Dave Carothers of CDF Presents Ethics Training To Over 250 Cubic Corporation Employees
More than 250 San Diego-based defense, transportation and corporate employees attended training meetings this summer as part of the annual Ethics Training that Cubic Corp. has offered for more than 20 years.
The key message of the training was that employees must avoid even the appearance of impropriety in their business practices, because even if they have committed no crime, it could still cost Cubic hundreds of thousands of dollars to explain that in court.
Employees attending the Aug. 3 ethics session were joined by four members of the Cubic Corporation Board of Directors, who attended to show their commitment to Cubic’s standards of ethical business conduct. The session was videotaped for eventual distribution to other Cubic sites.
“What we hope to do in these sessions is to sensitize you to the gray areas,” said Dan Jacobsen, vice president and chief compliance officer for Cubic Corporation. “We assume that the employees know right from wrong, or we wouldn’t have hired them. We want to instill in them a desire to call and ask for help.”
Presenting the Aug. 3 seminar were two trial lawyers: Carolyn Oliver, a former Assistant U.S. Attorney who now heads The Alliance, a legal practice that handles business contracts, negotiations and complex federal criminal defense cases; and Dave Carothers, managing partner of Carlton DiSante & Freudenberger LLP, whose areas of practice include labor and contractual litigation.
Carothers, who has a military background as well as extensive legal experience, outlined some of the ethics problems that most concern government regulators: antitrust violations, price-fixing, bribes to foreign nationals, insider trading and conflicts of interest. He said companies that break these laws can pay fines from $5,000 to $75 million, depending on size of the company and the nature of the violation.
If Cubic was only a U.S. corporation, complying with these laws alone would be a challenge. However, as Jacobsen stated, “the sun never sets on Cubic.” The company must also comply with the national laws of all the countries where it does business.
General guidelines for all employees worldwide are described in the Ethics, Standards of Conduct and Compliance section of Cubic’s Employee Handbook, which along with other ethics information is also posted on the Corporate Intranet. Jacobsen emphasized that even though not all employees worldwide are covered by U.S. laws, they must still adhere to Cubic’s employee policies.
Carothers observed that while many companies have ethics policies, those policies don’t hold much weight in a court of law unless the companies take “affirmative, proactive steps” to make sure employees are aware of and adhere to them. “They have to be used, they have to be part of your cultural blood. They have to be reinforced … revamped, revised and debated within a company,” Carothers said. “You can’t just put policies on the shelf and bring them out when a lawsuit’s filed. They’ve got to be a regular part of your work life.”
If an employee believes that an ethical principle or law is being violated, they should first raise the issue with their manager. If the manager does not address the issue, or if the employee is not comfortable discussing the issue with their manager, or is not satisfied with the manager’s response, they should contact Legal, Human Resources, Jacobsen or use the anonymous Ethics Hotline.
In addition to the annual ethics training, Jacobsen and the Corporate Legal Department are planning future workshops on international antitrust issues and the U.S. Foreign Corrupt Practices Act and similar laws of foreign countries.
Here are a few examples that highlight some of the “gray” ethical dilemmas Cubic employees may face:
Situation: You are a Cubic employee whose brother is the program manager for a prime contractor which has just awarded a subcontract to Cubic. The prime contractor is sometimes also a competitor to Cubic. While you have limited interaction with the subcontract in your job at Cubic, you do have some insight into the program. You attend a birthday party for your brother’s son and present him with the latest Buzz Lightyear action figure toy. While at the birthday party, your brother asks you if you have heard anything new about his program, and if you can explain why Cubic raised its price on a particular product used in the program.
Potential issue: Conflict of interest; giving a gift to a customer, or in this case, his family; discussing company-sensitive information with a competitor.
Situation: You are at a bar with two other engineers who are your friends. All three of you work for separate companies that design widgets. The widgets are different designs, but somewhat similar. During the course of the evening, the three of you discuss the different widget designs and devise a business plan to design and manufacture fidgets, a smaller but integral component of the larger widgets, at a substantially lower costs than the current vendors that you know of.
Potential issue: Conflict of interest; discussing company-sensitive information with competitors; violating Cubic’s secrecy and invention agreement.
Situation: You do business with General Gibson through your employment at Cubic. You also live near him and occasionally see him at neighborhood parties. The general’s teenage daughter sometimes baby-sits your children. One day, your brother-in-law offers you four free tickets to a baseball game. General Gibson is a baseball fan. Do you invite him to the game?
Potential issue: The general is an Executive Branch employee, governed by dollar limits on the value of gifts that he can receive from a single source. Even if the value of the tickets does not exceed the $20 U.S. limit, giving them to the general may place him in a compromising position.
Situation: You have a good friend and golf buddy who works for a competitor. You and your friend are both privy to confidential pricing information in your jobs. You and your friend regularly exchange emails not only at work, but in home email accounts. One day your friend sends a file to your personal account named “Prices_06.doc.”
Potential issue: Pricing is company-proprietary information, and sharing it with a competitor is a violation of the employee’s duty of confidentiality and a possible violation of U.S. trade secret laws.