Business Forum: What to do when you see criminal behavior in a photonics business

A murky area is: are you required to report a photonics crime as an observer? The answer is "it depends."


I was surprised to read in the news that a software engineer working for Volkswagen (VW; who was still on the payroll of the company at the time of the sentencing) was sentenced to 40 months in jail and fined $200,000 for designing the software to falsify emission data. That prompted me to do some research and write this column to sensitize us in the photonics industry on what we should be aware of on the job. I called my friend Judy O'Brien, who now heads the Silicon Valley corporate group of a leading international law firm, for a few pointers to get me started.

The VW case is easy to understand. Anyone participating in a crime is punishable by law, even if the engineer in this case was just following orders. That is not dissimilar to a killer being guilty, even though he or she is a hired hand. In the VW case, the crime is a violation of the Clean Air Act (CAA) by knowingly constructing equipment in violation of the National Emission Standards for Hazardous Air Pollutants established by the Environmental Protection Agency (EPA) and, no doubt, also making false statements in CAA filings.

I can think of two criminal situations an engineer may encounter in a photonics business: disposal of toxic material and violation of the International Traffic in Arms Regulations (ITAR) on matters relating to the export and import of defense-related articles and services. The latter could simply be unwittingly describing classified technology in an international conference. You can keep out of trouble if your mindset is to do the right thing, and when in doubt, asking someone knowledgeable for guidance.

A murky area is: are you required to report a crime as an observer? The answer is "it depends." As an ordinary citizen, you are not legally required to report a crime or to do anything to stop it. But there are ample exceptions. Some states, for example, require witnesses at the scene of a violent crime to make reports to law enforcement when they can safely do so. Many states require all persons to report suspected child abuse.

As an employee, you have a mandatory reporting requirement to report suspicious work-related crimes, especially those relating to safety and environment issues. Given the many provisos, when in doubt, report to the proper authorities. That said, prosecutions for failure to report are very rare, and usually involve strong evidence of a serious harm that could have been prevented if a person with a duty to make a report had done so.

There are many reasons why an employee chooses not to speak up or make a report. In the case of the VW engineer, he cited his sense of loyalty having worked for the company for 34 years, which proved to be an inadequate defense.

A more common reason for failure to report is fear of reprisal by the company or by fellow workers. Here, the whistleblower laws of the Sarbanes-Oxley Act come to the rescue. In short, a reporting employee is well protected. Public companies are required to adopt a code of business conduct and ethics, and to establish procedures to enable employees to file internal whistleblowing complaints and to protect the employees who file allegations. Also, employees are protected when it comes to the "commission of any federal offense." That, for sure, will apply in the case of a possible ITAR violation.

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