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I'm working on delivering a training module on conflicts of interest and professional ethics, and I got asked an interesting question:

Serina is an independent contractor working for both company X and Y. At the start of her employment, X made computer chips and Y made computer power supplies, and did not directly compete. Serina did not feel that there was a conflict and did not disclose to either employer that she was working with the other.

After a few months, Y decides to restructure entirely into a computer chip company. They are keeping this a secret as they re-vamp, and have asked Serina to stay on to help the transition.

Serina clearly has a conflict of interest now. She can't reveal this conflict to all parties, though, since Y wants to keep their new structure a secret. Is Serina's only ethical option to quit working at one of the two companies?

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  • I see this is a hypothetical question. We should be careful with them (see this meta post), as asking for clarification and improvements will eventually lead to more hypothetical content added... which can basically lead us anywhere. – DarkCygnus♦ Jun 26 '18 at 17:37
  • She doesn't have a conflict of interest just because the business changed direction. If Serina's job function is not directly tied to the line of business, there may not be a conflict. For example, if Serina works in an HR related role. – cdkMoose Jun 26 '18 at 17:48
  • @cdkMoose OP said: "and have asked Serina to stay on to help the transition" so I think they want her to oversee or help in this ... (that is why I don't like hypothetical q's too much ) – DarkCygnus♦ Jun 26 '18 at 17:49
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    Yes, sorry for the hypothetical. I'm teaching the lecture on ethics and these types of scenarios come up as students get curious. I think for the lecture itself I'm going to stick to real scenarios that have happened to my colleagues and myself, so that we can explain with certainty what was done and why. – Michael Stachowsky Jun 26 '18 at 18:24
  • @DarkCygnus, way too much info missing in this hypothetical, but there are job functions that could be valuable in transition that still aren't conflicted (again HR for example) – cdkMoose Jun 26 '18 at 18:40
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is Serina's only ethical option to quit working at one of the two companies?

Serina has several options, but they include more than just the ethical aspects of it.

If a non-compete agreement exists between her an company X, then quitting from company Y would be part of fulfilling that agreement. This assumes that company Y will completely into a computer chip company, and there is no other role that doesn't conflict with Serina.

When informed about the switch, Serina should also bring this up to her manager, explaining about the possible non-compete involved. However, it is likely that company Y already knows about this agreement (although your hypothetical scenario doesn't consider it), so most likely they will be the ones turning her down before proceeding with the switch.

Anyways, if company Y wants Serina to oversee or help with their transition, then clearly she will have a conflict. She will also be ethically, and perhaps even legally bound to decline overseeing such transition, but she can surely perform other duties that don't conflict with the agreement and her personal ethics. Speaking to her manager is the way to find if there is anything else she can do.

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