Unilever and Johnson & Johnson: Recall Antiperspirant Products After Elevated Levels of Benzene had been Discovered (March 31, 2022)

 Case Controversy

It has been discovered that numerous media organizations have published news and articles in response to various corporations who have released aerosol items that have since been recalled due to the discovery of carcinogens. One company in particular that has experienced their products containing cancer causing chemicals is Unilever. Due to the presence of “benzene”, a cancer causing chemical, in several products, Unilever in March of 2022 had announced to the public that they had to recall everyday consumer products due to carcinogens being found in testing samples.  These products were recalled from the shelves of stores and pulled from online sales due to the concern that benzene, which has been associated with various types of cancer after long-term exposure, was present in a couple of commodities. During an internal investigation, high quantities of benzene were discovered product samples which lead to Unilever having to announce the voluntary recall of two different kinds of Suave 24 hour aerosol antiperspirants. Suave 24 Hour Protection Aerosol Antiperspirant Powder (4 oz. and 6 oz.) and Suave 24 Hour Protection Aerosol Antiperspirant Fresh (6 oz.), with an expiration date through September 2023, were the two commodities that had been affected and contained benzene (Albert, 2022). Unilever spoke out on their recall and stated “while benzene is not an ingredient in any of our products, our review showed that an unexpected level of benzene came from the propellant that sprayed the product out of the can” (FDA, 2021). The company also went on to say that the exposure to the quantity of benzene observed from review, on a daily basis is unlikely to be harmful to one’s health. However Unilever has initiated this recall that is voluntary for the two Suave antiperspirant aerosol products as a result of these findings and out of an excess of caution for the consumer (Torchinsky, 2022). When it comes to the question of how benzene could have exactly gotten into these aerosol products that individuals use on a daily basis, the company went on to say that “investigators believe it may be due to the manufacturing process and cross-contamination” (Yates, 2021). Suave products were only available in limited quantities in retail stores and online stores in the United States and were discontinued in October of 2021. 

Recalled Sauve Products (Image from Unilever Recall Page)

A month after the product was discontinued a class action lawsuit was filed against Unilever following a study made by Valisure. On November 3rd, 2021 Valisure released a petition requesting the Commission of Food and Drugs to request recalls and revise industry guidance. Valisure found that body sprays and found that 54% of the samples tested contained elevated levels of benzene and in some as much as 18 parts per million (ppm) (Valisure). Which is much greater than the FDA’s limit of 2 ppm if  “unavoidable to produce a drug product with a significant therapeutic advance” (FDA Alerts). The Suave Powder Aerosol products in 4 oz. and 6 oz. sizes contained an average of 5.21 ppm and 0.97 ppm respectfully. Suave Fresh contained an average of 2.30 ppm within tested samples. This is a huge concern for customer safety because the Environmental Protection Agency (EPA) has  “estimated that lifetime exposure to benzene at 0.4 parts per billion (‘ppb’), or 0.0004 ppm, will increase the risk of developing cancer in humans” (Valisure). Making these products harmful to consumers uses them everyday. Furthermore, Valisure also stated that if a contaminated product was used in the bathroom (20 sq. ft. with 8 ceilings) the air could contain benzene at 6 ppb. So if someone used a contaminated aerosol product everyday, in an enclosed space, they would dramatically increase their chance of getting cancer. 

Retailers had been informed the recalled products must be removed from their shelves. The company also stated that the customers that had been affected by these purchased products would be reimbursed by Unilever. Recalls regarding the chemical, “benzene”, was not the best news for Unilever nor is it a great look to have cancer associated with their products. On the other hand, this was great news for the general public that regulators were able to quickly discover the problem.

Not only have antiperspirants been recalled in recent months, but Johnson & Johnson (J&J) has also voluntarily recalled four of their sunscreen products. Specifically, Neutrogena® Beach Defense, Neutrogena® Cool Dry Sport, Neutrogena® Invisible Daily™ defense, Neutrogena® Ultra Sheer, and Aveeno® Protect + Refresh. All five of these products are aerosol sunscreen and all of them were found to have benzene contained within the propellant, similar to Unilever’s Sauve products. J&J also advises customers to do the same as Unilever, to stop using the products and dispose of them properly. Any customers with questions are encouraged to call J&J’s Customer Care Center at 1-800-458-1673.

Recalled Neutrogena Products (Image from ksat.com) 

Timeline of Events

Stakeholders

Any sizable business has plenty of stakeholders to help the business strive and grow. The responsibilities of a stakeholder include contribution of not only their money but more importantly time to better the company. In this case we are talking about the stakeholders involved with Neutrogena. Unfortunately over the last few years we have become very familiar with Neutrogena stakeholders. That being Johnson and Johnson(J&J). J&J works side by side with Neutrogena to promote sustainability. Main end goal is to maintain the competitive advantage over other rival companies. The current CEO to date for Neutrogena is Alex Gorsky and CFO Alexander Caruso.  Now the thing with stakeholders is that when the company is thriving they get a good amount of credit, on the contrary when the company is doing poorly they take most of the hit. As one could imagine during this time in which the recalls began a lot of it fell on J&J. Another major stakeholder that was involved are called external stakeholders. This includes doctors and other organizations that promote these Neutrogena products and ensure safe and healthy use. Now imagine how the doctors felt once they discovered that Benzene was in the product. This makes people lose trust in the doctors even though it shouldn't be. The stakeholders allow for the reputation of the product to remain positive and Neutrogena did just that and are still one of the top selling cosmetic companies globally.

Unilever stakeholders are different in comparison to Neutrogena, Unilever prides itself on having a strong relationship with many of its stakeholders ranging from customers to suppliers, shareholders, scientists, as well as trade associations. When conducting research it was difficult to find the exact names of these stakeholders, but  is it important to notice that Unilever makes a point to take into consideration all of them. The current CEO of Unilever is Alan Jope as of 2019 which is fairly recent. As mentioned above, many of the stakeholders' responsibilities are to grow the company as much as possible.  

The General Public is affected because Unilever and J&J  are very large corporations spread across many industries and are owners of same brand products like Ben & Jerry’s and Neutrogena. Due to a lack of quality control/product investigation there could be other products also containing potentially harmful products without anyone knowing. 

Individualism

In this class there were two theories of Individualism: Friedman's Individualism and Machan’s Individualism. Friedman’s Individualism states “The only goal of business is to profit, so the only obligation that the business person has is to maximize profit for the owner or stockholders within the law of the land” (Salazar). This theory does not take into the consideration the identity of the company and the motivations of investors and customers to choose socially responsible businesses. However, Machan’s Individualism does take this into account, stating that the primary goal of the business is to profit, with the law, BUT may have goals not aimed at profits (such as being a socially responsible business).

In the case of Unilever, under both Friedman’s and Machan’s Individualism Unilever used unethical business practices to gain profits because they were above the legal limit of benzene in their products. A class action lawsuit was filed, against Unilever, on November 12th, 2021 claiming that “as much as 5.51 parts per million (ppm) of benzene” (Shaak) were found in Unilever products. This is above the FDA’s limit of 2 ppm if the presence of benzene is “unavoidable” during the manufacturing of a product. The actions of Unilever are impermissible under an individualist point of view because they did not follow the rules & recommendations set forth by the FDA. While the lawsuit states that not all of the tested samples contained benzene, this shows that the presence of benzene is not “unavoidable” because some products were able to be produced without containing benzene. 

Let's say for example Unilever was below the FDA’s regulation 2 ppm in their product. It highlights one of the shortcomings of Freidman’s Individualism because investors are supporting a non-socially responsible business. An individualist would view Unilever’s actions as ethical because they are profiting within the law. However, Unilever did do the socially responsible thing by voluntarily recalling their product but this did occur 4 months after the lawsuit was filed. Back to the case at hand,  Unilever’s business practices were not ethical because they did not profit within the law.

Utilitarianism

Ethical theory played an important role in this decision, because the companies could have attempted to hide these findings in order to uphold the companies name and overall stature. As soon as the lab results came back immediate action was taken in order to protect the health and safety of its consumers. The two Suave antiperspirant arousal sprays were immediately recalled to protect the lives of the consumers. This case stated above can be linked to the ethical theory of utilitarianism. Utilitarianism states that all parties are treated honestly and with the utmost respect, as well as promotes happiness among the greatest number of people. “Utilitarianism is one of the most powerful and persuasive approaches to normative ethics in the history of philosophy”(Stanford). A Utilitarian wants everyone's happiness to count as the same, in other words maximizing the good. After conducting a sufficient amount of research one can conclude that even though the Unilever situation was extremely severe the company did everything to make sure that it had full transparency and despite  being in the wrong. When Unilever realized their mistake there made sure that the appropriate actions were taken in the benefit of all who were affected. Their biggest concern was the consumer, further explaining how the ethical theory of utilitarianism can be closely connected to this case. The company took the necessary precautions for the good of the people. The only aspect that wasn't fully explained was how the products get contaminated in the first place. Now the company could be hiding the aspect, however if what they say is true they might not have an actual answer.  

Kantianism

Unilever voluntarily recalled their two Suave antiperspirant aerosol products due to the potential of cancer-causing chemicals. From a Kantian perspective, this was the most ethically desirable approach to handle the situation for almost everyone involved. Like Kantian ethics in general, the Kantian understanding of business ethics encourages acting with respect toward all human individuals. Rational decisions must be ethical, according to Kantian business ethics theory. Being ethical refers to the rules or standards that govern proper behavior or performance. The decision you make should be driven by obligation rather than self-interest. Good will is at the heart of Kantian ethics. According to Kantian Business Ethics, the definition of good will is: “rationally which chooses to do what is right for the reason it is good” (Salazar). We, as individuals, all have value derived from our moral and cognitive abilities, and therefore we should all act in ways that demonstrate our gratitude for that value. When you’re in control of a company that services millions of human individuals, you should constantly be faithful and trustworthy to the customers who support you while also helping them. A company should not be exempt from ethical principles in general. Kantianism's four essential principles are to act logically, to assist others in making rational decisions, to respect individuals, and to be motivated by Good Will, looking to do the right thing because it is the correct thing to do. In this case, Unilever responded in accordance with its duty to protect its customers’ well-being by issuing a statement warning its customers who had purchased the product that benzene, a cancer causing chemical, had been discovered in the aerosol cans. Despite the fact that the amount of benzene identified on a daily basis is unlikely to be hazardous to one's health, they made certain to inform clients, be honest, and demonstrate that they care about their error. Unilever has ensured that the health and safety of individuals were prioritized, as well as the well-being of customers. 

The Categorical Imperative which is the Law of Rationality, is a test that determines whether a behavior is acceptable or unacceptable, is part of this theory. The Formula of Humanity, which asserts that using people as a method to get what you want is immoral because it exploits them, is one of the most important formulations of the categorical imperative. (Salazar) According to this ethical theory, Unilever passed the Categorical Imperative since they voluntarily recalled Suave aerosol cans for the health and safety of its customers, not for the sake for the company to make more money when they knew that quantity of benzene on a daily basis is unlikely to be harmful to one’s health. Unilever does not gain anything by recalling the product, if anything they are the ones that are losing and are the ones that actually care about their customers' health currently and down the line. After Analyzing from Kant's ethical theory, it is clear that Unilever actions were acceptable and that they had followed all four essential principles. Remember life is precious and we must protect it. 

Virtue Theory

Back in the 4th century B.C., Aristotle developed the virtue theory which consists of four main characteristics. These include courage, temperance/self-control, honesty, as well as justice/fairness. For starters, the virtue theory was established to help those differentiate between what’s good, and what isn’t good. Understanding that seeking a purpose and only doing what best to achieve that said purpose, results in virtue. The courageous characteristic takes a part in this case, representing the risk-taking and willingness to take a stand for the right ideas and actions (Salazar, 7). After the review of both Suave products, the recall notice explained that the benzene levels came from the propellant that sprays the product. Immediately, Unilever acted and issued a nationwide recall. Research concluded that the levels of benzene found were slightly elevated and only capable of causing little to no harm. 

However, the company chose to make the ethical decision, and take the product off the market anyways, even though there is a high percent chance that the benzene may have never been noticed, and or cause any problems. Moving on to temperance which is defined as “reasonable expectations and desires” (Soloman, 34), the case ties into this characteristic considering Unilever uses this knowledge to grant their customers with trustworthy products. People have faith in the companies they are giving their money too and expect nothing less than reasonable products that contribute to their purpose. Unilever ethically recalled their products considering it was unsafe, and only wishing to purchase safe products, is a reasonable customer request. Not to mention, Unilever also ethically chose to take the honest route and alert the FDA on its benzene findings as soon as it was discovered, remaining in agreement with their customers. Lastly, Unilever maintains justice to its company overall, remaining true to their business model that I previously mentioned above. Recalling their products was the ethical move considering they are still known for their high-quality products and maintaining their consumer’s trust.

Action Plan

There have been many companies in past months recalling their products because they contain human carcinogens. Two of Unilever’s Suave antiperspirant products contained elevated levels of benzene and J&J’s Neutrogena products also contained benzene. This is a problem because carcinogens are materials or substances that can cause cancer, which can lead to potential deadly health conditions. For example, from prolonged exposure to benzene it can cause the blood cancer Leukemia. Leukemia which can lead to weakened immune systems and weight loss. This is especially a problem when consumers do not know that the products contain human carcinogens. Since benzene was only found in the propellant that sprays the antiperspirant, in the Suave products, it should be very easy for Suave to remove the benzene from their products.

A new mission statement for Unilever and J&J would be very helpful in helping them recover from these controversies’. For instance, the new mission statement might be “We are dedicated to the health and safety of our customers and promise to produce safer quality products.” To go along with the mission statement these companies should also follow some core values going forward. Some values may be customer health, quality consistency, customer services, and trust. The companies will meet these values when releasing products that have no carcinogens within them (that have also been tested for common carcinogens and other harmful substances). Also, they publish documentation that there are no harmful substances in all of their products and even add a URL to the documentation on the product. This will build trust because customers will know exactly what they are buying. One step these companies can take to ensure they practice ethical business in the future is to have informative courses on Good Manufacturing Practice (GMP). GMP are regulations promoted by the US Food and Drug Administration under the authority of the Federal Food, Drug, and Cosmetic Act (ISPE). By having management and executives take this informative course it will ensure that Unilever and J&J have consistent quality products being produced. The last part of the plan could be to send out coupons, with the documentation, to customers to encourage them to buy new products. This plan will promote business profits and productivity because customers will know that the product they are purchasing is safe, healthy, and free of harmful substances and therefore be more inclined to purchase the products. Also, by including documentation of safety and quality of the product it will show that Unilever and J&J are trustworthy and are dedicated to being an ethical business.  

References

Albert, Victoria. “Two Types of Suave Aerosol Deodorant Recalled Due to Elevated Benzene Levels.” CBS News, CBS Interactive, 2 Apr. 2022, www.cbsnews.com/news/suave-recall-deodorant-two-types-aerosol-recalled-benzene/. 

FDA. “FDA Alerts Drug Manufacturers to the Risk of Benzene Contamination.” U.S. Food and Drug Administration, FDA, 23 Dec. 2021, https://www.fda.gov/drugs/pharmaceutical-quality-resources/fda-alerts-drug-manufacturers-risk-benzene-contamination-certain-drugs. 

FDA. “Unilever Issues Voluntary Nationwide Recall of Suave 24-Hour Protection Aerosol Antiperspirant Powder and Suave 24-Hour Protection Aerosol Antiperspirant Fresh Due to Presence of Slightly Elevated Levels of Benzene.” U.S. Food and Drug Administration, FDA, www.fda.gov/safety/recalls-market-withdrawals-safety-alerts/unilever-issues-voluntary-nationwide-recall-suave-24-hour-protection-aerosol-antiperspirant-powder#recall-announcement.

ISPE. “Good Manufacturing Practice (GMP) Resources.” ISPE, 23 Jan. 2019, https://ispe.org/initiatives/regulatory-resources/gmp. 

Salazar, Heather. “Does Business Ethics Make Economic Sense? .” Economics and Individualism Online Lecture, 5 May 2022, Springfield, Massachusetts. 

Shaak, Erin. “Class Action Alleges Carcinogen Benzene Detected in Certain Suave Antiperspirant Products.” ClassAction.org, Newswire, 16 Nov. 2021, https://www.classaction.org/news/class-action-alleges-carcinogen-benzene-detected-in-certain-suave-antiperspirant-products. 

Torchinsky, Rina. “Suave Antiperspirants Are Recalled Because Benzene Was Found in Some Samples.” NPR, NPR, 1 Apr. 2022, www.npr.org/2022/04/01/1090343033/suave-antiperspirants-are-recalled-because-benzene-was-found-in-some-samples.

Valisure, “Valisure Citizen Petition on Benzene in Body Spray Products” 3 Nov. 2021

Yates, Jacqueline Lauren. ABC News, ABC News Network, 21 Dec. 2021, abcnews.go.com/GMA/Style/pg-recalls-products-pantene-herbal-essences

                spice/story?id=81863689.

Ford: Unintended Acceleration Lawsuit (2013)

Controversy

Ford Motor Company logo

The Ford Motor Company was founded by Henry Ford in 1903. It produces automobiles and is located in Dearborn Michigan. As of May 2014 the Ford Motor Company is worth $64.51 billion (forbes.com). In the last couple years there has been a problem with some of the models Ford produces. This problem has led to a class action lawsuit against Ford. The lawsuit was filed on March 28th, 2013. This lawsuit was filed in Huntington West Virginia’s district court. The lawsuit has plaintiffs from 14 different states. From bloomberg.com it says “the lawsuit claims that Ford’s electronic throttle system can take control of the accelerator and leave drivers unable to stop the vehicle.” Ford has been adding a brake override system to its models since 2010, but the company has not added a brake override system to models that are older than that. The claim involves 32 different models of Ford, Lincoln, and Mercury vehicles that were made before 2010. This includes many of the company’s top models including the Ford F-Series, which is the second best-selling vehicle of all time according to the wallstcheatsheet.com.
The result of the flaw has caused numerous accidents, injuries, and even deaths. One of the lawyers for the plaintiffs stated "Ford's unfortunate history of unintended acceleration problems has been detailed at length in the public record. While our clients seek recovery for the lost value of their cars, they also want Ford to fix the problem so that no more people are injured and no more lives are at risk because of the documented accelerator problems with Ford's vehicles." Adam Levitt, a director with Grant & Eisenhofer, said in a statement. (usatoday.com) On June 12, 2013 the case was filed in West Virginia federal court. This increased the magnitude of the lawsuit. As a result of Ford’s failure to fix the problem, the models that are affected by the unintended acceleration are still on the roads today. This has caused the number of plaintiffs to grow and as of February 8th 2014 plaintiffs from over 30 states have joined in on the lawsuit. They believe that people from almost all the 50 states will be involved in the lawsuit by the time it goes to trial.

Stakeholders

Alan Mulally, CEO of Ford Motor Company

The stakeholders, or the persons who are directly affected by the business and its actions, are numerous. The first and most important stakeholder are the customers of Ford, specifically those who owned or previously owned one of the affected models. These are the stakeholders that are the most affected by the faulty electronic throttle system and the failure of Ford to add a brake override system. Next are the executives of Ford, these are the ones who are making the decisions and running the business. The third stakeholder are the people that are put in harm of the possibility of this unintended acceleration. This can be anybody on the road or near the road because most of the vehicles that have the problem have not been fixed and are still being driven today. The last stakeholder are Ford’s stockholders. In the event of a recall, lawsuit, or some kind of settlement, Ford’s stock will experience periods of decline, and little stability. The stockholders will suffer as a result of Ford’s inability to fix the problem of the unintended acceleration.

Individualism
The individualism theory which was introduced by Milton Friedman is about how a person is best suited to pursue their own desires without consideration for others. With a business perspective this means that a business’s only goal is to maximize profits for its stockholders. Not only is this their goal but it’s also their responsibility. As a result of this, Ford is acting ethically with respects to individualism. This is because they are not fixing the problem of the unintended acceleration which in turn is not costing them any money at the moment. This can change though, if the current case against Ford ends up going against them this could cost the business a large sum of money. Not only will they have to pay for damages and losses but also the cost of fixing the affected vehicles. This will also affect their reliability in a negative way and may result in losses of future customers. This would cause them to not be making as much profits as possible and directly go against the theory of individualism.

Utilitarianism

Ford's faulty electronic throttle system

Utilitarianism is the theory that supports the goal is to maximize happiness for the majority of people. Happiness or pleasure are the only things of intrinsic value. It is important to remember though that the end does not justify the means. In a business perspective this means that maintaining success should not come at the expense of others. Ford is directly going against this. They are maintain success at the expense other. Ford cares more about making a profit than the safety of their customers. After numerous injuries and even deaths Ford continues to allow the problem continue causing unhappiness for many people. This is unethical under the utilitarian view because they are not maximizing happiness for the greatest number of people.

Kantianism
The Kantian theory comes from Immanuel Kant who also explains how one should not lie, cheat, manipulate, or harm others regardless of the positive outcomes that come from these. There are four principles that Kantianism follow first is to act rationally, don’t act inconsistently in your own actions or consider yourself exempt from rules. Second is to allow and help people to make rational decisions. Third is to respect people, their autonomy, and individual needs and differences. Last is to be motivated by good will, seeking to do what is right because it is right. Kantianism is more focused on the consequences rather than the actions. The formula of humanity explains how the use of people to get what you want is wrong. According to the Kantian views, Ford was unethical because they are harming others as a result of their actions. Their actions of not fixing the affected vehicles unintended acceleration flaws are causing harm to others. They are putting the profits they are making over the harm that is being caused as a result of their failure to fix the problem. They are not acting rationally as other car companies who have had problems with their vehicles have recalled them and fixed the problems. This directly goes against the Kantian theory.

Virtue Theory
The virtue theory, which is made popular by Aristotle, is about how you must act rationally in order to live a good life. There are four important virtues for the virtue theory and these are courage, honesty, temperance, and justice. With these virtues in mind, Ford has not shown any of them expect for temperance. Ford did not have courage, as they did not stand up for what was right. This would have been to fix the problem with the affected vehicles and pay for damages occurred. They do not show honesty because Ford has not owned up to the situation at hand and have not takin responsibility for the problem. Last they have not been shown justice as they have not faced punishments for their actions. Based on these virtues of the virtue theory one can conclude that Ford is acting unethical.

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Toyota: Class Action Lawsuit (2009-2014)

Toyota Corp. logo

Controversy
The case of Toyota's class action lawsuit placing blame takes place starting in 2009, and ending recently in 2014. Toyota is a major motor corporation, Headquartered in Japan, and is currently recognized as the 14th best brand in the world. Toyota's mission statement claims that "Toyota will lead the way to the future of mobility, enriching lives around the world with the safest and most responsible ways of moving people”. Recently, however, as it is probably fresh in the minds of many, Toyota has fallen under scrutiny from both the NHTSA as well as consumers. Faced with a massive 9 million vehicle recall spanning from 2009-11 over faulty accelerator pedals, among other things, the employer of over 300,000, with 20,000 of those working in the United States, Toyota struggled to maintain a positive image with consumers, and some legal tactics in the handling of the class action lawsuit and subsequent settlement raised even more concern with the ethical state of being within the company.

When Toyota was defending themselves from the 200 plus lawsuits that were filed over the many deaths and countless injuries from the faulty equipment, they used a stance that focused not on the defective pieces, but instead the legal team worked to squarely place blame for the accidents on the drivers of the car. This stance was met with heavy opposition, unsurprisingly, because it was proven that the vehicles had defective hardware, and the pain and suffering already felt by those who lost loved ones was worsened with these false accusations. Once the case was settled in 2013, for a sum of over 1.6 billion paid out to those affected, those who received the money assumed that they were done being harassed by the Toyota legal team. In the settlement however, there was a provision for $100 million in "unclaimed funds", that didn't go to any specific party. Toyota intended this $100 million, or 6% of the settlement, to go towards "driver re-education programs". Toyota again stood behind there defense of its not me, its you, and blamed the injured or dead drivers of the vehicles that were equipped with defective equipment. This eventually was caught by mainstream media, exposing what Toyota had done to their loyal customers.

Accelerator trapped by unsecured floor mat in Toyota vehicles

Stakeholders
The stakeholders, or the persons who are key to the business and its actions, are multi-fold. The first and foremost include the customers of Toyota, specifically those who owned or previously owned a vehicle equipped with the faulty equipment. These are the people most affected by the actions of Toyota, and its stance on the settlement they received. Next in line are the executives of Toyota, the ones who are making the decisions in the legal defense as well as the provisions in the settlement. Thirdly are Toyota's stockholders. In the course of the recall, lawsuit, and subsequent settlement, Toyota stock experienced periods of decline, and little stability. The stockholders suffered as a result of Toyota's mismanagement of the vehicles, legal battle, and payout.

Individualism
The theory of individualism means that one is best served to pursue their own interests without making choices for others. In a business sense, this theory means that a business' only goal is to profit for its stockholders, and that is its responsibility. Even with that in mind, Toyota was not acting ethically according to individualism, because they allowed the business to become awash with criticism, ultimately hurting their value. Toyota wanted to maximize profit and maintain an image by asserting they were not to blame for the problem vehicles, but in the end this came back to haunt them, by hurting their image even further.

Utilitarianism
In the utilitarian theory, the goal is to maximize happiness for all people, while keeping in mind that the ends do not justify the means. For a business, this means maintaining success, but not at the expense of another. Toyota did the opposite of that, focusing more on an egoist perspective, maximizing their own happiness above all others. They were far more interested in their own image and profits to worry about what they were doing to their customers and eventually stockholders. Alienating those who had invested in them showed that they were unethical according to utilitarianism, because they were uninterested in how those who are so integral to their business felt about their practices and products.

Kantianism

One of many crashes caused by accelerator in Toyota vehicle

The Kantian perspective means that one should act rationally to fulfill a purpose. In simpler terms, to act ethically according to Kant, one must do what is right because it is right, not for any other reasons. Toyota was clearly unethical according to the Kantian perspective, because their actions were carried out because Toyota believed it would give them the best chance at reviving their tarnished image. If they had done the right thing because it was the right thing to do, it would be safe to assume they would not have been in the predicament they are in. Toyota knew exactly what had happened and what went wrong, and knew they were to blame, but made the choices for the wrong reasons, and therefore were acting unethically according to Kantianism.

Virtue Theory
Virtue theory is a theory that is very simple to understand, and contains four key virtues. According to virtue theory, you must act rationally in order to live a good life, and the four main virtues are courage, honesty, temperance, and justice. When Toyota went about their case and settlement, all of the virtues save for temperance were ignored. They showed no courage in hiding behind their legal team while they blamed victims of their own faulty equipment. The lack of honesty is all too obvious, with false statements made about drivers who lost their lives to defective pieces installed by Toyota. And the fact that this went on without question from any authority shows a lack of justice for those affected by Toyota's actions.


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Allstate: Bad Hands for Employees (2014)

By: Danielle Delano

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.

Case Description:
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.

Stakeholders:

Stakeholders are people who have an interest in a company's actions, typically because it affects them in some way. In this case, stakeholders include all levels of Allstate's employees, stockholders, and consumers. The claims adjusters are directly affected by the managers' actions because they lost pay when overtime was not reported. Other employees within the company are also affected because they may now be more wary about working for a company who have broken these labor laws; they never know if they will be next. Middle management, the ones who allegedly did not report the overtime, are affected because they are now at risk of losing their jobs and will now be known as unethical managers whether or not they stay with Allstate. The executives of Allstate are also considered stakeholders in this case because they have to handle the media, legal fees, and any negative backlash that comes along with this lawsuit. Stockholders now have to be concerned with whether or not this case will tarnish Allstate's reputation and cause the par value of the stocks to decrease. Lastly, the consumers are affected by the managers' decisions not to report ovetime. The ones who had claims adjusters working on their cases in California have to worry whether or not the employees still did their best work even though they were not being compensated properly. Unethical practices like this cause employees' morale to decrease, which can cause employees to decide to not produce their best possible work.

Individualism:

Allstate's (ALL) Stock Performance - September 2014

Individualism is the theory with the least ethical constraints that a business has to follow in order to be deemed ethical. The only requirements of a business is to maximize profits, as long as they are not breaking any laws in the process. The managers' actions did not make the company any more profitable than it already was. According to Individualism, the managers are actually stealing from the stockholders by taking bonuses that they did not work for. The actions have also broken four different laws; this situation would not be deemed ethical based on Individualism. In light of the case, Allstate's performance in the stock market during the month when this case was made public knowledge has not changed drastically. Although this could change when the case is actually presented and a verdict has been made.

Utilitarianism:

Utilitarianism focuses on the happiness in the long run of all involved in a given situation. The managers received short term pleasure by accepting additional bonuses, but this turns into pain as the claims adjusters have come forward with a class action lawsuit. Now, the managers' jobs are on the line. Even though their names have not been released yet, when they are they may be forever known as the people who harmed their employees. Chances are they will not be able to get another management position within a company unless they receive additional ethical training. Claims adjusters were cheated out of money they worked for, and according to a news article by Globe Newswire requesting overtime to complete tasks were considered a performance issue. This puts the employees under more pressure to get the work done on time, and they even skipped meals in order to do so. This brings employee morale down itself, but not being paid for work that they did only causes pain. On top of it, in order to receive money that Allstate allegedly owes them they have to go through the court system which takes time and is not the most pleasurable process. Employees did not receive short term happiness nor will this situation make them happy in the long term. Based on this analysis, this situation would also be deemed unethical in the Utilitarianism context.

Kantianism:
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:
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.

Conclusion:
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.


References:
"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.