The Impact of Employment Law and Practices on Business and Society: The Significance of Worker Voice

Abstract

This paper argues that employers should adopt practices that provide employees with opportunities to exercise voice. Time and time again, we see corporate scandals that could have been avoided if employees were encouraged to speak up when they saw problems in the workplace. Recent scandals include Volkswagen cheating on emissions tests and requirements and the Wells Fargo performance incentive scandal scandals that may have been prevented if employees felt safe reporting issues to their supervisors and if the supervisors were receptive to the information.

Moreover, employee voice opportunities have been linked to numerous positive psychological, relational and health-related outcomes, including improved justice perceptions, better attitudes, increased satisfaction at work, and improved performance ratings. On the other hand, suppression of voice can lead to stress, and loss of the senses of control and self-efficacy. Unfortunately, the current legal environment together with various provisions in employment contracts may negatively impact an employee’s willingness to exercise voice in the workplace.

Our paper discusses the importance and role of employee voice as well as some of the negative consequences associated with stifling voice. It then discusses the legal environment of employment-at-will in the United States, which may play a large part in stifling employee voice. Next, the significance, benefits and perils of whistleblowing as an aspect of voice are discussed and analyzed, and recent efforts to restrict whistleblowing are critiqued. We then offer proposals for positive business practices to encourage worker voice. The exercise of employee voice is important despite the restrictive legal environment in which employees work for the good of the firm, the employees and society.

Keywords: Employment Law, Voice, Employment at Will, Business Ethics, Whistleblowing, Law and Society, Business and Society, Management and Organizations

JEL Classification: J83, J88, K31, M14, D63, J24, J28, J48, J58