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TRADE SECRETS AND CONFLICTS OF INTERESTPRIVACYCASE STUDY
Presented by –Group 3
WARM UP-THE AGGRESSIVE AD AGENCY
Microsoft required aggressive Advertisement campaigns for which it invited ad agencies.
It had LOTUS as its major competitors. A new Ad agency-RGS&H pitched in and
tempted Microsoft by saying that-“It is intimately acquainted with Lotus’ plans to
deal with excel.”
WHAT IS A TRADE SECRET?
A Trade secret may consist of any formula,pattern,device or compilation of information which is used in one’s business and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.
SIX FACTORS TO DETERMINE WHETHER AN INFORMATION IS A TRADE SECRET OR NOT?
•The extent to which it is known outside a business.•The extent it is known internally in a business.
•The extent of measures taken to guard the secrecy.•The value of information.
•The amount of money and time spent in developing the information.•The ease/difficulty by which can be acquired or duplicated by others.
ARGUMENTS FOR TRADE SECRET PROTECTION
Trade secret
As intellectual
property
Confidentiali
ty
Allows fair
competition
TRADE SECRET AS PROPERTY
Regarded as Intellectual Property. Question of ownership-The Wexler case. Lockean view- “We own the results of our
own labor”.
FAIR COMPETITION
Associated Press Case. Competitive disadvantage-When an
information developed by one firm by spending time and resources is used by other firms without cose.
NON - COMPETITION AGREEMENTS
“A Women in Georgia signed a contract with an employment agency in which she agreed not to work in any
capacity for a period of one year ”
CONFIDENTIALITY
Employees who disclose trade secrets violate confidentiality policy.
Employer-Employee relations.
COMPETITOR INTELLIGENCE GATHERING
A Systematic collection and analysis of competitor intelligence.
In ethical limits.
THE UNETHICAL METHODS OF GATHERING COMPETITOR INTELLIGENCE
Theft of informatio
n
Misrepresentation
Improper Influence
Covert Surveillanc
e
CONFLICT OF INTEREST
Conflict of Interest occurs when a personal interest comes into conflict with an obligation to serve the interest of another.
CONFLICT OF INTEREST IN ENRON
CFO Andrew S. Fastow’s Dual
Role•Bargaining partnership deals with companies in which he had a stake and stood to gain from negotiating favorable terms
SOME DISTINCTIONS
•When personal interest leads a person to act against the interest of an employer•When there is a possibility of not fulfilling an obligation but the person has not yet done so
Actual & Potential
•When a person’s interest comes into conflict with the interest of another•When a person is obligated to act in the interest of two different people who have conflicting interest
Personal & Impersonal
Individual & Organization
al
KINDS OF CONFLICT OF INTEREST
Kinds
Violation of Confidenti
ality
Biased Judgment
Misuse of Position
Direct Competitio
n
MANAGING CONFLICT OF INTEREST
Managing
Objectives
Avoidance
DisclosureCompetitionRules &
PoliciesIndependent Judgment
Structural Changes
THE CONFLICT OF AN INSURANCE BROKER Ashton & Ashton-an insurance brokerage firm.
A world class museum in the USA-served for years by Haverford insurance company.
At the expiration of its insurance policy-Ashton & Ashton approached four comparable insurance companies with premiums ranging from $90,000-$110,000.
Fifth proposal sent by a small financially shaky insurance company-Reliable-annual premium $60,000.
Museum always chose the lowest bid for any service without any regard for quality.
Dilemma-Reliable Bid vs. Reputable Insurance Provider.
PROCTER & GAMBLE GOES DUMPSTER DIVING
Mr John Pepper-Chairman, P&G-found instances of dumpster diving within the organization i.e. obtained information about Unilever, its competitor, through questionable means.
P&G often resorted to “competitive analysis”.
This dumpster diving violated the company’s own code of ethics and policies.
In April 2001, Pepper fired 3 executives overseeing the entire process of obtaining unsolicited information in order to reconstruct its image.
Also disclosed the matter to Unilever, even made a promise of not using any information gained.
P&G had in effect blown the whistle on itself.
PSYCHOLOGICAL TESTING AT DAYTON HUDSON Answer the Questions true or false
I feel sure there is only one religion
My soul sometimes leaves my body
I believe in the second coming of Christ
I wish I were not bothered about thoughts of sex
I am very strongly attracted by members of my own sex
I have never indulged in any unusual sex practices
In April 1989,Sibi Soroka answered these
questions and hired as a store security officer in a target store in California
Afterwards feeling “humiliated and embarrassed” at having to reveal innermost beliefs she along with two rejected job applicants charged the store with invasion of privacy.
Dayton Hudson defended the use of “Psychscreen “ – a combination of tests to select applicants for the post of police officers, prison guards, air traffic controllers and so on.
The completed Psychscreen test is interpreted by Psychologists and rates an applicant on five traits emotional stability, interpersonal style, addiction potential ,dependability and rule following behavior.
Dayton Hudson does not receive answers to any such questions.
It said that questions on religion and sex though not job related ,evaluate and interpret psychological traits related to the job.
But it admitted in court having not conducted studies to Pshychscreen as a reliable predictor of Performance of a Security Officer.
FORD MOTOR COMPANY SURVEY Ford Motor set up a “Sociological Department”
in order to make sure that workers were leading a “clean ,sober and industrious life.”
They visited the employees’ living quarters to see whether they were neat and helpful, and they interviewed wives and acquaintances about handling of finance, church attendance, daily diet, drinking habits, and a host of other matters
Workers who failed to live up to expectations were fired.
Employees today would barely intrude so much into private lives as Henry Ford. Amongst the tools available today are
Drug tests Paper and Pencil Tests for assessing honesty and other
personality traits Extensive computer networks for storing and retrieving
information. Sophisticated telecommunication systems and
concealed cameras and microphones for supervising employees work activities.
EMPLOYEE PRIVACY
Work Place Monitoring Supervisor can eavesdrop telephone
Conversations of Employees Hidden cameras and microphones can be
used to observe workers without their knowledge.
Remote Sharing Desktop Electronic Systems for Financial Transaction
and Cash Transfers under Scanner Medical Sessions and Camps
CONSUMER PRIVACY Grocery shop Ids, ATMs in company take all
your data in their Sheets
Main purpose is to identify characteristics of potential customers by age,income,life style, or other measures.
Then a mailing list is made to target people at low cost. Such Targeted selling known as Direct mailing is beneficial to customers as it gives huge offers.
ISSUES IN CONSUMER PRIVACY Primary use Secondary use of information which is
Provided by us Can be sorted to some extent by asking
people to opt out from the mailing group.
MEANING AND VALUE OF PRIVACY
•Definition elusive
•Because of different nature of situations under which claims of privacy are made• •Not one notion of privacy , can be culture specific
•The members of the Privacy protection study commission were unable to agree on one definition after two years of study
HISTORY•As a legal concept developed in the late 19th century
•First discussion in an article in 1890 by Samuel warren and Louis Brandeis in the Harvard law review
•Was slow to gain acceptance but eventually lead to changes in the law structure (new York )
•Not until 1965 that right to privacy became a continuously protected right according to the supreme court
ARGUMENTS FOR AND AGAINST
Why is privacy valued and believed to be a right?
The mere desire does not entail this right Nor does it tell us the extent of it
UTILITARIAN ARGUMENTS
Appeals to consequences of the breach of privacy
Inaccurate or incomplete information can cause harm
Can be used for making important personnel decisions
Past record and information can be misused for groundless accusations
Constant monitoring at work can affect job satisfaction ,sense of dignity and self worth of workers
PRIVACY AND IDENTITY
• Privacy enables us to relax in public settings and release pent-up emotions
• Reflect on experiences as they occur and is essential for mental well-being
• Lack can lead to mental stress or even breakdown
• Promotes high degree of individuality and freedom of action
OBJECTIONS FOR THIS THEORY
• The unproved assumption that more harm than good will result from amassing information about employees
• Considers only the harmful effects as consequences
• Some positives also there- protection from employee theft reducing false accusations
• Ignores the moral implications of breach of privacy
KANTIAN ARGUMENTS
Based on the themes of autonomy and respect for persons
Emphasizes on the immorality of secretly observing employees even if it brings no harm
“ covert observation.. Is objectionable because it deliberately deceives a person about his world ,thwarting… his attempts to make a rational choice. One cannot be said to respect a man .. If one knowingly and deliberately alters his conditions of action, concealing the fact from him “
- Stanley I. Benn
THEORY STATES
Violates the respect for persons Prevents a person from making a rational
choice as an autonomous being A person loses control over how one is
perceived – Hyman gross Unable to alter any misconceptions Trust and intimate relations build up on
sharing information about others but this would be hampered if everything already known- Charles Freid
ARGUMENTS AGAINST Jeffrey Rieman argues that it is too strong an
argument to say one can be deceived and be deprived of free choice if they are watched unknowingly
Intimate relations can be formed even without the sharing of information
ROLE OF PRIVACY IN SOCIALIZATION Social conditioning determines sense of privacy
Different cultures and societies have different ideas of what belongs to the private sphere of a person
The personality of a person is determined by his/ her socialization while growing up
privacy is an essential part of the complex social practice by means of which the social group recognizes – and communicates to the individual – that his existence is his own . And this is a condition of personhood .
- Jeffrey h. Reiman
BOTH
Point to a key insight : that privacy is important in some way to dignity and well being
Even though it has become a necessary luxury it is an important part of a persons existence
PRIVACY OF EMPLOYEE RECORDS
Given the importance of privacy there are issues involved when it comes to organizations’ policies
The kind of information that is collected The use to which it is put The persons within the company that have
access to the information The disclosure of the information to persons
outside the company The means used to gain information The steps taken to ensure accuracy and
completeness of the same The access that employees have to information
about themselves
JUSTIFYING The intent of gathering information should be
legitimate
The information should be used for the very intent only
Only the needed information should be collected
The information is not leaked to persons without authority
PURPOSE should specify the conditions necessary to
run operations Involves conditions for employment’
supervise work related behavior, administer health benefits etc.
Necessary for complying with legal requirements
like taxes , social security, discrimination , health and security , and the like
Contractual employee-employer relation for an informed decision
Free of force and fraud, voluntary consent Union contracts against aberrations
DISCLOSURE TO OTHERS
The passing on of personal information to outside parties can be objectionable without consent as
the employer had a certain purpose to gather it
But the other party may not have a similar purpose
The employer does not own the data of the employees unlike other forms of property
Can be used inappropriately
MEANS USED TO GATHER INFORMATION
The means to gather information need to be
Transparent non- intrusive – polygraph , pretext
interviews should be justified Should not reveal more than what is needed Should not violate the dignity of the person Should not be secretive (no control on own
appearance)
ACCURACY, COMPLETENESS AND ACCESS Information is used for critical decision making
Should be accurate and complete
To avoid unfair treatment and wrong decisions
Employees should have access to information
about themselves so that they can challenge false claims and protect themselves
Polygraphic tests and other laboratory tests are highly unreliable and can result in false positives and misconceptions
OBJECTIONS TO INFORMATION PROCUREMENT VIA INTERNET
Information by “covert” means
Annoyance of Ads
Inhibits Autonomy when profile is fit into a particular mould
Impedes Equality by discriminating
PRINCIPLES FOR PROTECTING PRIVACY
Notice/Awareness
• Privacy policy that is prominently displayed,avoid “Blinking twelve”
Choice/Content• Mechanism calling for opt-in or
opt-out,choice of degree of divulsion & restrict usage
Access/ Participation
• Opportunity to contest accuracy or completeness of data.
Integrity/Security
• Steps taken in event of breach of security( eg misappropriation)
Enforcement/ Redress
• Contracting with an org that monitors & certifies info practices of websites.
IMPLEMENTING INTERNET PRIVACY
Implementing Internet Privacy
Principal Parties
Govt. Regulation
Self-Regulation
Vehicles Employed
Formal
Certification
Regulation
Material
Private Enhancing Tech
Cookie Management Software
FACT SHEET ON THE EUROPEAN UNION PRIVACY DIRECTIVE What is the EU Privacy Directive?
European Union Privacy Directive, also known as the EU Data Protection Directive, took effect on October 25, 1998. By this date, all fifteen EU member states were required to enact comprehensive privacy legislation requiring organizations to implement personal data policies to include:
a) Transparency
b) Purpose Limitation
c) Data Quality
d) Data Transfers
e) Special Protection for Sensitive Data: Racial /ethnic origin, health
AGENCIES UNDERPINNING INTERNET PRIVACY Dept of Health Education & Welfare
Instituted in 1972,”Fair Information Practices”
OECD Instituted in 1980
European Union Privacy Directive by EU Oct1998,binds member & non member states
Federal Trade Commission
Online Privacy Alliance Industry Associations Initiative
Electronic Privacy Information Centre Public Interest Group
f) Government Authority: Each EU member state must create an independent public authority to supervise personal data protection.
g) Data Controllers: Appoint registered "data controller" responsible for all data processing.
h) Individual Redress: A data subject must have the right to:
(1) access information about himself;(2) correct or block inaccuracies;(3) object to information’s use.
Companies being investigated include Ford, Hilton International, Mariott International, Microsoft, United Airlines and others.
CONCLUDING REMARKS Lawrence Lessigs concerns disorting Equality
&Autonomy don`t involve privacy per se.
Intrusion into private lives is done by psychological tests & hidden cameras too.
Trade off between Privacy & Convenience/Material Gain
Calls for coordinated effort involving multiple parties
THE ALLEGATION
March 7,2001, During the annual chairman’s review at HLL ,N. Jayaraman of Corporate Watch,an NGO alleged that there was disposal of mercury contaminated waste along with broken thermometers and ground glass from HLL’s thermometer plant.
THE FACTS….
Initially HLL denied all allegations claiming it had a 100% export oriented unit from which no raw materials or finished goods could leave without prior permission
However on clarification with the unit manager the allegations were found to be true
HLL decided to suspended operations and conduct a comprehensive audit and investigation
WHAT THE NGO’S HAD TO SAY… Scrap meant for industrial users was found in a
scrap yard in munjikal area of kodaikanal and HLL had no knowledge of it
These sales were illegal under Indian law
Mercury turns into vapour at ambient temperatures and inhaling the same can cause serious injury and disorders of nervous system and kidneys
Any waste containing more than 50 mg/kg of mercury is hazardous
1 gram of mercury deposited annually could contaminate a lake spread over 25 acres also making its fish unfit for consumption
Criticism of HLL’s casual attitude towards worker safety
Preliminary survey conducted by CHC showed there were many people with gum and skin allergy appearing to be caused by mercury
THEREFORE THE FOLLOWING DEMANDS WERE MADE:
Stop use of mercury in thermometer and ensure livelihood of the workers
Clean up the dumpsite To conduct a full investigation into the intent
and extent of mercury pollution within factory premises and surroundings
To conduct full investigation of workers involved and ex-workers
Compensation for damage done to workers, community and environment
NORMS AND PRACTICES @ THE PLANT!• The plant was a export oriented unit with strict controls
and systems.
• The glass scrap containing residual mercury was treated.
• Scrap which was sold contained only1.04% mercury.
• Elaborate procedures to eliminate mercury from the factory
• Health of the workers was monitored continuously1. Measure mercury level in urine every month, as per
WHO standard.2. Comprehensive annual clinical examination.3. Statutory inspections and health assessment by
factories inspectorate of government.
HLL’S RESPONSE…• Suspended operations of the factory on 8th march.• The process was audited by HLL and Tamil Nadu State
Authorities.• Those responsible were identified and subjected to
disciplinary actions.• URS Dames Moore(URS) to conduct a detailed
Environmental audit.• P.N.Vishwanathan(Retd.) director grade scientist,
industrial toxicology research centre to study the environmental and health aspects.
• On the insistence of Greenpeace and TNPCBinducted Tom Van Teunenbroek of TNO-MEP to conduct environmental and health audit.
• All three of them found no evidence to show any ecological or human risk involved.
AT THE END….. On May 28-29.2001,HLL announced permanent
closure of the mercury Thermometer manufacturing factory at Kodai in
Tamil Nadu. The deputy chief inspector of factories,
Government Of Tamil Nadu announced that the employees were in sound health conditions.
HLL persuaded Indian and the US governments to permit export of waste to US based Bethlehem Apparatus Inc. For receipt and recovery of the mercury from the waste.
The employees were deployed to another HLL factory in Kandala,Gujrat or given Ex-gratia payment. All 130 employees opted for VRS.
HLL proposed remediation of soil in line with Dutch intervention standard of 10 ppm mercury.
Thank You