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Fidelity Fires 200 Employees Over Fitbits and Laptops
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By Marianne Jennings

5/8/2018

 

Fidelity Investments had two programs for its employees.  One was an offer for the company to reimburse employees who purchased Fitbits.  The Fitbit program was one designed to have encourage healthy living among employees.  The second program was one that wold reimburse employees 20% of the purchase price of $10,000 worth of computer equipment.  Fidelity discovered that 200 employees made qualifying purchases and submitted their receipts for reimbursement, but then returned the items and kept the Fidelity reimbursements.  Most of the 200 employees were located in the brokerage department.  In releasing a statement about the terminations, Fidelity explained that Fidelity has a culture of "compliance and integrity."  Sarah Krause and Rob Barry, "Fidelity Employees Fired After Alleged Misuse of Reimbursement Programs...  In some cases, employees submitted altered receipts in order to up the amount of their reimbursement. 

 

One employee had purchased a laptop and was given reimbursement.  Because he was getting married and had wedding expenses, he returned the laptop and forgot to pay back the reimbursement.  He said, “Was it poor judgment on my part? Absolutely. Do I think I should have been fired for it? No.”  Fidelity's position is that honesty and integrity are critical for customer trust and that misuse of company resources shows a lack of commitment to fairness, disclosure, and honest. The Fidelity code of ethics prohibits the use of company resources for personal gain.  The result was that the code of ethics provided for termination as a remedy for misuse of company property.  A broader inquiry is underway because of the concerns about other activities by the brokers.

 

When an employee violates a company's code of ethics, the offense is one that permits immediate termination.  In most other issues, such as performance, tardiness, and behavior, the employer must build a record in order to be sure that there is notice and grounds for termination.  However, breach of the code of ethics, because such a breach often involves compliance with statutes and company reputation, the termination can be immediate.  The employer need only have the proof of the breach of the code. For example, in the situation with Harvey Weinstein, the board was facing many accusations by actresses and some employees about Mr. Weinstein's behavior.  However, Mr. Weinstein would have been entitled to some form of internal due process on the allegations before he could be terminated.  Mr. Weinstein was ousted so quickly because the board was able to establish a pattern of expenditures by Mr. Weinstein in violation of the company's code of ethics on the use of company resources. Misuse of company funds is one of those automatic termination areas   In the case of Fidelity, internal audit had gone through all of the employees' reimbursements and found the irregularities in the 200.  The documentation was then used to question the employees.  Those employees without contradictory proof or an explanation were then terminated.  An investment firm, such as Fidelity, is dependent upon public trust and must take swift action against employees, particularly with employees such as brokers who have contact with customers. 

 

DISCUSSION STARTERS

 

Explain the standards for termination of employees.

 

How does termination for breach of the company code of ethics vary?