Case Study 5

HP’s Secrets and Oracle’s New Hire

1. I do believe the Hewlett-Packard board of directors had enough reason to fire Mark Hurd for
falsifying entries in his expense accounts (on page 410 of our text, it states that falsifying entries
violated HP’s business ethics standards). Falsifying financial information certainly gives them
just cause to terminate his employment with the company. I do however believe the decision
was based on his involvement with a former Playboy model. Although the court found him not
guilty, I believe the board of directors though he was guilty but rather than having a public
relations nightmare on their hands, they chose to fire him due to violation of company policy
(on page 410 of our text, it states that an employee’s main ethical duty is to work towards the
goal of the firm and avoid any activities that might harm these goals). It was not morally wrong
for them to fire him. Not only did he violate standards, he made the company look morally
wrong by having a relationship with a woman outside of his marriage. I think it was extremely
wise of them to fire Mark Hurd.

2. I agree that it would be difficult for anyone, especially Hurd, who had already proven to be
morally corrupt, to work for a competitor, fulfilling the same position as he did previously and
not rely on some of the things he had learned from your previous employer. Even if he never
mentioned anything about his business with HP, his knowledge would still influence the
decisions Oracle made regarding HP in business competition. I don’t think he could completely
ignore the information in using his skills. Although I believe the agreement makes it very hard
for Hurd to find employment because of the work he did and the business contacts he acquired,
I do not believe the agreement was completely unfair. Confidentiality agreements are made to
keep people from using sensitive corporate information, which should not be made available to
the general public or to various competitors. Also, Hurd did sign the agreement, which in my
opinion, made it feasible for him to potentially be sued by HP when becoming employed with
Oracle.

3. I don’t believe it was wrong for Hurd to gain employment at Oracle after being fired from a
position at HP. Oracle was almost certainly influenced by the fact that Hurd had insider
knowledge of HP’s business practices. However, I would also fault Oracle. In order to prevent
irreparable harm to HP, both parties (Hurd/Oracle) should have waited the mandatory 12
months following Hurd’s termination of employment with HP, before accepting a
position/hiring him. Hurd also agreed that if he accepted a position with a Competitor, he
would promptly give written notice to the senior HR manager for the HP business sector in
which he worked, with a copy to HP’s General Counsel.
Case Study 5

Insider Trading or What are Friends For?

1. Yes, the actions of Longueuil, Freeman, Barai, and Pflaum were morally wrong. In Freeman's
case, it's really weird because it seems like he's the one who provided Longueuil with the
information he traded on and he's the one who recorded him talking about it for the FBI.
Freeman and Pflaum were just trying to save themselves at that point. They did betray their
friends, but they all knew they were doing something that was not ethically acceptable in their
business. An ethics of care implies that there is moral significance in the fundamental elements
of relationships and dependencies in human life. Normatively, care ethics seeks to maintain
relationships by contextualizing and promoting the well-being of care-givers and care-receivers
in a network of social relations. An ethic of care would say that it was important to protect
their friends. Insider trading gives people an unfair advantage in a free market economy. Yes,
they should be prosecuting those who illegally profit.

2. I think PGR operates in a very gray area. Morally, I believe they are responsible because the
company connected public company insiders to hedge fund employees knowing that those
insiders would divulge material nonpublic information about their companies to the hedge fund
employee. I also believe that Winifred Jiau is morally responsible for his actions. According to
Freeman, Jiau provided them with almost the complete financial results before they were
announced.

Sergeant Quon’s Text Messages

1. Lieutenant Duke and Police Chief Schiarf need to determine what actions they are going to
take against Sergeant Quon regarding his repeated misuse of the company pager. After
determining what disciplinary actions needed to take place, Schiarf should be the one carry it
out since he the Quon’s immediate supervisor. At the very least, Quon needs to be
reprimanded for his repeated misuse of the pager and it needs to be made clear that no more
text messages of this nature will be allowed or it could result in his termination. He needs to be
made aware that he is not to exceed the limit further due to personal use.

2. I don’t believe that his assurance was an implicit agreement as he never implied that he
wouldn’t audit Sergeant Quon’s text messages, he just failed to routinely monitor or discipline
employees for personal use as stated in the policy. I believe Lieutenant Duke felt obligated and
refrained from auditing the text messages because Sergeant Quon payed his overage fees.
However, Quon made it a repetitive behavior which warranted Duke’s suspicion that Quon was
using the pager for abusive privileges that did not relate to work. It was not an implicit
agreement that Duke had to keep. He was enforcing the City’s “computer Usage, Internet and
Email Policy.”
Case Study 5

3. No, they did not violate his right to privacy. As stated in the City’s “Computer Usage, Internet
and E-Mail Policy,” the City reserved the right to monitor and log all network activity without
notice. The City also warned that employees “should have no expectation of privacy or
confidentiality when using these resources.” Quon was using department equipment for
personal use and therefore he really has no right to privacy when the equipment is not his.

4. No, I don’t believe the 4th Amendment’s right to freedom from government “unreasonable
search and seizure” should apply. Quon is using government-issued equipment specifically to
improve their coordination and responsiveness. He should have kept his personal texts on a
personally owned piece of equipment. If it belonged to the police department, they have a right
to dictate how the equipment is used and enforce that policy.