Updated on 11.08.07

Should I Report Ethical Misconduct At Work?

Trent Hamm

This week, The Simple Dollar attempts to address challenging questions in personal finance by looking at both sides of the story and figuring out some of the factors you need to look at to make a decision.

It happens to most of us at some time or another. We spot someone at work doing something that we perceive as being seriously unethical, beyond the typical workplace behavior and antics. The question is, do we keep this information to ourselves, or do we report it to the appropriate people?

It’s not the obvious cut-and-dried answer that many of us might think that it is, because there are a lot of issues at work here beyond just the misconduct. Let’s look at both sides of the coin.

Report It!

If you see a serious ethical violation, it is your duty to report it to your supervisor. If it were merely something having to do with that individual alone, it might not be worth reporting, but ethical misconduct in the workplace reflects on the business as a whole. It can very quickly create workplace dissension and, in some cases, create a negative impression with customers and stakeholders.

The best way to handle it is by being direct and brief. Tell your supervisor simply and directly what is going on, and leave it at that. Don’t make a big drama out of it, and absolutely do not gossip about it in any way. Report it to your supervisor so that he/she’s aware of what’s going on and drop it unless something more is requested of you.

Remember, this is not about interpersonal relationships. It’s about the people who rely on each other in the workplace to maintain a level of professionalism and ethical conduct. If you can’t rely on that, the integrity of your entire workplace rapidly goes down the tubes.

Don’t Report It!

First of all, if you happen to see an ethical violation, there’s a good chance that it is none of your business anyway. If it actually is something that affects you, you can follow up on it by just verifying what’s going on, but if it doesn’t involve you, it’s really none of your business.

Second, reporting something that you oversee could reflect more on you than on the person or event you’re reporting. This is the tattling effect, and it quite often bites the tattler as hard or harder than the person doing the misdeed.

Also, you may have misinterpreted what you’ve seen. You just saw Dave from accounting carting off two boxes of printer paper to his car? It’s quite possible he’s just running that paper to the office across town, and by reporting it, all that happens is that you look like a tattling fool.

Together, these add up to one clear thing: don’t spend your time reporting things you see others doing. Focus on being the best you can be at the things you’re responsible for and make sure that your bases are covered. Ethical slips of others are for that person and their supervisor to work out, not you as a third party.

My Take

For most potential ethical violations I’ve seen, the benefit of correction is simply not worth the cost of reporting it. If I witnessed someone from another department carting off a bunch of printer paper and loading it into his car, I’d shrug my shoulders and ignore it. If that person is thieving paper for personal use, they’re going to get caught by other means soon anyway – and if there’s an ethical reason for it, I look like an idiot for reporting it.

The exception to this is clear misconduct that can cause a serious detrimental effect to the company as a whole. If I were to witness someone changing numbers on an SEC filing, for example, that would be well worth reporting.

If you’re going to report an ethical problem at work, ask yourself whether this situation is really detrimental to the entire organization if the worst case scenario you envision is true. Dave from accounting stealing some printing paper? That’s not going to be a big deal, even if it’s flagrantly unethical. Joe editing SEC filings? That could bring down major parts of the company and is worth mentioning to someone.

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  1. dong says:

    Nobody likes a rat!

    I agree it really depends on what the violation is. Stealing office supplies while not good, I’m not sure is worthy of a discussion with the CEO. I think if there’s a culture of unethical behavior in the company, it’s time to look at other lines of work. Ultimately the lack of ethics in business dealings comes from the top…

  2. krylenko says:

    In Don’t Report It, you’re conflating “definite violation” and “potential violation”. Of course, don’t go running to a supervisor as soon as you see something you don’t understand.

    But not reporting a clear violation could reflect a lot worse on you than being seen as a tattler. You could be seen as an accomplice, or lose your job simply for violating company policy to report suspicious activity.

    I’m also not convinced a typical employee is a great judge of the seriousness of a given violation. If you noticed that a server’s IT security precautions didn’t comply with company policy, would you also know how sensitive the vulnerable data was, or be able to predict the consequences of a breach (including negative publicity and the effect on the company’s reputation and/or stock price)? Maybe, maybe not.

    To use your printer paper example, how do you know those boxes contain blank paper and not evidence of illegal activity that’s being removed for destruction? It’s certainly happened before.

    There are ways to get more information before deciding to report — talking to colleagues or even asking the “culprit” in a polite way. And if you say something, and it’s ignored, there’s no need to make a federal case of it.

    Of course you always have to weigh the cost, including the risk of blowback. But doing the right thing (not to mention acting according to the policies you no doubt signed upon hiring) is definitely part of professionalism.

  3. Overbilling is a problem where I work but like Dong mentioned, no one likes a rat. You should NEVER report it directly to the supervisor. I have very little respect for people who tattle.

    Talk to the person nicely or leave an anonymous note suggesting that they temper the unethical behavior and sign it “concerned individual”.

    Of course, it would be a different case if the behavior had the potential to cause major financial or bodily harm to someone or something.

  4. jake says:

    I think the message is that you need to look at things one at a time.

    I know a lot of people who take work related items for personal use. Like taking home a box of paper clips or a box of pens. That’s stealing but then are you really gonna go out and tell someone? What if the boss had told that person in private that he was allowed to? Then you come off as someone who is just looking for a way to get people in trouble.

    If i see sexual harassment for instance I would mention it to a supervisor, but say it in a professional manner. “Bob is acting inappropriately around coworkers and it is something you should look into.”

    I have ran into users at work who have downloaded loads of pornos on to their computer and we’ve had to confront them. It was embarrassing for everyone but it is something that had to be done.

  5. Don says:

    Everyone raises good points. About risking looking like a tattler: most companies of significant size have a way to report ethical violations anonymously, such as a designated ombudsman.

  6. Mike says:

    I also agree that nobody likes a rat. It is best to address the person directly, in a non-threatening manner. Politely asking what’s going on will gain you a lot of points with the person. They may be defensive at first, but when they realize you’re not automatically jumping to conclusions or running to tell the boss they will come around.

    Often times it may be that you didn’t see what you thought you saw, or there is a valid explanation. In other situations, the person may just not realize how unethical the behavior seems to an onlooker, and may change their mind.

  7. Things may not always be as they appear. Many companies have resources dedicated to enforcing company policy. Suggest not to involve oneself.

  8. shadox says:

    I think you strike the correct balance. After all, we are not the ethics police. I make sure that my team acts ethically, and will definitely report any serious violations that have the potential to imapct the organization as a whole, but on the small stuff it’s simply not worth the trouble.

    The only exception: if I notice one of my direct reports acting unethically, I will always call him on it. My direct team, is my direct responsibilities. Let other people deal with their own small issues.

  9. John says:

    OK, while I agree that no one likes a tattle tale, rat, or tout – There is a very fine line between ignoring something because that is the easier path and stepping up and pointing it out.

    I have always believed that whenever possible one should confront the individual and ask them. Most people when confronted about their misdeeds will be shamed into better behavior. Then you are not tattling on anyone but addressing your concerns directly with the culprit. It takes a but more courage to confront them directly but it is IMHO the right way to handle it.

  10. KoryO says:

    Even if it is flagrantly bad, like out and out lying on legal documents or child molestation, and you decide to report it, be sure you have another job lined up somewhere else. Chances are at least one of the guilty party’s buddies/superiors is going to go out of their way to retaliate. It’s a no-win situation for you.

    Sign me: Been there, Done that, Got the T-shirt lying around here somewhere…..

  11. BigRed says:

    I work for a large government contracting company, and we have mandatory ethics training annually (with a test at the end). They are fairly clear on what is and is not an ethics violation, and they give us a number of ways to report it (anonymous hotline, ethics officer, management chain, etc.).
    I personally had to use the Ethics procedure a couple of years ago–my direct supervisor (that’s a scary situation) was trying to take our entire division to another company, and directed us to submit our resumes to that company, and also to tell our current customers that they should cancel the contracts we were working on under Company A (so that we’d all get RIF’d because of loss of coverage), and then re-issue as a sole source contract to Company B. This was clearly a problem, so I had to act. The management confirmed it with other employees, and then invited the supervisor to come in and either fall on his sword or be pushed onto it, so to speak.

    And yes, the “reward” for me (as KoryO warned above) was to be marginalized to the point that I and my team moved into another division of the company. However, this seems to be working well for us (1 year later), and ultimately, I can sleep at night knowing that I did the right thing, even if it was a major embarrassment to upper management.

    Just to follow-up: later, I told my folks how much their moral guidance was appreciated–it was never a dilemma for me to do what needed to be done in this situation. I know it meant a lot to them to see evidence of their own ethics in action; as a mom myself, I know it would mean the world to me to have a kid do the right thing.

  12. Allison says:

    I work for an electric utility company. After Enron and with SOX, our company set up an anonymous hotline for employees to call and report ethical violations.

    I would and will report anything I think is suspicious. I don’t want my company to be in the papers for ethical violations. It is being increasingly important to be transparent in the business world, which I think is a good thing, especially with all the taint goods issues going on. One would hope that the workers at those toy companies would feel comfortable in reporting ethical issues regarding these products.

    In your example with Bob and the boxes of printer paper, in working with Bob you will learn his character. If he has bad characteristics, then I would be more willing to not give him the benefit of the doubt.

  13. Peter says:

    While this is a difficult subject, just look at any case of spying going on, either industrial or governmental, and you’ll often find the spies count on exactly this type of attitude. They’re nice folks (most are charmers), you see something, you ask them about it, they have what appears a reasonable explaination or they didn’t know they were doing something wrong and swear it won’t happen again and thank you for pointing it out, and then it continues regardless. In working with “Bob” and his printer papers, he may be counting on his nice character to get away with things. I know you can’t be paranoid, but be observant.

    I had a friend who’s team had a guy running a business out of his cubicle for years. He was sharp enough not to make it obvious, but over time it became so. But since he was such a nice guy, no one wanted to blow him in, until he reached the point where other people were pretty much carrying him and got sick of it. I don’t believe it should have gotten anywhere near that far before he was reminded he needed to do his job.

  14. Dan says:

    I worked for a company that had a policy that I wish more companies would adopt.

    Every year, managers had to fill out a statement detailing any violations of company policy that they were personally aware of. This form went to your supervisor where they were then discussed, sometimes redrafted, and filed.

    While this didn’t stop all ethics violations (or even get them all reported) it did make for a regular communication with your boss (and your direct reports) about ethics issues. Once that communication starts, it makes for a much easier pathway when you DO see violations.

  15. Anon says:

    Wow. I’m terribly shocked. “No one likes a rat?” Grow a moral backbone. How about no one likes a thief/harasser/book-cooker. Obviously all of your companies are doing a terrible job with training you on on ethics and their Code of Conduct. Or if they don’t have a Code, they need one, and fast. I work in the ethics and compliance industry. If a company is worth it’s snuff, they will require all employees to report actual and SUSPECTED violations. Failure to report is grounds for discipline and often termination. In addition, retaliation against an employee who reports a violation is forbidden. It’s not up to you, the individual employee, to make a decision about what is a big violation and what is a little one. If everyone steals one box of paper, that adds up. And if everyone fudges just one expense report, it adds up. A company that tolerates a culture of unethical conduct is on a short path to destruction a la Enron and Arthur Andersen. If your company does not have an anonymous hotline and you don’t want to be the “rat,” leave an anonymous type written none on the HR desk. Or make a fake email at hotmail and email the CEO. Just speak up.

  16. Caeli says:

    My opinion is that looking the other way just promotes unethical behavior. Everyone draws the line in a different place. Some people may feel that looking the other way when seeing a coworker take office supplies isn’t wrong, others may feel that blatant sexual misconduct towards others in the workplace is “none of their business”. It’s best to err on the side of caution. If you are scared of being labeled by coworkers who apparently haven’t matured since middle school, there are always ways to report immoral behavior anonymously. For example, if there is not a process already in place for this you could type it in Word and print it. Then mail it to their attention without a return address.

  17. Carol says:

    Someone I know use her FMLA to get a tatoo. It upset me but I did not tell and this week this person is no longer with our company

  18. Ann says:

    I do so agree with KoryO’s comment “if..you decide to report it, be sure you have another job lined up somewhere else.” I worked as a chef at a hospice (which I thought would want to be totally above board because of donations), and noticed that my co-chef was doing a little shopping for herself. I told her to never ask ME to buy anything for her personal use. When she was up to over $100 of fine chocolate/week for her baking business, I collected receipts and proof that she was selling her products for her profit – presented it to HR and upper management. End result – neither the upper management contact nor myself is employed anymore.
    Stealingn from (close to) dead people and grieving relatives – this is America people, no one cares.

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