Kathleen Edmond, Best Buy's Chief Ethics Officer

There is currently a trial in U.S. Federal court based on allegations that a supplier defrauded Best Buy out of many millions of dollars. I don’t know how it will turn out, we will wait and see. What is particularly upsetting is the defense strategy of painting Best Buy employees in an extremely negative light with statements that Best Buy employees request gifts from vendors for their personal use - and similar unethical behaviors. This is not Best Buy’s culture. I am disappointed that the actions of a few rogue employees can tarnish our reputation and the honest efforts of the rest of us. Over the past five years in various settings throughout the company we have transparently discussed how to maintain good vendor relationships and weed out bad behaviors that may exist. With that same intent, we will find the lessons that exist in this very unfortunate incident and learn from them. I also ask that anyone reading this – employee, vendor, customer, or community member – who knows of behavior by a Best Buy employee or someone representing the company – that is less than honest, ethical, or appears to be self serving, please reach out to me or someone in the company so that we can correct the situation. For an individual or a company, one’s reputation is our most important asset. We cannot give let anyone act in a way that damages all of us. Thanks – Kathleen Edmond 612-291-7451 or kathleen.edmond@bestbuy.com or if you prefer anonimity, you may file a web report at www.bestbuyethics.com through our third party vendor.

In the early 1960’s, Yale University psychologist Stanley Milgram conducted a now-famous social psychology experiment regarding humans’ tendency to obey authority figures regardless of the ethical or moral implications. The basic premise of the experiment was to measure individuals’ willingness to obey an authority figure who instructed them to perform acts that conflicted with their personal conscience. In the Milgram Experiment, participants were instructed by an authority figure to perform an act that apparently inflicted intense pain (i.e., an electric shock) on innocent subjects.

Before the study, Milgram’s colleagues at Yale predicted that only about 1% of the participants could be coerced into inflicting the maximum level of pain (voltage) on the subjects. The vast majority of people, they believed, would resist the authority figure and refuse to subject their fellow man to such treatment. To their horror, however, 65% of experiment participants gradually succumbed to the authority figure and willingly applied what they believed to be massive electric shocks on the subjects. Though every participant exhibited uneasiness with the experiment, only one person actually stood up to the authority figure and refused to inflict pain on the subject. (Incidentally, no one was actually “shocked” in the experiment. The victim was an actor simulating intense pain, but this fact was not known by the unwitting participants. As far as they knew, the pain was real. Details regarding the “Milgram Obedience Experiment” are easily found on Google if you would like to learn more.)

The extreme nature of the Milgram experiment – and the participants’ willingness to go along – makes the implications to “ordinary” workplace ethics especially chilling. If the average person can be commanded by an authority to torture a complete stranger, what does this say about our ability to resist a wayward leader in the workplace? As Milgram noted in his 1974 article titled The Perils of Obedience:

Ordinary people, simply doing their jobs, and without any particular hostility on their part, can become agents in a terrible destructive process. Moreover, even when the destructive effects of their work become patently clear, and they are asked to carry out actions incompatible with fundamental standards of morality, relatively few people have the resources needed to resist authority.

1)    Do you have the courage to follow your instincts and act according to your values, even when an authority figure commands you to do otherwise? How do you know for sure?

2)    Do you have a network or “safety net” that can help you live by your values if/when you are pushed to do the opposite?

3)    Have you ever been in a situation where, looking back, you wish you had pushed back or refused to follow an order?

4)    Conversely, have you ever refused to follow an order you felt to be unethical or immoral? What was the outcome?

One of our employees recently asked Best Buy to decrease his hourly rate of pay from $10 to $9. When asked why, the employee explained that he had previously qualified for government assistance in securing health insurance. However, at a pay rate of $10 per hour, he now makes too much money to qualify for government assistance and has been dropped from the program.

On the surface, it appears to be a win/win situation; Best Buy can reduce the employee’s pay by 10% and the employee enjoys an improved standard of living. However, what are the ethical implications of this situation?

1)    Is it ethical for Best Buy to alter its pay standards upon request to enable individual employees to qualify for outside assistance? Are the employees’ motives any of our concern? If so, how?

2)    Does it matter that the employee asked Best Buy to decrease his pay? How is this different from an employee asking for a pay raise in recognition of their on-the-job performance?

3)    Does Best Buy have an obligation to help employees achieve financial independence? If so, where does that obligation begin and end?

4)    Consider an alternate scenario:  What if the employee’s primary objective was to decrease the amount of money paid out in spousal or child support? Would your point of view change on any of the above? If so, why?

The outcome

After careful consideration, we declined to decrease the employee’s pay for a number of reasons:

·         Best Buy pays employees for the job they perform and the value they add to our shareholders. We do not increase or decrease pay for any reason unless it is clearly and directly related to the market value of the work performed by the individual.

·         Though we seek to act in the best interests of our employees at all times, Best Buy will not participate in any scheme that is intended to assist an employee in obtaining goods or services under less-than-truthful circumstances. Far more appropriate options may exist. For example, employees who are eligible for Best Buy’s company-sponsored health plans but unable to afford the premiums may qualify for premium assistance through Medicaid or Children’s Health Insurance Program (CHIP). Best Buy regularly offers “special enrollment opportunities” under Medicaid/CHIP for employees who fit this criteria.

·         As a company, Best Buy is committed to helping employees make wise decisions regarding their overall financial well-being. Our shift toward automatic enrollment in the 401(k) plan for all employees hired after January 1, 2010, is one example of this commitment. However, intentionally enabling an individual employee to remain on a form of outside financial assistance actually contradicts this goal. Though we understand there are “break points” at which an employee may lose some form of government assistance as their pay (and standard of living) increases, we want to help employees accept these challenges, continue grow both personally and professionally, and celebrate their ability to live independently.

A Best Buy store employee was recently terminated for Inappropriate Conduct stemming from the theft of another employee’s property. The employee felt that he was treated unfairly and requested a Peer Review. The Peer Review Panel summary is as follows:

The terminated employee was a car electronics installer who worked in the “install bay” of his Best Buy store. The terminated employee admitted to taking another employee’s wire cutter tool from the install bay but claimed it was a mistake of fact. Specifically, he stated that he had made an arrangement to purchase a wire cutter tool from a fellow employee and thought the tool in question had been set aside for him by this employee. He took the tool home at the end of his shift. In fact, however, it was a different co-worker’s wire cutter. Though the terminated employee returned the tool when confronted, the other co-worker lodged a complaint that resulted in the termination decision.

When interviewed by the Peer Review Panel, the store GM explained the issue from the management team’s perspective. She stated that the terminated employee admitted to taking a tool from the store that was not his and had statements from the accusing employee and others to corroborate the situation. The HR caseworker’s recommendation for theft of property was termination, and she agreed. For his part, the terminated employee noted that employees work in close proximity in the install bay and it was not uncommon for someone to accidentally take (for example) another employee’s keys home by mistake, with no disciplinary repercussions.

After hearing all testimony related to the case, the Peer Review Panel overturned the termination decision. They noted there was no legitimate evidence that the terminated employee could have known the stolen wire cutters were not the pair being sold to him by the other employee. They also recommended that installers label and lock all tools to prevent further misunderstandings in the future.

Is the legal concept of “reasonable doubt” relevant to a workplace dispute like this? Why or why not?

What were the pros and cons of the “zero tolerance” approach taken by the GM?

How would you have handled the situation if you were the GM? Why?

A Best Buy store employee was recently terminated for a violation of Best Buy’s Inappropriate Conduct Policy. The employee felt that he was treated unfairly and requested a Peer Review. The Peer Review Panel summary is as follows:

The employee in question was terminated for entering a friend’s RewardZone information when ringing up other customers’ purchase transactions. In one situation, the employee used the friend’s RewardZone information when completing a transaction for an international customer (i.e., no viable U.S. mailing address or telephone number); proper procedure for such a situation is to enter the address and phone number of the store itself. As a result of taking these actions, the employee’s friend was credited with additional purchases under the RewardZone program and received an incremental dollar amount of RewardZone certificates.

When confronted with these allegations, the employee admitted to doing exactly as described above. He apologized for his actions and agreed to repay the amount of RewardZone certificates wrongfully earned by his friend (less than $40 in total). In his defense, the employee noted that:
• In all cases other than the international transaction, the customer making the purchase was a mutual friend of all involved, which made it “OK.”
• He knew of other employees in the store who were doing exactly the same thing.
• He felt that store leaders were “against him from the start” and were “out to get him.”
• He had used the friend’s RewardZone information for the international customer because he could not remember the store’s address/phone information.
• Three fellow employees were willing to testify as character witnesses on his behalf.

When interviewed by the Peer Review Panel, the store leadership team stood by its termination decision. They noted the employee violated several policies in the process of defrauding the RewardZone program. They also testified that his allegations of other store employees doing the same thing were investigated and no evidence was found to support the claim.

The Peer Review Panel chose not to accept testimony from the three character witnesses as their comments were irrelevant to the facts of the case. Based on the information presented and the testimony of both the employee and his store’s leadership team, the Peer Review Panel voted to deny the employee’s appeal and upheld the termination decision. In doing so, they noted the following learning points:
• Managers should review RewardZone terms and conditions and the Employee Discount Policy with employees frequently to avoid such situations.
• Employees need to be educated in how and when to communicate their concerns to others. An employee should never feel they are “at a dead end” if they perceive that leaders are plotting to have them fired.
• Employees should be trained on the proper procedure for handling international customer transactions where personal information is required.

1) The terminated employee did not appear to fully understand the wrongdoing in his actions. Is ignorance a legitimate defense in cases of ethical misconduct? Why or why not?

2) Was the amount of the fraud (less than $40) relevant to the termination decision? Why or why not?

3) What if other employees in the store were found to be doing the same thing, as was claimed by the terminated employee? Would that affect your view of the disciplinary action taken? If so, how?

A Best Buy store employee was recently terminated for violation of rules regarding the use of company vehicles. The employee felt that she was treated unfairly and requested a Peer Review. The Peer Review Panel summary is as follows:

The terminated employee held a manager-level position and provided in-home services for Best Buy customers. As such, she was provided with a company vehicle for use in the performance of her job. Per Best Buy policy, such vehicles are not to be used for personal errands and should not be modified in any way by the employee. It is also against policy to transport non-employee passengers in a company vehicle.

As part of an audit conducted by her manager, the employee admitted to using the company vehicle to pick up/drop off her children at various locations. Upon further investigation, it was also found that she had installed a radar detector in the vehicle and had used her company-provided gas card to purchase gas consumed on personal errands. In her defense, the employee noted that:
• She had been doing this for some time and no one had ever told her it was not allowed.
• She believed her manager was using this as an opportunity to terminate her, given that the employee had recently been placed on a performance improvement plan.

The Peer Review Panel interviewed the HR Caseworker who investigated the issue, asking specifically if termination was consistent with the outcomes of other, similar violations of this policy. The HR Caseworker was able to validate that termination was typical for first-time violations of Best Buy’s company vehicle policy. Furthermore, he noted the policy very clearly states that company vehicles and gas cards are not for personal use and that non-employee passengers are not allowed.

After hearing all testimony related to the case, the Peer Review Panel upheld the termination decision because the employee:
• Admitted to using the vehicle and gas card for personal errands.
• Claimed to be unaware of the policy but was, in fact, responsible for conducting similar audits regarding her own direct reports’ use of company vehicles.
• Was not entirely forthcoming in her answers, suggesting she used the vehicle for personal errands “a couple” of times when documentation proved it to be a common occurrence.

What are some of the hazards of an employee violating this particular company policy?

If an employee claims s/he “was never told” about a policy, can s/he still be held accountable to that policy? Why or why not?

Was your perception of this case influenced by the fact that the terminated employee was a manager who supervised other employees who used company vehicles? If so, why?

I have a great story from last week.  One of our teams was in training with a vendor regarding a new product that would create efficiencies in our advertising work.  During the course of training, two members of the team inadvertently accessed real data from two competitors.  As soon as they entered the competitors’ sites and realized they were seeing real data, they closed out immediately.  Some folks may have stopped there, as nothing improper happened.  However, these two employees saw greater possible implications to the incident.  They told their supervisor what had happened, and assured her that it was an accident and that no information was transferred.   The supervisor decided that she needed to inform the vendor so that 1)  the software flaw could be fixed, 2) the vendor had the opportunity to report the incident to their customers whose sites were accidentally accessed, and 3) we could be assured that no one was able to access Best Buy’s confidential information.  The supervisor then called the Ethics Office to see if there was anything she had missed. 

I love this story because it is such a great example of how – no matter our role – we are faced with ethics questions and opportunities every day, even in seemingly small ways.  In this situation each person decided that to protect  their personal integrity, and that of Best Buy  it was important to have the conversation with the supervisor or the vendor.  They also recognized that the companies whose information was accessed had the right to know that a mistake occurred, even though nothing happened and it would certainly have been easier to just ignore the incident.  And all of these decisions were made in the moment, without hesitation. 

It is impossible to develop and teach rules to 150,000 + employees for every possible situation that may arise.  However it is possible to teach our values, share a process for ethical decision making, be transparent about the fact that ethical behavior is expected, and encourage all of us to take a partner when we have a question that we don’t know how to answer on our own.   Stories like this show the best of who we are.  Thanks -

A Best Buy store employee was recently terminated for a violation of Best Buy’s Inappropriate Conduct Policy. The employee felt that she was treated unfairly and requested a Peer Review. The Peer Review Panel summary is as follows:

The employee in question used harsh language with a fellow co-worker in a team meeting. As a result of this event, she was asked to leave the team and work in a different department within the store. Shortly thereafter, the employee was terminated outright. Though she admitted to verbally abusing the co-worker in the team meeting, the terminated employee noted that no investigation was done to hear her side of the story. Specifically, she described a pattern of behavior that led to her outburst:
• She claimed to have had difficulty working with the other employee for some time. As an example, she testified that the co-worker had a pattern of initiating “joking” behavior with her and would then complain to management when she responded with jokes of her own.
• The terminated employee claimed that the other employee touched her inappropriately on two occasions and that this issue was not addressed by management.
• In her words, these issues brought the employee to her “breaking point,” triggering the outburst at the team meeting.

During the Peer Review process, the store manager described his version of events but acknowledged that he was not present when the outburst occurred. In support of his termination decision, he stated that the terminated employee admitted wrongdoing in a team “sit-down” meeting after the outburst and also signed a statement acknowledging she behaved inappropriately. However, witnesses to the outburst and team sit-down meeting told stories that contradicted the store manager’s version and the signed statement of wrongdoing was not in the terminated employee’s file. Furthermore, the eGO HR Support Center had not been engaged to investigate the situation prior to the termination decision. The manager stated that the HR Support Center’s help was not necessary for this case because he followed the same procedures as was recommended by the HR Support Center for a similar, unrelated matter.

After reviewing the facts of the case, the Peer Review Panel voted to overturn the termination and reinstated the employee to the same store, though in a different role. They also gave the reinstated employee a final written warning and required her to complete all relevant training courses pertaining to harassment, employee values and business ethics.

In explaining their decision to overturn the termination, the Peer Review Panel noted the following:
• The termination was not handled in accordance with Best Buy policy.
• No coaching was provided to the employee before her outburst; such coaching may have prevented the event from occurring.
• There were several inconsistencies in the testimony provided by store management.
• The investigation of the matter was one-sided; no attempt was made to hear the terminated employee’s side of the story.
• Store leadership did not engage in the proper partnerships (i.e., with the eGO HR Support Center) prior to making the decision to terminate.

1) What could store leaders have done differently to prevent the tension between these two employees from escalating?
2) Was it appropriate for the store manager to base his termination decision on a prior, unrelated recommendation from the HR Support Center?

3) What could the employee have done when she felt that her management was not addressing her complaints?

4) Key Learnings and Observations

Even though this seems like a straightforward allegation of  fair treatment involving just a few people, the effects are actually  much broader. Leadership sets the tone for the culture in the store. How leaders are perceived treating employees sets the tone for how the rest of the team treats each other and how they engage with customers.  Another reality is that when people feel as though they have been treated unfairly, or disrespectfully, they sometimes try to “even the score.”  In our world that might mean theft, damage to company property, or poor treatment of customers or others.  None of these things are acceptable or consistent with Best Buy values. We can each make a difference by living our values everyday, even in seemingly small ways.

A Best Buy employee terminated for Inappropriate Conduct was recently reinstated by a Peer Review panel even though the panel found evidence of Inappropriate Conduct in the employee’s actions. The Peer Review findings are summarized as follows:

A Supervisor-level Best Buy employee at a Best Buy store admitted to having service work performed on her computer in the store’s computer repair area without first paying for those services. The employee was also observed to spend several hours in the computer repair area during her scheduled shift.

When asked about the situation, the employee claimed that she intended to pay for the services after they were completed and had management approval to do so. Regarding the excessive amount of time spent in the computer repair room, the employee stated that she used that time to conduct performance review one-on-one meetings with the computer technicians. Neither of these assertions was corroborated during investigation of the matter.

At the time of the Peer Review, the above facts – as well as several other unrelated claims of Inappropriate Conduct – were used as justification for terminating the employee. However, documentation completed at the time of termination only reflected the above situation regarding the computer repair scenario.

Upon review of the case and prior documentation, the Peer Review panel overturned the termination and reinstated the employee. Though they found the employee had indeed behaved inappropriately in the way she: a) used company time; b) made personal purchases on company time, and; c) failed to pay for services at the time rendered, they did not feel termination was warranted for the following reasons:
• The multiple other instances of Inappropriate Conduct that were claimed to have factored into the termination decision were not found in any documentation created at the time of termination. Absent this documentation, the panel was only able to consider the scenario described above.
• The store’s leadership team needs to set clearer expectations of how Supervisors are to spend their time and should re-direct Supervisors as necessary. Lack of definition of the store’s performance management rhythm was cited as an example.
• Close personal relationships among the store’s leadership team appeared to unnecessarily complicate the running of the business.

What role did the lack of documentation regarding the other alleged instances of Inappropriate Conduct play in this case?

How did management’s failure to set clear expectations for Supervisor-level employees contribute to the situation?

One thing this case illustrates is Best Buy’s belief that both management and employees have a responsibility to treat each other fairly and communicate clearly.

This time every year we send out reminders to our employees that we do not accept gifts from vendors.  At the same time we  send letters to our vendors asking that they don’t send our employees  any gifts.  I usually get questions from employees, and even some vendors,  about why we we have this policy.  The reason is both simple and complex.  The simple part is that we choose vendors based on the quality and value of the product / service that ultimately is the best for our customers.   Period.  We never want there to be any thought or question that our decisions are influenced by personal gain on the part of the an employee – from the newest buyer to our most senior leaders.

The more complex reason is that fraud and corruption begin small and at the edges of a business relationship.   Very seldom do kickbacks and bribes start with huge exchanges of money or expensive product.  More often it starts with accepting something small here and there that creates a sense of entitlement, which then becomes an expectation.     It’s not a culture we want – and it is inconsistent with our promise to customers, vendors , employees and shareholders – that they can trust us to act with integrity.   . . . .   I guess it is not all that complex after all.   

What are your thoughts?