BMW: Discrimination Lawsuit (2013)

Controversy

BMW Company logo

BMW is a world-renowned automobile company that has headquarters located in both Germany and the United States. BMW was first established in 1916 and continues to grow larger to this day. BMW is a company that has strong values and an internal mission statement in order to maintain their reputable company. They strongly promote equal opportunities and diversity among all of their employees. Establishing diversity within BMW is easy because they are an international business. They stand behind the fact that “it goes without saying that each employee is treated equally, regardless of their background, age, or gender, and is given the same opportunities.” BMW also signed the German Diversity Charter in 2011. This Charter states, “all employees should be treated equally independent of gender, nationality, cultural background, religion, or sexual orientation and identity.” BMW continually wants to support and gain new employees into their company as well. The number of employees the company supports continues to grow every year. In 2010, 2011, 2012, and 2013, there were 95,453, 100,306, 105,876, 110,351 employees respectively.
Even with all of this evidence about the importance of diversity and equality to BMW, there was a lawsuit filed against them in 2013 regarding discrimination. The Equal Employment Opportunity Commission, or EEOC, filed a suit against BMW claiming, “BMW fired and denied hire to class of employees who worked successfully for years.” The EEOC claimed that BMW used their criminal conviction policy as an excuse to have people fired. BMW worked with a company called UTi Integrated Logistics, Inc. (“UTi”). UTi would send their employees over to work in the BMW facilities to deal with warehouse distribution, transportation services, and manufacturing support. In 2008, UTi and BMW ended their work together. However, when the contract ended, the employees who worked for UTi at the BMW manufacturing facility needed to reapply to be BMW employees. Since these employees needed to apply directly to BMW, they had to go through all of the policies BMW has in place before hiring anyone. One of these policies is the criminal conviction policy. Of the 645 employees who applied 88 of those applicants failed the criminal conviction background check and were not hired. Unfortunately for BMW, 70 of those 88 were black applicants. The EEOC is saying that BMW used this criminal conviction policy as an excuse to not hire these employees. BMW has had this policy in place since 1994, and have enforced it on applicants with failed tests whenever necessary.

Stakeholders

Norbert Reithofer, CEO of BMW

When decisions of a company are made, there are many people that are directly and indirectly affected. The main stakeholders involved in this case between BMW and the EEOC include upper management for BMW who has set the policy for how employees are hired, the employees who were up for hire, UTi because the employees were previously theirs, the EEOC because they are the ones who brought forth this lawsuit, and current employees of the BMW facilities.

Individualism
Individualism is a theory introduced and supported by Milton Friedman. The main goal of businesses, stressed by individualism, is to maximize profits. Individualism stresses the fact that “spending money on resources, employees, and donations to causes is wrong because it is essentially stealing from the owner or owners of the company.” In order for BMW to maximize the profit for the company, they should not invest in the criminal conviction background tests. Those tests cost extra money that does not need to be invested on the employees. Furthermore, BMW spent € 5,614 (in millions) on wages and salaries in 2013. Individualism theory would see this as an expense that can be less. Hiring more employees, although helpful for them, would just add more costs for the company. Adding more costs would take away from profits, which is the exact opposite purpose of Individualism theory.

Utilitarianism

The EEOC logo

Utilitarianism is a theory made popular by Jeremy Bentham and John Stewart Mill. The main value of utilitarianism theory is to strive for the happiness of the majority. Companies need to remember that, under utilitarian theory, the company is not the only thing that should be taken into consideration when deciding if an action is ethical or not. The costs and benefits for all people involved in the situation need to be considered. Looking at the case, EEOC vs. BMW, from a utilitarian viewpoint needs to be done carefully. Of the people BMW did not hire because of failed criminal conviction tests, 88 in total, 70 were black. That means 80% of blacks were turned away, and 80% does not mean happiness for the majority. However, taking into consideration the total number of applicants, 645, only 88 were not hired. That results in 7.33% applicants not being hired, which means BMW did create happiness for the majority. All of the current employees need to be taken into consideration as well. It is BMW’s obligation to create a safe working environment, and, in order to maintain this safety, BMW does not hire any applicant who fails the criminal conviction test. The happiness of BMW as a whole is much more important than the 88 applicants.

Kantianism

BMW mechanics working on a company vehicle

Kantianism, supported by Immanuel Kant, encourages the fact that people should “always act in ways that respect and honor individuals and their choices.” One should not lie, cheat, manipulate, or harm others regardless of the positive outcomes that may follow. Kantian theory is focused on the consequences of the action/decision rather than the actual action/decision. It is important to have good reasoning in order for good intentions to be effective. Two main points need to be evaluated when following Kantian theory, which are "the moral permissibility of the action" and "the moral worth in the motivation of the action." The formula of humanity, that is associated with Kantian theory, says it is wrong to use people to simply get what you want. BMW strongly supports their use of criminal conviction tests. They want to make sure no one is being put into harm while being at their company. Giving this criminal conviction tests is BMW’s maxim-for-action, and since this policy as been in place since 1994, it is completely rational for them to make the decision to not hire the people who failed the screenings.If they had some applicants take the test and other not, that would be irrational.BMW is not using these people to get what they want. If they were they would hired the applicants regardless of the results of the tests. BMW is respecting the formula of humanity because they are treating every employee/applicant fairly and rationally, and, therefore, completely conforming to Kantian theory.

Virtue Theory

Virtue Theory, made popular by Aristotle, encourages people to have character traits that promote wellness within a society. In order to be a virtuous person, there are four primary virtues that one needs to portray: courage, honesty, temperance, and justice. BMW tried to implement all four into their business practices. For courage, it may be said BMW is lacking. They did not hire people who worked for UTi and very closely with them for years. They did fail the criminal conviction tests, but if BMW knew they were good workers, they should have had the courage to stand up and defend them. However, it can also be said that they had the courage to stand up for their company and the company policy that has been in place for years. For honesty, BMW was 100% honest in this situation. They defended their criminal conviction policy and were not afraid to say that this was the cause of the applicants not getting hired, while still promoting their diverse workforce. Temperance can be defined as reasonable expectations. It is shown through the criminal conviction policy that BMW explicitly states their expectations of their employees. They have had the same standards for their employees since 1994, so they have displayed reasonable expectations and justice for all employees/applicants.

References

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http://www.bmwusa.com/Standard/Content/CompanyInformation/Default.aspx.

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Background Checks." U.S. Equal Employment Opportunity Commission. June 11, 2013. Accessed October 2, 2014.

http://www.eeoc.gov/eeoc/newsroom/release/6-11-13.cfm

"Financial Statements of BMW AG Financial Year 2013." Accessed

October 13, 2014.

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O'Toole, James. "BMW Hit with Discrimination Lawsuit from EEOC."

CNNMoney. June 11, 2013. Accessed October 2, 2014. http://money.cnn.com/2013/06/11/news/economy/bmw-discrimination/.

Salazar, Heather. "Chapter 2: The Many Faces of Ethics in the Workplace."

In The Business Ethics Case Manual: The Authoritative Step-by-Step Guide to Understanding and Improving the Ethics of Any Business, 17.

"UNIQUE CORPORATE CULTURE." BMW Group : Careers Working in

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