Essays24.com - Term Papers and Free Essays
Search

Music

Essay by   •  October 12, 2010  •  2,396 Words (10 Pages)  •  1,153 Views

Essay Preview: Music

Report this essay
Page 1 of 10

Coca Cola: Is It "the Real Thing"?

Most of us think about the Coca-Cola Company in a positive light because it continues to bring us what is arguably the tastiest soft drink around. One would expect that a company that describes itself on its website as "a company that exists to benefit and refresh everyone it touches" and has been so successful for years would have a corporate culture and code of ethics that matches this image. However, a closer look at the Coca-Cola Company, its corporate culture and allegations of corruption paint a less than rosy picture of the soft drink leader. A Coca-Cola employee named Matthew Whitley made a splash when he was fired on March 26, 2003 and then sued the Coca-Cola company a couple of months later for the large sum of forty five million on the grounds that he had been fired in retaliation for raising concerns about accounting fraud and other misconduct. He was fired just five days after sending his allegations to the company's top lawyer. When Coke balked, Whitley turned for relief to a new legislation: the Sarbanes-Oxley Act of 2002. He filed for whistle-blower protection under the act's section 806 provisions and initiated federal investigations into the Coca-Cola Company.

In the past couple of years, the corporate world has been rocked by scandals occurring in well-known companies such as Enron and WorldCom. These blatant examples of fraudulent financial reporting and related corporate corruption created the necessity for more stringent and comprehensive laws and punishments to avoid such corporate scandals in the future. On July 30, 2002 President Bush signed into law the Sarbanes-Oxley Act of 2002. The law was enacted to bolster public confidence in our nation's capital markets. It imposes new reporting requirements and significant penalties for non-compliance on public companies and their executives, directors, attorneys, auditors and securities analysts. In my opinion, one of the significant provisions of the Act, that covers companies registered under section 12 of the Securities and Exchange Act of 1934, provides federal protection for "whistleblowers". The Act requires that companies covered in the Sarbanes-Oxley Act should encourage employees to come forward and provide management with information regarding potential corporate fraud. It also specifically prohibits employers from retaliating against employees who provide such information. This Act was passed as a result of Enron's attempted retaliation against Sherry Watkins who blew the whistle on the company. It's purpose seems to be to enable ethical employees help keep management abreast of unsavory activities that will in the long run not only harm employees, stockholders and other stakeholders, but as past experience has shown will often lead to the demise of the company. I will focus on this aspect of the Sarbanes-Oxley Act and how it relates to the case brought against the Coca-Cola Company by one of its employees, and also refer to section 301, relating to new rules about audit committees.

Attitudes toward whistle-blowing have evolved over the past 50 years in corporate America, from the early days when loyalty to the company was the ruling norm to the present time when public outrage about corporate misconduct has created a more comfortable climate for whistle-blowing. Prior to the 1960's, corporations had total control over employee policies and could fire an employee at will, even for no reason. Employees were expected to be loyal to their organizations at all costs. Therefore, in that era, more often than not problems were concealed rather than solved. In response to these issues, Congress passed the Civil Service Reform Act in 1978 to protect the rights of government employees who reported wrongdoing. In 1989, the federal government extended whistleblowing protection to non-governmental employees through the False Claims Act, which allows private individuals to sue government contractors on behalf of the U.S. government. However, there were still few laws protecting whistleblowers in the private sector. In the 1980's, some states began to provide whistleblower protection to employees as a result of the erosion of the employment-at-will doctrine (i.e. a company can terminate employment for any reason).

Now with the Sarbanes-Oxley Act, internal and external whistleblower protection has been extended to all employees in publicly traded companies for the first time. Specifically, the employee does not have to prove that the employer violated the law. He just has to have a "reasonable belief" that this has occurred. He can report the illegal activity to a federal agency, a member or committee of Congress, or a supervisor in the company. The act prohibits the company, officers, employees, contractors and other agents of the company from retaliating against the employee. Retaliation includes firing, demotion, threats or other harassment. The employee must file a complaint with the department of labor within 90 days of the alleged retaliatory behavior. The employee may be granted remedies such as reinstatement of employment, back pay with interest, damages, and attorney's fees. Clearly there is quite a bit of subjectivity to the act, which may make seeking such damages not as easy as it may seem.

In his lawsuit, Whitley claims that while he was employed as the Director of Finance - Supply Management in the Fountain Division of the Coca-Cola Company, he identified to senior management a variety of illegal and fraudulent schemes and discriminatory misconduct in the Fountain Division. Some of these allegations include, the promotion and sale to children of frozen uncarbonated beverages that Coke knew contained metal residue that may potentially be harmful, a 65 million dollar fraud perpetrated on the Burger King Corporation and ratified by members of Coke's board of directors, intentional overstatement of revenues and gross profits by 750 million, illegal price discrimination against customers, and continued intentional discrimination against African - American and Hispanic employees. Whitley claimed that he reported these offenses to upper management in an attempt to protect the company's stakeholders including the customers, shareholders, and employees of the Coca-Cola Company. Coke vehemently denied the allegations brought by Whitley and the charges of a retaliatory dismissal. Coke called Whitley's suit "frivolous, unreasonable and without foundation." The world's largest soft drink company said Matthew Whitley had been dismissed in March solely as a result of a decision to cut 1,000 jobs in its North American division. However, Coke did concede that some employees improperly influenced a marketing test, which the suit says led Burger King to invest $65 million in Frozen Coke.

On

...

...

Download as:   txt (14.8 Kb)   pdf (162.1 Kb)   docx (14.4 Kb)  
Continue for 9 more pages »
Only available on Essays24.com
Citation Generator

(2010, 10). Music. Essays24.com. Retrieved 10, 2010, from https://www.essays24.com/essay/Music/4051.html

"Music" Essays24.com. 10 2010. 2010. 10 2010 <https://www.essays24.com/essay/Music/4051.html>.

"Music." Essays24.com. Essays24.com, 10 2010. Web. 10 2010. <https://www.essays24.com/essay/Music/4051.html>.

"Music." Essays24.com. 10, 2010. Accessed 10, 2010. https://www.essays24.com/essay/Music/4051.html.