Neil R. Luebke's Commentary on "US Parts"
Author(s):
Neil R. Luebke
The main questions in this case concern misrepresentation in
a contract and quality control engineer John Budinski's course
of behavior relative to it. In several respects, therefore,
this case is similar to the earlier case "The Price Is Right?"
There are some differences, however. There is no opportunity
here to make a huge profit by the substitution of a slightly
inferior alloy. Moreover, unlike some other imaginable cases,
there is no problem of safety, inferior production quality,
overcharging, falsified test data, misrepresentation of
process, or valueless warranty. The issue is simpler and more
direct.
Let us follow the suggestions in the story and assume that
USAWAY touts itself as offering products that are completely
manufactured in the United States, that is, not only is the
product itself so manufactured but all fabricated components of
the product are manufactured in the USA. The problem with the
bolts, therefore, is not silly or incidental. If it became
known that at least a portion of a USAWAY product was
manufactured abroad, USAWAY's reputation and market share would
probably suffer serious damage. This damage might be the basis
of a tort action against Clarke Engineering. We do not know
from the case description whether the kind of product Clarke
Engineering is manufacturing for USAWAY could be manufactured
by a competitor with a different design not using the bolts. If
any such product has to have the special bolts and they are
available only through foreign manufacture, then all suppliers
are in the same situation.
It is unlikely that John Budinski caused this problem. More
likely, it was caused by persons drawing up the contract not
being sufficiently careful to check on the origins of all
manufactured parts despite USAWAY's insistence on this feature
of the contract. John, however, knows of the situation and now
is in the position of having to make a judgment concerning what
he should do with his knowledge. It seems obvious that John
should not keep this information to himself but should discuss
the problem with his superiors. Technically, the part will not
meet contract compliance requirements, and it is John's job
responsibility to see that standards for product manufacture
are upheld.
Although it may be unlikely that those who work on repairs
of the product will notice that the bolts are foreign made, it
is not impossible that it might be noticed. Moreover,
information on the origin of the bolts is likely to get out
through other channels. In fact, in the second portion of the
case description, such disclosure happens. There might be still
other ways the information could come to USAWAY's attention.
Clarke Engineering's supplier might incidentally pass on the
information to a competitor. Possibly the competitors of Clarke
Engineering already know that certain bolts are obtainable only
under foreign manufacture. So the assumption that USAWAY will
not find out about the bolts seems to be unfounded. Even if the
bolt's origin does not become immediately known to USAWAY,
there is still the problem that Clarke Engineering allowed a
product to go out that did not meet a fundamental contract
specification. Once known, this might put all future contracts
between Clarke Engineering and USAWAY in jeopardy. In short, if
John Budinski should say nothing or if his firm decides not to
make a change or bring the matter to the attention of USAWAY, a
significant downside risk exists for Clarke Engineering, not
merely with regard to this contract but with regard to many
future contracts.
It is not clear from our case description whether John has
to sign off on a verification report dealing not only with the
physical specifications of the product but also with the origin
of manufacture of the components. If John does have to sign
such a report and his superiors insist that the manufacture go
ahead with the foreign parts, John has put himself in serious
professional jeopardy. If he has to attest only the quality of
the manufactured product and is not required to validate the
domestic origin of all components, then he is personally in far
less jeopardy. At this point, he still has the obligation to
bring to the attention of his superiors the problem that exists
with the foreign-made parts. The responsibility of ensuring
contract compliance regarding the point of origin of the
components would then fall to someone else within the company.
John would have done what he could do in this case.
Does the situation merit whistleblowing? We have here no
threat to life, property, or physical well-being, nor do we
have embezzlement, thievery, or bribery. In short, the
obligation to hold paramount the safety and interests of the
public does not seem to be pressing in this case. On the other
hand, the other standard conditions for moral obligatory
whistleblowing may be directly met, providing John has
attempted to bring the case to the attention of his superiors
and they have decided not to make a change in the contract
relationship. There should be no difficulty in documenting the
foreign origin of the bolts, and should John bring the
deception to public attention, USAWAY would probably either
drop Clarke Engineering immediately or bring suit or both.
Should John find himself fired by Clarke Engineering for his
act of whistleblowing, it is not certain that his job rights
would be protected in the courts. Much would turn around the
question of whether Clarke Engineering's actions were criminal.
There have been a number of cases over the last 20 years in
which courts in various states have found for the defendant in
wrongful discharge cases when the worker was fired for refusing
to do something illegal. In the 1981 Palmateer v. International
Harvester case (421 N.E. 2d 876), an Illinois court found in
favor of the discharged worker who was fired because he called
public officials' attention to a theft inside the company.