Resolving Ethical Business Challenges

Lael was just hired by Best East Motels into their manager training program and was excited about the potential benefits after her graduation from University. Working part-time and going to school full-time was the norm for her, but the Best East job replaced her two part-time jobs. With this new job, she would be the one to assign work times. Her luck continued when she met her mentor Nikhil, who was the son of the owner. Best East Motels was a franchise motel chain in the United States. Owners bought into the chain with a $ franchise fee and paid for the construction of the motel. In return for the fee, Best East gave each owner a comprehensive package of marketing, management, accounting, and financial materials to boost motel success rates to over percent. In addition, Best East assisted each owner with groups of people that trained staff for every new job, from housekeeping to accounting. The new-hire training course for each type of employee was developed and based on the best practices within the industry. This particular motel had been in business for ten years and was seen as successful.
As Lael went through the manager training program, everything she heard was great. It sounded like Best East was a career path she would want to pursue long-term. Six months into her job, however, Lael started to hear strange rumors. For example, on the night shift she found there was heavy employee turnover and most were females. Lael began to investigate by scheduling herself onto several night shifts. One night, as she chatted with one of the front desk employees, she discovered the girl planned on quitting. She was seventeen and worked at this Best East motel for a year. “Why are you leaving?” asked Lael.
Her reply startled Lael. “I don’t want trouble, just my last paycheck, a good letter of recommendation, and that’s it.”
As Lael pressed her for more information, the seventeen-year-old opened up. She spoke about Nikhil talking suggestively about her to other employees and how he made suggestive physical gestures when she was around. She told Lael about other female employees treated similarly, and this always occurred during night shifts when Nikhil was on duty.
Digging a little deeper, Lael spoke to several former employees. Most were fairly young female employees. They told her essentially the same thing. For example, Nikhil would routinely make suggestive comments to female employees. In one incident under Nikhil’s watch, some male employees flirted with female employees, including undocumented workers. Nikhil reportedly sat there with a smile. They also told her Nikhil allowed customers at the motel to offer their room keys to female employees.
After a few weeks, Lael heard the same story from younger female employees and even some of the maids. Their responses to these situations were similar. They ranged from “Nikhil told me if I was older he would ask me out” to “I don’t want to make a big deal out of this because it might appear I’m a tattle tale.” Another common excuse for not reporting was that Nikhil assured them this was part of the motel business and was normal. Most employees were afraid to report on the boss’s son and put their jobs on the line.
Lael reviewed the section of the franchise employee handbook. It clearly stated sexual harassment of any kind would not be tolerated and should be reported immediately to the proper manager. Lael could tell from the manual the allegations against Nikhil constituted sexual harassment. While the Best East Franchise Corporation had no ethics hotline, Lael thought this could be a legal issue.
She knew putting pressure on the female employees to report the behavior of the boss’s son was problematic. Lael also felt that going to Nikhil personally about these allegations may not be a wise move. If the behavior was reported to the owner, it would become an official allegation and impact the motel’s reputation and image in the community, and she would be responsible for it. The things these women were saying had not personally happened to her yet.


– Why should Lael get involved in reporting if she has not experienced any of the allegations the other employees are making?
– What are some of the characteristics of Best East’s ethical culture that would create the current dilemma for Lael?
– What should Lael do to resolve her concerns?

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