Leadership 7th Edition by Andrew DuBrin, Ann Fisher, Andrew DuBrin

Exercise 4

Central Florida Investments has become the largest privately held corporation in the Central Florida region. CFI operates dozens of businesses including hotels, insurance, magazines, real estate, travel services, oil, cattle, and Internet companies. Employees at CFI Westgate Resorts, an Orlando, Florida-based vacation properties company, have an incentive to get healthy. If they join in the company-wide weight-loss contest and succeed in reaching their goals, they could win cash prizes or a luxury vacation.
Inspiration for the contest came from CEO David Siegel, who himself lost more than 20 pounds a few years ago. "He put it on the radar," says Mark Waltrip, chief operating office at Westgate, adding that in the contest's first year, some employees lost up to 60 pounds.
Westgate was one of the first companies to take a hard line on smoking several years ago. Peter Cappelli, director of the Center for Human Resources at Wharton, was asked to comment on the anti-smoking campaign. He said that crackdowns on employees who smoke on or off the job were the "thin edge of a wedge… It has become socially acceptable to attack smoking and smokers. Will we see the same thing concerning obesity? The time is probably ripe for that."
In 2002, Siegel announced that all Westgate employees would have one year to quit smoking completely or else face termination. The company offered smoking cessation classes, nicotine patches, and other support, according to Waltrip, who said Siegel decided on the policy after a close friend died of lung cancer-and after he learned that Florida state law does not protect smokers. Another concern was the fact that smokers drive up health care premiums.
"If someone wants to smoke, that is their [he means his or her] choice, but when their choices impact their employer and fellow employees, then, frankly, we're not going to take it," says Waltrip. Since the ban on smoking was finally enacted in 2003, health premiums have increased at an average of 5 percent at Westgate, much lower than increases at other companies.
Siegel found himself at the center of controversy when he told a Florida TV station that Westgate would take every legal step to insist on healthy employees. "If you are an alcoholic, and we have the right to fire you, we will do that, too," he said. Bloggers and online commentators attacked Siegel for discriminating unfairly against overweight people and stepping too far into employees' private lives. A pregnant woman said, "Last time I was pregnant, I gained 40 pounds. How much time would I have to lose that weight before getting canned?"
According to Waltrip, however, Westgate is approaching the obesity issue more gingerly than Siegel's comment would imply. "Weight [he means being overweight] is complicated-it can be caused by disease-so before we go down that path of penalizing employees who are overweight, we need to understand and build a consensus around it." He says the company does not currently penalize overweight or obese workers.
What is your evaluation of the ethics of a CEO attempting to influence employees to avoid obesity?