Anderson's Business Law and the Legal Environment 20th Edition by David Twomey,Marianne Jennings

Exercise 6

James Owen was the general manager of Obron Atlantic Corp., a manufacturer of powdered brass, which is finely flaked metal used in metallic paints, brakes, and explosives. Trained as a chemist, Owen earned his MBA at night school while he worked in Obron's labs during the day. In 1985, he was promoted from the lab to management. During a business trip in 1986, a fellow executive from Obron's German operations, Bruno Dachlauer, told Owen that a price increase for the company's products would be coming in the fall. Dachlauer added that details of the price increase would have to be worked out with Obron's two main competitors based in the United States. Owen reminded Dachlauer that such an agreement about price was against the law in the United States, to which Dachlauer allegedly responded, "There are laws against speeding, too." Owen complied with the fall price increases but admitted that he began "cheating" by lowering those prices to win customers. He was then threatened by competitors. Following the threats, Owen went to the Antitrust Division of the Justice Department and explained his situation. The FBI wired Owen for his meetings. One taped conversation between him and his supervisor, Carl Eckart, was used in a price-fixing case filed in Ohio. The conversation is as follows:
Owen : Carl, can we go over this one more time?
Eckart : You (expletive) dummy. One more time. On fine powders, 30 cents. Coarse powders, 15 cents.
Owen : Are you sure Rink will go along with it?
Eckart : Of course.
In the course of a year, Owen taped more than 100 conversations involving internal and external meetings for the FBI and the Justice Department. Owen's activities were not revealed until the Justice Department served Obron with a subpoena for its sales records. Officers and directors of Obron and its competitors were indicted, and some entered guilty pleas. Owen, whose marriage of 32 years ended in 1993, said that his undercover work took a tremendous toll on him and his family. He said of his conduct, "I could see people being hurt, customers being cheated. My concern shifted to protecting the customer. Maybe that's not the fiduciary role of the general manager." Was what Owen did in recording the conversations ethical? Was it honest? What do you think of Owen's view of focusing on the customers' rights? Is his duty to his company even when the conduct is illegal?