense of bluffing in business comes from Albert Carr, writing in the Harvard Business Review in 1968. Carr claimed that business is analogous to poker, and since everyone knows the rules of the game, bluffing is not deception and is therefore an acceptable practice. This is a part of what is often referred to as a caveat emptor ("let the buyer beware") morality that is quite consistent with Carr’s view of truthtelling. Carr further argued that bluffing is a necessary component of shrewd and effective business practice. Speaking of business people he said,

In their office lives they cease to be private citizens; they become game players who must be guided by a somewhat different set of ethical standards.... Poker’s brand of ethics is different from the ethical ideals of civilized human relationships. The game calls for distrust of the other fellow. It ignores the claim of friendship. Cunning deception by concealment of one’s strength and intentions, not kindness and open-heartedness, are vital in poker. No one thinks any the worse of poker on that account. And no one should think any the worse of the game of business because its standards of right and wrong differ from the prevailing traditions of morality in our society.[2]

Carr argues for a radical dual morality, in which the moral standards of private life cannot be applicable to business and still be competitive. Carr concludes that truthtelling must be abandoned as an ethical value in the workplace and be replaced by the bluffing and deception characterized by poker. In this Carr is at odds with economists such as Milton Friedman, who argued that business activities must conform "to the basic rules of the society, both those embodied in law and those embodied in ethical custom."[3]

From a biblical perspective, Carr’s vision of business morality as strictly dichotomized from the morality of private life cannot be considered legitimate business ethics. The Bible does not accept the division of life into separate moral spheres, some of which permit taking advantage of other people through unexpected deception. As suggested earlier in this paper, the poker analogy does not apply to business, since business is clearly not a game: not all participants are at the table by choice (and are not free to leave at their choice) and not everyone is aware of the rules of the game. This last element is especially important since the line between bluffing someone who knows what is happening and taking advantage of someone who does not, is not always clear.

However, this is not necessarily to suggest that all bluffing is wrong. Nor does it imply that bluffing and negotiation are necessarily the same thing, since in negotiations the goal is a good and honest agreement on a fair price with mutual benefit. However, the reality is that bluffing is frequently a part of negotiations. There are some scenarios where it is clear that everyone does know the rules, such as negotiations for commercial real estate sales, or settlement agreements in lawsuits. In such situations, both parties expect a process of negotiation that progressively moves towards a final agreement. But progressive negotiation should not involve outright lying to the other parties in the process. Rather, it simply means not laying all your cards on the table at the beginning. For example, a lawyer representing his or her client in a settlement conference may have authority to settle the case for $100,000. Truthtelling does not require disclosing so initially, and the lawyer may legitimately make a first offer of $75,000. This gets more complicated if the lawyer is explicitly asked whether this is the highest amount he or she is authorized to offer. Rather than lying and saying “yes,” the lawyer can simply assert this is what is being offered at this time. Negotiations do not have to involve actually deceiving the other parties, even if they know the dance. But neither does truthtelling have to mean full disclosure up front, thereby losing any negotiating leverage.

An important limitation of bluffing in any situation is that material disclosure is required; that is, disclosure of factual information essential to understanding the transaction. For example, if I were selling my car and the transmission was about to fail, it would not be legitimate for me to mislead the buyer into thinking the transmission is in good shape. If I am unwilling or unable to disclose the car’s true condition, then at least I am bound to state that I am selling it “as is.” In fact, in many jurisdictions, sellers can be sued for fraud for failing to make material disclosures (this is particularly true in home sales).

In many negotiating scenarios, participants bluff by making up unverifiable pseudo-facts, such as, “I don’t know if I can get this past my boss,” or “This is my best and final offer,” or “I have x number of others interested in the deal.” Is making up false “facts” within the rules of the game that everyone understands? In some cases, it may be. “This is my final offer,” given at the beginning of a negotiation, would not be taken seriously by an experienced negotiator on the other side. Or if one party says, “I have five other people interested in this deal,” that claim would be discounted by others around the table. Nonetheless, these are questionable practices because making apparently factual statements may be regarded by the other parties as going beyond the rules of bluffing. We may not be able to say categorically that Christians should not engage in this particular kind of bluffing. But we would strongly encourage believers to ask, “Does this process honor God and respect the counterparty?”

At some point, all negotiations need to be anchored in the rules of normal reality, where factual statements are expected to be true. If you try to sell land you don’t own, for example, no one will regard that as a legitimate bluff. The best approach may be to regard bluffing as similar to advertising. Exaggerating (or understating) the parties’ attitudes about the price, terms, or other aspects understood to be a negotiating tactic is not deceitful. But making false statements of fact is deceitful. It is also unlikely to be believed except by the most credulous counterparties, meaning those most likely not to understand the rules of the game that make bluffing legitimate in the first place. Instead of making up false facts, why not make true statements about the counterparty’s lack of knowledge. Instead of saying, “I have three other buyers ready to make an offer, so consider yourself lucky to be offered this price,” how about saying, “For all you know, I could have three other buyers ready to make an offer, so do you really want to press your luck on this price?”

To be clear, having reservations about bluffing does not mean that a company or an individual cannot put its best foot forward. This is why people dress up for interviews and presentations, and why a company’s offices are attractive places to work and visit. But it is important that what represents us in the best light is our actual selves or products, not a fictional person or product. In the scenario with Philippe Kahn and Byte magazine, Kahn deliberately misrepresented his company to the sales person who didn’t know he was being bluffed. This case illustrates the danger of bluffing. Even if it’s conceded that bluffing can be acceptable when it’s clear that everyone knows the rules, the temptation to take advantage of someone who may not be clear on the rules is overwhelming, and often is the reason for the bluff in the first place. As Alexander Hill puts it, “The concept of mutual deceit. . . should be utilized only in carefully prescribed situations. . . where everyone clearly understands the rules and innocent outsiders cannot be negatively affected. Such sanitary procedures are nearly impossible to implement in the marketplace.”[3]

In this light, the case of Philippe Kahn and Borland looks like an illegitimate deception. The fact that the ploy was successful does not make it right, any more than running a red light is okay if you don’t happen to get hit by a car in the intersection. If Borland had gone out of business and stiffed Byte $20,000, it would be clearer that the deception was illegitimate.

In fact, Kahn’s deception was very similar to the kinds of deception perpetrated in the recent global economic meltdown triggered by the collapse of the collateralized mortgage obligation market. Lenders made risky loans to home buyers without demonstrated ability to pay back the loans. Lenders then sold the loans to investors who were misled about the degree of risk involved. If housing prices had happened to continue rising—similar to the way Borland happened to sell a lot of software—then when borrowers defaulted, the lenders could have foreclosed and sold the houses at a high enough price to repay the loan, and the investors might never have known how much risk they had been exposed to. But the fact that the opposite happened—housing prices declined, the loans went bad, and the economy was thrown into a global recession—shows that just because a deception sometimes benefits from good luck, it is not true that everyone benefited and no one got hurt. Deceiving another person or party is a hurt all on its own.

In fact, it is often difficult to tell where bluffing ends and illicit deception begins. Imagine misleading a co-worker into thinking you will endorse her bid for a promotion, then painting her in a bad light in front of the boss so that you can get the promotion yourself. This is clearly a violation of truthtelling, a blatant abuse of the co-worker, and a dishonor to Christ. Yet you can almost convince yourself it is merely a form of bluffing. One of the problems about bluffing is that it opens the door to abuses while maintaining a veneer of legitimacy. We would do well to limit bluffing only to circumstances in which we are certain all parties understand that bluffing is occurring and what the rules and limits are. To repeat Alexander Hill’s warning, most people seldom or never encounter such situations in their work.

When Someone Has No Right to the Truth

Another category of possible exceptions to the norm of truthtelling is when the person asking the questions has no right to the truth. For example, if a gun-wielding criminal comes into a convenience store for the purpose of robbing it, the employees are under no obligation to tell the truth about where the money is. Most people would accept that lying to the robber is justifiable. In fact, in some cases, explaining to the person that he has no right to the truth would be tantamount to giving him the information he is seeking. In those cases, it may be acceptable to deceive the person to the minimum degree necessary to prevent him from learning what he has no right to know.

Similarly, if you are in a position of keeping confidentiality, people who ask you to breach that duty have no right to the information they are seeking from you. However, in the case of confidentiality, the duty not to disclose information does not make lying justifiable. For example, if you work in the human resources office of your company and you have information about upcoming layoffs that you are to keep confidential and someone asks you for a “heads up” about their job security, you have a duty to maintain confidentiality.

It would be wrong to divulge the information, but it would be equally wrong to lie. The proper response is to point out that if you had any information about the topic, you would be unable to disclose it. This is the case even though the person may appeal to your friendship and may indicate that the reason they need this information is because of a pending purchase of a home or some other financial commitment they are making. In these cases, you must maintain confidentiality as a part of your loyalty to your company, telling the person that you can’t answer questions like those and you don’t appreciate being put in such a compromising position, one that could cost you your job if you disclosed that information.

The difference between the robbery example and the confidentiality example is that the human resources officer has another option besides outright lying. A store clerk cannot tell the robber, “If I knew where the money is, I couldn’t disclose that information to you”—at least not if the clerk hopes to survive the robbery attempt! But the human resources officer does have that option. This would also be the case if a customer inquired about your profit margin on the price of the product you’re negotiating. You don’t need to lie, but you can make the point that it is confidential information that you’re not authorized to disclose. This emphasizes the fact that the customer does not have the right to that information. The customer does have the right not to be lied to by you, however.

The situation is more ambiguous when the deception merely protects you from the consequences of your own actions. For example, your employer generally doesn’t have a right to know what you do when you are off the job. What if you choose to do something that would make you unpopular with your boss or co-workers or reveal deeply personal information? If someone mentions she saw you at a casino last weekend, would it be okay to lie in order to deny it? What about a civil rights march? A church service? A workshop for survivors of domestic violence? It is difficult to find a general rule in scripture or elsewhere for this kind of situation. Instead we can note that growing spiritual maturity tends to go hand-in-hand with greater ability to disclose truth in situations that seem to threaten personal difficulty. A new Christian might find it too difficult to admit to being at a church service if he fears it would diminish his co-workers’ esteem for him. More mature Christians might be willing to take the risk and might be capable of turning the situation into a positive experience for themselves and their co-workers. Yet even the most spiritually mature who convert to Christianity in a country where such a conversion is illegal might properly decide to deceive others to keep it hidden, at least until the time and place of God’s choosing. Dietrich Bonhoeffer advised his friends to give the Nazi salute (“Heil Hitler”) in order to hide their opposition to Hitler.[1] Here again, notice that in order to find a clear example, we have resorted to a situation far beyond what most Christians face at work. For most Christians at most times in most places, growing in Christ means growing more willing to disclose ourselves openly and without deception.

Deception to Obtain Information You Have a Right to Know

There are situations in which deception is necessary to obtain information an organization has a right to know. This essentially takes an exception noted earlier, deception for national intelligence purposes and applies it to other workplaces. For example, imagine your job is to serve court orders to people who wish to avoid appearing in court. If you start by disclosing who you are and why you are attempting to contact them, they will probably never admit who they are. Yet your job is vital to the function of the system of laws.

Or consider the practice of mystery shopping. As a means of quality assessment, many retail, medical, hospitality and other customer service companies use mystery shoppers to visit their locations, pretend to be customers, and report on their experience. The information may be essential to assuring that customers are experiencing what the brand promises.[1] In order to make sure they are being treated like ordinary customers, mystery shoppers must conceal the truth that they are reporting to the company on their experience. Mystery shoppers—at least in these situations—are trying to obtain information their organizations do have a right to know, but could not obtain without deception.

Just as it may be legitimate to use deceit to protect information that someone else does not have a right to know, it may also be legitimate to use deception to obtain information you do have a right to know. The same approach can be taken to learn about competitors' customer service, prices, etc., by sending a "competitive mystery shopper" into their locations. This is on shakier ethical ground. As long as the competitive mystery shopper simply observes publicly-visible prices, interactions, environments and the like, no deception is involved. But if competitive mystery shoppers are asked who they are or what they are doing, it would be unethical for them to give deceptive answers. Even worse would be calling competitors, misleading them about your identity, and asking questions they would not respond to if they had not been deceived.[2]

Information You Have No Right to Know

Until now we have been discussing deception to obtain information you have a right to know. This is different from corporate espionage, which means using deception or other means to gain information that you do not have a right to know.The information is typically about the target company's products, strategies, finances, people or research and development. This is both unethical and illegal. Because the entity conducting the espionage has no right to know the information, it certainly has no right to use deceit to obtain it. For example, some companies attempt to gain inside information on competitors by having employees represent themselves as graduate students working on a thesis. They may say or imply that the information will be disguised or aggregated. Obviously, this is illegitimate. This fits the general model of corporate spying, using fraudulent means to gain access to information to which the competing company has no right.

A sidelight to corporate espionage is a situation in which you may un-deceitfully obtain information to which you have no right. For example, you are a sales representative staying overnight in a hotel in your prospect’s city. You discover that a sales representative of a competitor stayed in the same hotel room the night before and left a copy of the competitor’s bid in the drawer. All you have to do is leaf through the bid and you will learn the competitor’s prices, terms, and recommended products. From this you will gain a decisive competitive advantage. You have no right to the information, and in fact (in most cases) the bid will be clearly marked “confidential.” Yet you have not deceived anyone to obtain the information. Should you consider it a lucky break, or the due consequences of the competitor’s blunder in leaving a bid in a hotel room?

Because the principle we have been following is the one of "right to know," the only consistent answer is that you must not leaf through the bid or otherwise allow yourself or your company to learn its contents. Most reputable companies have a policy against using—or even becoming aware of, if possible—competitors’ confidential information. Managers and executives—if they are ethical—will enforce these policies and rigorously prevent the use of information to which the company has no right.

Social Implications of Protecting Information Others Have No Right to Know

These discussions about the legitimacy of some deception when another party has no right to know may seem like a litany of excuses for questionable conduct. On a personal level, this may often be the case. But on a societal level, if there is no mechanism to protect people and organizations from having to reveal things others have no right to know, society may be harmed. Consider the following case reported to the Theology of Work Project:

I worked for a major pharmaceutical company, teaching a course intended to help managers and professionals investigate product quality complaints. So, if a product was discovered to have been manufactured and released although failing in fact to meet quality standards, there would be an investigation to uncover what had happened to cause that incident. In the course of doing the investigation, it is the professional thing to develop a list of possible causes which are then tested and eliminated by logic and further testing to determine which best fits the actual effect that has been reported. This is entirely comparable to the process a doctor goes through in diagnosing a mysterious set of symptoms; it would be malpractice to jump to premature conclusions without eliminating other reasonable and possible causes.

The company’s legal division, however, advised managers never to keep a record of having gone through such a list of possible causes, since those records would be subject to subpoena. If someone suing the company for another reason were to gain access to a document with a long list of possible causes of product defects, it could give the false impression that the company knows of many flaws in its processes, but is doing nothing to correct them.[1]

In this situation, the pharmaceutical company has internal information used to improve quality control. The company believes—justifiably, perhaps—that if this information is revealed to plaintiffs in lawsuits who have no right to know, it is likely to be misunderstood and used to harm the company. Because the company lacks confidence that what it regards as its right to privacy will be respected by the judicial system, it changes its process to prevent recording information that is needed to improve quality control. As a result, the public is harmed because the quality of drugs is not as high as it might be otherwise. You don’t have to agree with the pharmaceutical company’s opinion about exactly who has the right to know what to see that getting the balance right is a question that has important social consequences. The right to privacy, including the right to use deception to conceal information from those who have no right to know it, is too complex to be handled by a blanket prohibition of deception. In a fallen world, at least, truth and deception are actually complex issues, even in the light of biblical principles.