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Pretexting is the legal cause celebre at least for this week. The Attorney General of California (a male) has indicted the former Chairman of the Board of a major corporation (a woman) because a subcontractor hired by a private investigator to find who was leaking confidential Board of Director discussions hit pay dirt and outed the culprit (a male). The subcontractor claimed to be someone other than who he was to obtain telephone records of newspaper reporters and the current Board member. Strangely, NOW (the National Organization of Women – formerly an organization which needed no introduction) has remained silent in the face of the take down of the management of the most woman run major corporation in America. Its CEO, its General Counsel, as well as the Chairman of the Board were simultaneously and at one time all women.
Perhaps NOW’s silence is explained by the long struggle and success of civil rights activists and their usual allies labor unions to legitimize "pretexting." Until the recent pretexting scandal broke, pretexting had been used against corporations rather than against corporate insiders. And while corporate America complained bitterly, the media generally applauded the use of pretexting to uncover allegations of race discrimination or to get union organizers infiltrated into a non-union workforce.
The civil rights community and big labor were able to achieve judicial sanction for the use of pretexting in a series of cases. Those in government who have sanctioned pretexting run the gambit from bureaucrats at federal agencies all the way to the members of the Supreme Court. In the process state laws prohibiting fraud were swept aside by the pre-emptive force of federal law. Even today bureaucrats federal agencies debate and urge the use of pretexting against corporate America.
Big labor was among the first to seize on the use of pretexting in its war against corporate America. It dispatched paid union organizers to non-union workplaces with instructions to get hired and to organize. Not surprisingly corporate America reacted to the knowledge that it had hired a mole by discharging the organizer. The National Labor Relations Board, the federal agency charged with setting national labor policy within parameters established by Congress, promptly held it was illegal to discharge the union moles. Not willing to take the requirement that it employ individuals trying to simultaneously serve two masters, corporations took the issue all the way to the United States Supreme Court.
The Supreme Court not unexpectedly found that union moles were protected by federal labor laws and held it was unlawful to discharge them. Town & Country Elec v. NLRB, (1995). The decision was not unexpected because the Court at the NLRB’s urging had held an employee who had lied to his employer and then lied under oath during a federal proceeding had not forfeited his job. ABF Freight v. NLRB, (1994). The basis for the Court’s decision on the union mole ostensibly was grounded in the language of the National Labor Relations Act. That Act makes it illegal to discriminate against an employee, and since the union mole was an employee (he was working on the job and getting paid) his discharge was unlawful.
The reach of this decision has since broadened. A union mole who submits a false resume or falsifies his employment application (a double pretext) cannot be terminated for the falsification (as it relates to his status as a union organizer) even if state law prohibits falsification. That case came before the Court of Appeals in Chicago. It decided the falsification by the pretexter could not serve as a basis for termination since the falsification was not as to a material fact. Hartmann Brothers Heating & Cooling v. NLRB, (2002).
The use of pretexting has spread beyond big labor. Civil rights groups such as the Legal Assistance Foundation have established pretexting programs targeted at race and sex discrimination. Under these programs, pairs of employees (one black and me, white) are given false resumes. They both then pretended to be job applicants and apply for the same job using the false resumes. If the employer hires the wrong employee (i.e., the white or the male) the employer is charged with unlawful discrimination. This practice was sanctioned by a federal appeals courts as well. Kyles v. J.K. Guardian, (2000). The jury, however, rejected the claim. Perhaps not surprising the federal agency with oversight responsibility for federal civil rights laws then charged the employer with violating federal civil rights laws for suing the pretexters for fraud.
Given its treatment at the hands of the federal government and the federal courts, is it any surprise that a corporation might decide to turn to pretexting to defend itself. If you can’t beat them join them was advice wryly given to countless generations. Perhaps now though the better course would be to fix the problem. Pretexting regardless of the ends it seeks to achieve should be prohibited. Otherwise, as a nation our moral compass is controlled only by the ends bypassing by the means.
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