The Des Moines Register reports on a jaw-dropping example of “no-tolerance” management at its saddest, and the astounding fact that it did not, in fact, occur at a an educational institution, but at a bank.
Wells Fargo Home Mortgage fired 68-year-old Richard Eggers because in 1963, when he was 18, he put a cardboard cutout of a dime in a Laundromat washing machine and was duly convicted of operating a coin-changing machine by false means. Since that time, after spending two days in jail (they were strict in Iowa back then), Eggers has been on the straight and narrow. He is a Vietnam veteran, and tells the press that he can’t remember his last speeding ticket. He has also been a loyal and effective employee of Wells Fargo for seven years. So why fire him over a stupid and trivial crime he committed when Kennedy was President, TV was black and white, Mary Tyler Moore was exciting male viewers in her Capri pants on the brand new “Dick Van Dyke Show,”and people trusted Uncle Sam?
Big banks like Wells Fargo think they have a good reason to fire low-level employees like Eggers since the issuance of new federal banking employment guidelines in May 2011 and new mortgage employment guidelines in February, 2012. The new, tough rules subject financial institutions to stiff fines—like a million dollars a day— if they the employ anyone convicted of a crime involving dishonesty, breach of trust or money laundering—obviously part of the “locking the barn door” exercise of regulatory over-reaction to the financial melt-down. Before the stricter regulations, banks ignored minor traffic offenses and some minor arrests. In other words, they could exercise common sense, proportion, fairness, and discretion. The rules, after all, were intended to get rid of untrustworthy executives with a record of serious crimes, not customer service reps like Eggers.
If you set out to design a case where all the features of a rule conspire to make its application unfair, you could hardly do better than Eggers’ dilemma. The Federal Deposit Insurance Corp. provides a waiver process employees can follow to show they’re still fit to work at a bank despite a past criminal conviction, but it takes six months to a year to work. An automatic waiver process is quicker, but only those who were sentenced to less than year of jail time and never spent a day there qualify. The FDIC did not include a “really stupid crime involving a cardboard dime” exception, and Eggers, who was jailed two days remember, doesn’t qualify for the exception that exists.
There was an alternative, of course. Wells Fargo could have done the right thing and left Eggers alone, and counted on Federal government regulators to do the right thing too, and not fine it. After all, the government is so reasonable about such things, is known for its efficiency and good judgment, isn’t looking for money, hasn’t been the source of inflaming rhetoric impugning financial institutions and hasn’t been at all hostile toward the banking industry.
So here’s your Ethics Quiz:
Is Wells Fargo’s conduct in firing poor Richard Eggers unethical, no-tolerance idiocy, or is the bank behaving responsibly under the circumstances?
Did I betray my point of view, mayhap?
No, I don’t see how Wells Fargo can responsibly avoid no-tolerance action in this case, when it is faced with large fines and an implacable bureaucracy overseen by people who blithely endorsed Occupy Wall Street. Would you risk a million bucks on the gamble that this time, the Federal government will be reasonable? If you were a bank executive, would you stake your job on the obviously correct decision to leave Richard Eggers be, knowing that if the Feds came knocking, your board would ask, “Let’s get this straight: you knowingly risked a huge fine for regulatory non-compliance for one low-level employee who we can replace in a heartbeat, on the theory that the Feds ‘would be reasonable‘ ?”
This is Bizarro World, friends. In an ethically warped world where nobody believes in ethics, compliance is everything, and the people in charge believe that all problems can be fixed by more regulations, what seems reasonable isn’t. In the business world, it is completely irresponsible, misfeasance in fact, to risk large fines on the assumption that regulators will not act as if they sat hard on their own heads. In the business world, risking big bucks to avoid being unfair to one employee is absolutely wrong. Managers cannot risk the business to be fair to one employee.
Or to put it crudely, if the guy that has you by the short hairs has no tolerance, you can’t have any either.
Facts: Des Moines Register
Source: SF Chronicle
Graphic: Engineer of Knowledge
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