What the law reveals about our ethics

The law can be seen as a reflection of our ethics, so it’s interesting to look at recent legal developments and consider how they might be shifting the ‘ethical goalposts’. Here, ethics expert and former employment lawyer Clare Payne outlines several recent developments that are signalling change and should be noted by all directors.

Should companies have ‘public good’ responsibilities?

As part of the ongoing cases against Purdue Pharma (the OxyContin painkiller manufacturer linked to the opioid crisis) is a proposal by Purdue Pharma to remake itself as a non-profit company. This would involve the company becoming a public trust that serves the public good. In May, a federal bankruptcy judge in New York indicated they would permit Purdue Pharma’s proposal to be put to a vote by thousands of plaintiffs.

In June, the Attorney General of Ohio, went to court requesting a judicial declaration that Google is a public utility under common law. As a common-law public utility, Google would then have a legal duty to act with consideration of the public interest. This is in addition to the bipartisan antitrust action against Google led by more than 30 states (including Ohio).

Can standardised legal agreements bring fairness to negotiations?

Throughout the Me Too movement, the role of non-disclosure agreements (NDAs) was questioned, particularly in relation to silencing victims and allowing perpetrators to reoffend. Since 2019, Governments (including the US, UK, and Australia) have initiated reviews of legal processes to ensure they operate fairly. The Australian Government has committed to developing guidelines that identify best practice principles for the use of NDAs in workplace sexual harassment matters.

In the meantime, the ‘One NDA’ initiative (launched in March), is setting out to create a universally standardised template for non-disclosure agreements. It already has the support of a ‘magic circle’ of law firms including Norton Rose Fulbright and Gilbert + Tobin.

Will challenges to the gig economy shift business models?

In February, the Supreme Court in the UK upheld that two Uber drivers could be classed as workers rather than self-employed independent contractors, giving them the right to be paid statutory entitlements including the minimum national wage, annual leave and other benefits. This decision is the result of a 5-year legal action and Uber will not be able to launch further appeals against the ruling. 

Whilst the case only related to two individuals in the UK, it was anticipated that it could lead to similar challenges in other jurisdictions, including in Australia where a group of Uber drivers have launched legal action in the Federal Court. Uber were advised of the action on July 30th.

Will young people shift our beliefs around climate responsibility?

In May, the Australian Federal Court ruled that the Environment Minister has a legal duty not to cause harm to young people of Australia. This was following a class action launched on behalf of young people seeking an injunction to stop the Australian Government approving an extension to a coal mine.

In April, New Zealand became the first country in the world to introduce a law that requires the financial sector to disclose the impacts of climate change on their business and explain how they will manage climate-related risks and opportunities.

Women make their mark

In July, the 2020 National Profile of Solicitors Report revealed that women now outnumber men in the legal profession in Australia, with women representing 53% of the profession.

In July, leaders at the Law Institute of Victoria, the Victorian Equal Opportunity and Human Rights Commission and the Commission for Gender Equality in the Public Sector expressed their support for a change to make the language of the law inclusive of all genders. This followed a campaign by a law student to have the wording of legislation amended from the default use of ‘he’ to gender neutral terms. Canada made this change in 1985.

As the song goes - the times, they are a changin’, hopefully for the better.