Peter had been a human resource (HR) manager for 18 years and vice president for 2 more years for Zyedego Corporation, a small company in New Orleans. In the last decade, there have been many changes to what potential/actual employees can be asked and what constitutes fair and equitable treatment. Frankly, the situation Peter was in was partly his own fault. The first issue began with Hurricane Katrina. In its wake, Zyedego employees had been working around the clock to get the company up and running again. The company had been calling all employees (if they could locate them) to get them to return to work. Gwyn, one of Peters HR managers, was planning on rehiring Dana Gonzales but found out that Dana was pregnant. Because of the rough condition of the workplace, Gwyn was concerned for Danas safety. Gwyn felt that if Dana were rehired, employees hourly wages should be decreased by 25 percent because the company had experienced setbacks during the hurricane and had to work with a reduced budget. In addition, Gwyn had some concerns over Danas citizenship because her passport appeared to be questionable. The flooding destroyed the original documents, and although Gwyn requested new documents, Dana had been slow in providing them. Gwyn had asked some difficult questions, and Dana stated that if not rehired she would go to a competitor and expected the company to pay severance of two weeks wages for the time she was out of work during the hurricane. Another issue is the hiring of truck drivers. Zyedego hires many truck drivers and routinely requests driving records as part of the preemployment process. Several of the potential new hires have past DWI records. All have stated that they would never do it again, have maintained a clean record for at least five years, and understand the consequences of another infraction. Gwyn has hired some drivers with infractions to secure the necessary number of drivers needed for the company. However, Gwyn has some concerns over whether she is exposing the company to unnecessary risk because of the increased potential for accidents or repeat DWI violation. From Peter, Gwyn needs guidance related to continuing these hiring practices. However, Zyedego has even deeper problems, which is what concerns Peter. The problem really started when Peter was still an HR manager, and involves one family. Guy Martin started working for Zyedego 20 years ago. He was married with two children, and had a mortgage. A little over a year ago, Guy separated from his wife, and they divorced only to remarry six months later. When Guy was hired, Peter had made sure that Guys son, who has asthma, would be covered by health insurance. Peter also helped out the family several times when money was tight and provided Guy with overtime work. But tragedy struck the Martins when Guy was killed in the hurricane. Police and rescue workers hunted for his body, but it was never found. Because Martha, Guys wife, was a stay-at-home mother, their only income had been from Zyedego. The companys death benefits provide only 50 percent of the deceaseds pension for a surviving spouse. Also, because the body had not been found, there was the legal question of death. Usually, it takes seven years before one can claim any type of insurance or death-benefit payments, as well as medical insurance, for the family. Even with Social Security benefits, Martha would probably lose the house and could be forced to seek employment. Zyedego had sustained substantial losses since the hurricane. Insurance companies were extremely slow concerning payments to all the small businesses, arguing about wind versus water damage. Impeding the process of obtaining benefits was the lack of many documents destroyed in the storm. The storm really began for Peter late last week when he met with the insurance company about medical reimbursements, death benefits, and the pension plans. Darrell Lambert was the chief adjuster for Zyedegos insurance and pension provider. Heres another case that we will not cover, said Darrell as he flipped the file to Peter. We cant help the Martins for a variety of reasons. There is no body, which means no payment until after a judge declares him legally dead. That will take at least a year. While that is being settled, Mrs. Martin and her family will not be eligible for medical coverage unless Zyedego is going to pay their amount. Finally, and I know this may sound heartless, but Mrs. Martin will only get a maximum of half of Mr. Martins pension. But he was killed on the job! exclaimed Peter. Did you require him to work that day? Did he punch in or out? Is there any record that he was called in from Zyedego to help? The answer is no to all of the above. He helped because he felt obligated to Zyedego. But I am not Zyedego, and I do not have any obligation to the Martins, Darrell said with a smile. Peter, exclaimed Darrell, I know that Zyedego is under intense financial pressure, but we are too. You have approximately 100 families that we will have to pay something to. You and I can spend the next 12 months going over every case, bit-by-bit, item-by-item, but if thats what you want, Zyedego will go into bankruptcy. We dont want that to happen. But we also are not going to pay for everything that you claim you are due. Our lawyers will stall the system until you go broke, and your 100 families will get nothing. Well, maybe something in five to seven years. What I am proposing is a way for you to stay in business and for my company to reduce its financial payouts. Remember, we have hundreds of small businesses like you to deal with. Darrell then calmly said, My proposal is that you look over these files and reduce your total reimbursements to us by 40 percent. To help you out, Ill start with this case [Martins]. You decide whether we pay out 40 percent or nothing. Tomorrow at 9:00 a.m., I want you to have 25 cases, including this one, pared down by 40 percent. If not, well, Im sure my superiors have informed your superiors about this arrangement by now. You should be getting a call within the hour. So, Ill see you here at 9:00, and Darrell walked out the door. Several hours later, Peter received a phone call from upper management about the deal he was to implement to save the company. QUESTIONS EXERCISES 1. What are the legal and ethical risks associated with the decision about hiring truck drivers at Zyedego? 2. What should Peter recommend to Gwyn about Danas case? 3. Do you think Peter is too emotionally attached to the Martin case to make an objective decision?