The Whistle Blowers

THAT homespun homily by the turn-of-the-century soap manufacturer turned essayist hangs framed in countless offices and factories. It has long been accepted by both employers and employees as an accurate description of their relationship: loyalty in return for wages--love the company or leave it. But what if an employee has inside information about products that have hidden defects, factories that pollute, false advertising claims, price fixing, cost overruns or kickbacks? A growing number of workers are answering such questions by blowing the whistle on corporate misdeeds.

An as yet unidentified ITT employee slipped Columnist Jack Anderson the famous Dita Beard and Chile memos, and Anderson says that someone at ITT still feeds him information. Last week Anderson wrote that a high-level employee at Pfizer Inc. tipped him that the drug company's managers were urging workers to write their Congressmen to express opposition to a bill that would set up a federal consumer-protection agency; a worker at Ford apparently put Anderson on to safety defects in the company's "sexy" Capri compact. This month in Harper's, Kermit Vandivier, a former B.F. Goodrich data analyst, discloses that he told the FBI about fraudulent test reports on airplane brakes that he says he had been ordered to write; after the FBI started a Government investigation, Goodrich replaced $70,000 worth of ill-designed brakes for the A-7D Air Force attack plane. Recently Robert Rowen, a former nuclear control technician at Pacific Gas & Electric Co., filed 49 charges against the utility with the Atomic Energy Commission; he alleged that P.G. & E. deliberately violated Government safety regulations in handling radioactive waste. The AEC later sustained two of the charges and rebuked the company on several more.

Consumer Advocate Ralph Nader has formed an organization for corporate tattletales called the Clearing House for Professional Responsibility. The group will publish a book this summer about whistle blowers. It is hiring a full-time employment counselor to help them find new jobs if they are fired, and even has a special mail drop to receive anonymous tips: P.O. Box 486, Benjamin Franklin Station, Washington, D.C. 20044. In an obvious reference to people like Nader, General Motors' former chairman James M. Roche said in a speech last year: "Some of the enemies of business now encourage an employee to be disloyal to the enterprise. They want to create suspicion and disharmony. However this is labeled--industrial espionage, whistle blowing or professional responsibility--it is another tactic for spreading disunity and creating conflict."

Law and Morality. But is whistle blowing really disloyalty? In many cases a recalcitrant production-line employee is more valuable to a company than an accommodating vice president. By heeding early protests from within the ranks, a company can head off future Government investigations, damaging publicity or financial disaster from a product recall. General Motors, for example, could have saved millions of dollars if it had paid attention to the adverse reports of G.M. proving-grounds employees about its trouble-plagued Corvair. Says James Hillier, an RCA executive vice president for research and engineering: "Every manager knows that the direct cost of repairing a defect after a product is sold tends to be anywhere from 20 to 50 times greater than the cost of repairing it in the factory. The additional and indirect cost arising from loss of customer support is much higher."

When a company does something that may actually be illegal--falsifying statements of product quality, for example--an employee who is directly involved risks prosecution by remaining silent. A little-known federal law, on the books since 1790, compels persons who possess information about a felony to report it. In theory, federal and state laws against conspiracy and complicity apply to workers who aid and abet any illegal act committed in the name of a corporation. In a time when paid informers are in widespread use (see THE LAW), the legal position of employees who speak up will become an increasingly important question.

Beyond explicit legal liability, there are strong moral arguments for speaking up. For one thing, the argument that "I was only following orders" does not have sufficient force. "Every employee who knows of a situation in his company that is detrimental to the public at large must disclose it," says A. Dudley Ward, a high official of the United Methodist Church. "He must first make sure if he is right. If he is, then he must be willing to give up his job to raise the question--to the highest authorities within the company and if necessary to the public. The Judeo-Christian tradition dictates that a man's highest authority is God." Rabbi Balfour Brickner, a director of the Union of American Hebrew Congregations, cites the Old Testament to justify whistle blowing: "Thou shalt not stand idly by the blood of thy neighbor (Leviticus, 19:16)."

Going Public. Once a worker decides to speak up, how should he go about it? Ralph Nader advises him first to "appeal internally" to his superiors, moving up the chain of command until he produces results. If he runs into a dead end, and if the consequences of continued wrong practice "will result in further injury, fraud or other corporate or governmental crime against consumers," a worker should go public--by contacting the press, his Congressman or his Senator. Nader cautions dissident employees to resist resigning from the company if at all possible. "If you go," he asks, "who remains to fight the good fight?"

Mortimer Feinberg, professor of industrial psychology at the City University of New York, recommends five steps for conscience-stricken workers:

>> Report the problem to an immediate supervisor.

>>If the supervisor does not act, ask his permission to make a statement to the company president.

>>If the statement produces no results, write a letter to the firm's vice president for public relations, who often is the voice of the public within the company and may be able to move the president.

>> If there is still no reaction to the complaint, and the matter is too serious to forget, submit a written resignation specifying the reasons.

>> At this point it is perfectly ethical to take the case to the public. But make certain that the case is strong and well documented.

Documentation can be hard to come by, and an employee could well be wrong. Not having all the facts that top management commands, he might hastily charge a misdeed where none exists. But if an employee actively opposes corporate policy, how should a company react? So far, most such workers have been fired, demoted or forced to resign. George Geary, a U.S. Steel Co. sales executive in Houston, went over his superiors' heads to object to company officers about safety defects in pipe tubing that the firm was preparing to market. The officers investigated and withdrew the piping, but Geary was fired.

"Unless he belongs to a strong union," says Feinberg, "a dissident employee is highly vulnerable to decapitation." Worse, a fired whistle blower often winds up on an industry blacklist, making it difficult for him to find another job. Says J. Irwin Miller, chairman of the Cummins Engine Co.: "There are prices to pay for conscience."

Miller advocates that managers create a climate in which employees can feel free to criticize. One step might be to appoint a company ombudsman with power to act on employees' complaints and to start his own investigations. Another would be for a company's directors to extend protection against job loss or demotion to employees who come before the board with disclosures. Some consumer advocates have suggested that Congress legislate protection against reprisal for wage earners who report the unlawful acts of their company, or testify before a-court or Government agency.

As more and more employees tell tales outside the office or factory, more and more firms are bound to learn that it pays to listen. Edward A. Gregory, a General Motors body-shop inspector, went to Ralph Nader after managers had refused to acknowledge his warnings about a carbon monoxide leak in Chevrolet bodies and had transferred him to other tasks. When Nader and Gregory publicized the defect, G.M. in 1969 had to recall 3,000,000 cars. G.M. not only gave Gregory a $10,000 savings bond for the suggestion that helped repair the defect, but he was reinstated in his old job, and has since pointed out other defects that have led to the recall of about 4,000,000 more cars.

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