Case Study 1 Discharged for Off-Duty Behavior



Case Study 1 Discharged for Off-Duty Behavior

The following case illustrates the off-duty privacy claim of an employee and management’s right to uphold the reputation of the company. Before his termination on Monday, May 6, 2014, John Hilliard worked as a senior sales representative for Advanced Educational Materials (AEM), a provider of high-quality educational books and supplies to junior and senior high schools. During his 12 years of employment, John was recognized as an outstanding employee with close working relationships with the schools he served. His sales record was excellent. John’s discharge resulted from what AEM claimed was a serious breach of its code of conduct for employees. On Saturday, May 4, 2014, due to a chance meeting between John and his manager, Jean Ellison, John was observed leaving an adult video store carrying what his manager described as pornographic magazines and an X-rated video. The following Monday, Jean discussed the incident with AEM’s vice president for sales and a representative from HR. All agreed that John’s off-duty behavior constituted a serious violation of the company’s code of conduct for employees, which read, in part, “Employee off-duty behavior in no way should reflect unfavorably upon the company, its employees, or sales of any educational materials.” AEM has traditionally held its sales representatives to high moral standards because the company sells extensively to public school administrators and teachers. At his discharge meeting, John vigorously opposed his firing. While he acknowledged making the purchases, he argued strongly that what he did on his personal time was “no business of the company’s” and his behavior in no way reflected unfavorably upon AEM or the sales of its products. Besides, he said, “The purchases were made as jokes for a stag party.”


1. Given the facts of this case, should John have been discharged? Why or why not?

2. Should the sales representatives of AEM be held to a higher standard of personal conduct than sales representatives for other types of organizations? Explain.

3. Should management have considered John’s past work record before deciding on discharge? Explain.


References: David J. Walsh, Employment Law for Human Resource Practice (Mason, OH: South-Western, 2007), Chapter 17. 5.

Jeffery A. Mello, “Introduction: The Evolving Nature of the Employment Relationship: Reconsidering Employee Responsibilities and Rights,” Employee Responsibility and Rights Journal 15, no. 3 (September 2003): 99.





Case Study 2 “Whole Foods Market faces Whole New Challenge”

In this chapter we talked about how hierarchical, command-and-control types of organizational structures are giving way to high-performing work systems—systems characterized by egalitarianism, knowledge and information sharing, employee empowerment, and reward and performance linkages. Such a system pretty well sums up Whole Foods Market, the world’s leading natural and organic foods grocer. Whole Foods started out in 1980 with one small store in Austin, Texas. Today it employs tens of thousands of employees in more than 350 stores in North America, Canada, and the United Kingdom. Whole Foods adopted many of the successful practices of the companies it bought as it expanded—especially those of Boston-based Bread & Circus, renowned for its fresh produce, meat, and seafood. “Whole Foods has been very smart about their expansion program, taking time to digest acquisitions before moving on to the next one,” says Darrell Rigby, a retail consultant with Bain and Company. Second, the company has stayed true to its vision. It works to ensure that all of its efforts and practices are externally and internally aligned with the following three principles: Whole Foods, Whole People, and Whole Planet. The “whole foods” principles relates to the company’s mission to provide customers the highest quality, least processed, most flavorful and natural foods possible. “Whole planet” relates to the company’s endeavors to protect the environment and nurture the communities in which it operates. For example, in addition to participating in a multitude of green initiatives, at least 5 percent of annual profits go to local charities. In 2013, the company made Ethisphere Institute’s “World’s Most Ethical Companies” list for the fifth time. The company’s “whole people” principle is arguably a huge part of its success. Whole Foods’ website points out that the grocer’s employees are the company and Whole Food isn’t “run” by executives and store managers but by in-store teams. Each team is responsible for one area of the store, such as baked goods, meat, poultry, and so forth, and is empowered to make product, pricing, and staffing decisions. This high degree of decentralization allows the stores to better tailor their offerings and services to meet the needs of the communities, which helps them be more competitive. The decentralized approach begins on the front end with hiring. As Whole Foods grew, it found that centralized, online recruiting left local stores awash with resumes but not much knowledge of applicants. Applicants can still submit resumes online, but now each store has its own human resources department that aids in hiring and recruiting and in-store kiosks where applicants can apply. Many interviews at Whole Foods Market are conducted by teams of employees who look for applicants who share the “whole food, whole people, whole planet” vision. Once an applicant is hired, he or she is assigned to one of the store’s teams for a trial period, after which the team members vote to determine if the person deserves a full-time spot on the team. Think of it in terms of the TV show Survivor, but in reverse in that newcomers have to be voted onto the island, or team. The same process is used at the corporate level for employees who want to join the firm’s marketing, human resources, finance, and IT departments. The voting is not done for entertainment or teambuilding purposes, though. It’s crucial because it affects workers’ paychecks. The teams are treated as separate profit centers and rewarded with monthly bonuses if their profits exceed a certain level. Consequently, nobody wants to vote in a slacker. (Talk about peer pressure.) Not surprisingly, the company does not have to do a lot of monitoring of its employees. They do it themselves. “We don’t have lots of rules handed down from headquarters in Austin,” John Mackey, the founder of the company and co-CEO, has said. “Peer pressure enlists loyalty in ways that bureaucracy doesn’t.” Speaking of bureaucracy, Mackey has also been quoted as saying that Whole Foods is a “social system” and not a “hierarchy.” He wasn’t kidding. In many companies CEOs earn literally hundreds of times what the average worker does. Not at Whole Foods. Mackey’s salary and those of other executives are capped at 19 times the average annual salary of a full-time employee. If he and other executives want a raise, they have to increase what employees are paid. Employees also vote on all company-wide initiatives, and full-timers get 100 percent of their health care costs paid for—under plans the employees have selected. And unlike most firms, employees own about 95 percent of the company’s stock options. Nearly 8 out of 10 employees say that the training Whole Foods offers helps them advance professionally. Employees are encouraged to pursue continuing education through the company’s online training portal or certifications such as the American Cheese Society Certified Cheese Professional exam, green recycling classes, cooking seminars, and work-related field trips. Invariably, Whole Foods lands on Fortune’s 100 Best Companies to Work For list each year. “I love working at Whole Foods, and I hope to grow with this company for years and years to come,” says one of its employees. “This company empowers me and makes me feel valued and valuable.”

Questions 1. Why don’t all companies treat their employees like Whole Foods does? Do you think they will in the future?

2. Can “eco-consciousness” effectively be incorporated into high-performance work systems?

Sources: “Celebrating Great Workplace Cultures,” Great Place to Work Institute (2013),; “Whole Foods Market Named to 2013 ‘World’s Most Ethical Companies’ List,” MarketWatch (March 6, 2013),; Gary Hael and Bill Breen, “Creating a Community of Purpose: Management Innovation in Action,” Harvard Business School Press, 2007; “Whole Foods Market’s Unique Work Culture and Practices,” ICMR (2006),; Frank Roche,

“HR Lessons from Whole Foods,” KnowHR,