The Moral Minimum

Compliance with the law is sometimes called the  moral minimum . If people and entities merely comply with the law, they are acting at the lowest ethical level that society will tolerate.

Failure to meet the moral minimum can have significant consequences, especially in the context of litigation. A businessperson who fails to respond to a lawsuit filed against him or her can be held liable.

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Case Example 

Rick Scott deposited $2 million into an escrow account maintained by a company owned by Salvatore Carpanzano. Immediately after the deposit was made, the funds were withdrawn in violation of the escrow agreement. When Scott was unable to recover his money, he filed a suit against Salvatore Carpanzano and others, including Salvatore’s daughter, Carmela. In the complaint, Scott made no allegations of acts or knowledge on Carmela’s part. (The complaint claimed only that she had received a $46,600 Land Rover Range Rover purchased with the funds.)

Salvatore failed to cooperate with discovery and did not respond to attempts to contact him by certified mail, regular mail, and e-mail. He also refused to make an appearance in court and did not finalize a settlement negotiated between the parties’ attorneys. Carmela denied that she was involved in her father’s business or the Scott transaction. The court found that the defendants had intentionally failed to respond to the litigation and issued a judgment for more than $6 million in Scott’s favor. On appeal, a federal appellate court affirmed the district court’s judgment against Salvatore but reversed the judgment against Carmela. The court reasoned that there was no evidence that Carmela was willfully involved in her father’s wrongdoing.

Although the moral minimum is important, the study of ethics goes well beyond these legal requirements to evaluate what is right for society. Businesspersons must remember that an action that is legal is not necessarily ethical. For instance, a company can legally refuse to negotiate liability claims for injuries allegedly caused by a faulty product. But if the company’s refusal is meant to increase the injured party’s legal costs and force the party to drop a legitimate claim, the company is not acting ethically.


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