Unethical Employer of the Week: William Ernst

There has been an increase, it seems, in news reports about outrageously abusive, sadistic, unfeeling or generally unethical conduct by employers, either because the nation’s economic problems are bringing out the worst in people, or because I’m getting better at finding them. This story settles it: I’m establishing a new regular category, “Unethical Employer of the Week.” And there couldn’t be a more deserving initial awardee than William Ernst, the owner of a chain of QC Marts in Iowa and Illinois.

Ernst sent his employees a memo in March informing them that he was holding a “contest.” Employees were told to submit the name of the next cashier they thought would be fired. According to the memo, the company would soon dispatch secret shoppers to QC Mart stores looking to fire a cashier for violating store rules, such as by wearing a hat, talking on a cellphone, not wearing a QC Mart shirt, having a friend hanging around by the counter, and other infractions. Once a cashier was sacked, the contest would start over.

QC Mart cashier Misty Shelsky of Davenport, Iowa, her store manager, and other employees quit when they read the memo, finding it degrading. When Shelsky applied for unemployment benefits, Ernst challenged the claim, saying she had resigned voluntarily. The dispute led to a hearing beforeAdministrative Law Judge Susan Ackerman. Ackerman awarded Shelsky the benefits, and called the contest “egregious and deplorable.”

“The employer’s actions have clearly created a hostile work environment by suggesting its employees turn on each other for a minimal monetary prize,” Ackerman said.

Correct. If Ernst felt that he needed to remind employees about company policies, he could have reiterated that the store was serious about them. He could have asked that all employees help enforce the rules, and that they were obligated to remind non-complying colleagues that their conduct reflected badly on the store. He could have announced that he would be having hired customers periodically check on whether the policies were being followed, and that both store managers and non-compliant employees would be held accountable.

None of these measures are unreasonable. The contest, however, was threatening, disrespectful, calculated to create paranoia and to turn employees against each other. It was the tell-tale sign of a sadistic bully.
Misty Shelsky said that Earnst was the “boss from Hell.” I wouldn’t argue with her.

9 thoughts on “Unethical Employer of the Week: William Ernst

  1. The contest also creates bad incentives. It encourages employees to encourage other employees to break company policy. You can’t win if nobody you know is misbehaving.

      • It’s not intentionally devious. When you analyze any decision, you need to look at the possible consequences. Incentives and motives are extremely important, but they’re often overlooked. Think of it as the moneyball of business strategies. Once you start seeing them, they’re everywhere.

        http://mindyourdecisions.com does a good job of pointing out uses of game theory (an advanced branch of mathmatics that pretty much anyone can use) in everyday or unexpected situations.

  2. From Glengarry Glen Ross:

    We’re adding a little something to this month’s sales contest.
    As you all know, first prize is a Cadillac Eldorado.
    Anybody want to see second prize?
    Second prize is a set of steak knives.
    Third prize is you’re fired.

    Tagline: Lie. Cheat. Steal. All in a days work.

  3. I cannot see how this “contest” can affect the store in a positive way.
    In my opinion there are 2 possible outcomes of this “contest”:

    – The employees who feel that cannot follow these rules non-stop are going to resign (like Ms. Shelsky)
    – The other employees will become like robots and will not be happy to work in such work environment.

    In my opinion, the decision is not egoistic, since, there will not be any financial benefits for the store.
    It is also not connected to utilitarianism, care ethics or any other ethical theory. So, I simply cannot see the reasoning behind this decision.

    Can you see possible reasons for this decision ? Or do you think it was just not an appropriate decision ?

    • Sure:
      1) Stupidity. It is an abusive and inefficient way to warn everyone that non-compliance with policies will warrant dismissal.
      2) Lack of respect. A boss like this doesn’t care if employees are robotic or unhappy. He just wants them to do their job, and go home.
      3) Sadism. A boss like this enjoys creating anxiety, and gets his jollies from putting scorpions in a jar.

      There’s no ethical justification, but such people have no interest in ethics.

  4. I once worked for ceo who had a running bet with his brother on which employee would quit next. The CEO went out of his way to make life hell for the employees while his brother was always supportive and helpful. When the owner found out about the running bet he fired the CEO and reprimanded his brother for not bringing it to his attention.

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