by Jonathan T. Howe, esq. | January 01, 2005

This fall I received an e-mail from a reader saying, “Help! I work for a company that doesn’t pay its bills, that lies and disputes every charge on the master account.” The essence of the message was: How do I blow the whistle on what I believe are unethical and maybe even illegal practices?
    The meetings industry is part of corporate America and as such is bound to have its share of problems involving such ethical issues. Every day, planners can ask themselves questions such as: Is it really so bad to infringe on a speaker’s copyrights, or to overlook that music license for a party, or to bend a few rules for the sake of an event?

So what are you to do? Whether you are a planner or a supplier, as an individual, only you can decide how to respond when you believe your business is engaged in unethical practices or, even worse, illegal activities. (Unethical, by the way, does not necessarily mean illegal.)
    Coming to the rescue of the whistle-blower is the Sarbanes-Oxley Act, or SOX. The act is officially called the American Competitiveness and Corporate Accountability Act of 2002.
    While many of the aspects of SOX relate to accounting and fiscal responsibility, two parts apply to all organizations, whether they are for-profit or nonprofit entities.
    The first is protection, making it illegal to punish the whistle-blower in any way even if the claim turns out to be unfounded provided the person has acted on a reasonable belief or suspicion.
    Hence, all organizations need to establish policies for handling employee complaints confidentially, encouraging employees to report any perceived or suspected infractions regarding finance or accounting. In the meetings industry, this also would include any type of issue relating to contracts, kickbacks, etc.
    Furthermore, SOX makes it illegal to alter, cover up, falsify or destroy any document to prevent its use in an official proceeding.
    Whether my e-mailer was witnessing illegal as well as unethical actions is a tough call. Definitely, attempting to dodge paying would be unethical. It might also be illegal if the lies and misrepresentations have demonstrably harmed the payee.
    Are these practices the result of management’s policy decisions? How major or minor are the possible infractions? How long will it take for word to spread through meeting suppliers’ ranks that the company she works for can’t be trusted?
    Chances are, word will get around quickly. This is a relationship industry; we live or die on our reputations. If you lose your credibility, or appear to be unethical, you are toast.

Written Words Talk
Legally speaking, we always come back to the contracts we sign. Spell out all details, including rates, deposits, payment schedules and dates certain actions are to happen. And cover all the “what ifs” attrition, cancellation, terrorism, public health and safety issues, as well as insurance, risk management and indemnification of the parties. After signing, be prepared to honor the agreement.
    When dealing with ethics, the key question is whether you can live with the action in question. One of the perennial yardsticks is to ask: Would you be embarrassed to see an article about the issue in question on the front page of your local newspaper?
    While that scenario might be somewhat rhetorical, it is nonetheless a question we need to answer for ourselves.

    To the reader who raised the issue: You should be protected by SOX if you challenge your firm’s actions, but I would recommend seeking independent legal advice on how best to proceed.