DISCLAIMER: The case discussed in this blog has not received a court ruling; the analysis is based on allegations. Please keep in mind that all parties are innocent until proven guilty in the court of law.
In September of 2014 the class action lawsuit; Jimenez v. Allstate had passed through the Court of Appeals for the Ninth Circuit. This lawsuit represents roughly 800 Allstate Claims Adjusters who have accused their managers of neglecting to report overtime and missed lunch breaks in order to receive a bonus for staying within corporate's annual budget. According to the court's ruling Allstate has allegedly broken four different laws which include California Labor Code Sections 201, 202, and 226. These practices have also violated the California Business and Professions Code 17200. Allstate has not yet made any public statements referring to this case.
|Allstate's (ALL) Stock Performance - September 2014|
Within Kantianism there is the Law of Humanity. This law states that in order to be ethical, one must simply treat people as they are, rather than a way to obtain what you desire. Employees were working overtime and skipping meal breaks in order to complete an overwhelming work load. This is common within companies, but when managers would not report overtime that they worked even though that was one of their responsibilities there is a serious problem. By reviewing possible reasoning for the managers to avoid reporting overtime, it is revealed that they would receive bonuses for staying within the budget. This budget did include payroll for employees. Therefore, the sensible motivation behind the managers' motives would be to take advantage of the employees in order for them to reap the benefits. For this reason, the actions would be deemed unethical in the Kantianism context.
Virtue Theory has four main virtues that are the basis of ethical evaluation. These virtues consist of courage, honesty, self-control, and fairness. It is cowardice to steal from your employees and mistreat them in the way the managers did in this case. Managers were also far from honest, they were lying about the amount of hours their employees were working by not reporting overtime. Self-control was not being practiced by the managers either, they let greed get the best of them and harmed their employees by not having self-control. Finally, there was not one bit of fairness behind the managers' actions. They did not deserve the bonuses because they were not properly reporting overtime. They were also being unfair to employees because the managers were preventing the employees from receiving the compensation they worked for. Since the actions did not comply with any of the four main virtues, this situation would also be deemed unethical based on Virtue Theory.
Assuming that the allegations made in the case of Jimenez v. Allstate are an accurate account of the managers' actions, all four theories claim that this situation is unethical. Allstate could have prevented this by installing some form of a time clock when the claims adjusters were switched from salary to hourly employees. In order to conform to the theories, Allstate needs to compensate their employees for the wages they have lost based on the managers' decisions.
"Allstate Corp. (ALL)" CNN Money. N.d. Web. 27 September 2014.
"Federal Appeals Court Certifies Class Action Against Allstate Insurance Company in Wage Case That Could Exceed $200 Million Dollars" CNN Money. Globe Newswire. September 2014. Web. 23 September 2014.
Jimenez v. Allstate. United States Court of Appeals for the Ninth Circuit, 2014. LexisNexis Academic. Web. 23 September 2014.