1.A Question of Ethics.Widener and Mozumder were employed as geophysicists by Arco Oil and Gas Co. On March 31, 1986, both employees were notified by letter that they were being placed on "surplus" statuswhich meant that if they were not placed in another position in the company during the next sixty days, their employment would be terminated. On termination, they would become eligible for benefits, including lump-sum allowance payments, under either of two company termination and retirement programs. To be eligible for payments under either plan, the employees were required to sign release documents. The employees were given informational packets outlining each plan in detail and advising the employees to contact the company's benefits specialist, Barbara Hough, about which plan they wished to elect. The employees went to Hough's office and signed various documents, among which was a general release that read, in part: "I release and discharge the Company ... from all claims, liabilities, demands, and causes of action known or unknown, fixed or contingent, which I may have or claim to have against the Company as a result of this termination and do hereby covenant not to file a lawsuit to assert such claims." After signing the release, each employee received a lump-sum payment. When the employees later sued Arco, alleging wrongful discharge on the basis of age discrimination, Arco claimed that the release document signed by the employees released it from any liability. The employees contended that they had not voluntarily and knowingly given the releases. The release document was confusing because it was not entitled a release, and Hough had never informed them of the significance of what they were signing. She only told them that they had to sign the various documents before they left. The court held that the releases were valid and granted Arco's motion for summary judgment. [Widener v. Arco Oil and Gas Co., 717 F.Supp. 1211 (N.D.Tex. 1989)]

a.Widener and Mozumder were apparently genuinely surprised to learn that one of the documents that they had signed was a release. In view of their apparent "innocence" in this regard, is it fair that they should be held to what they promised in the release document?

b.If the two employees had not been highly educated men, would your answer to the above question be different?

c.A recurring problem in the area of contract law is that innocent parties sometimes suffer harmful consequences because they failed to read what they were signing. A general ethical principle underlying the law is that people should be held responsible for their own actions. But the law also seeks to prevent one party from taking undue advantage of another. How well do you think the court balanced these two fundamental ethical policies in its decision in this case? Would you have held differently if you had been the judge?Why?

d.Companies seeking to reduce or replace personnel frequently offer special retirement or termination benefits to induce employees to retire early or voluntarily terminate their employment. A company frequently will also requestas Arco did in this casethat the departing employees, in consideration for termination benefits received, sign release forms in which they promise not to hold the company liable for any future claims that the employees may have against the company. Is this practice in any way unethical?