>> Business Law and Ethics
32.8 Ethics The American Ship Building Company (American) operated a shipyard in Chicago, Illinois, where it repaired Great Lakes ships during the winter months, when freezing on the Great Lakes rendered shipping impossible. The workers at the shipyard were represented by several labor unions. The unions notified American of their intention to seek modification of the current collective bargaining agreement when it expired three months later. On five previous occasions, agreements had been preceded by strikes (including illegal strikes) that were called just after the ships had arrived in the shipyard for repairs so that the unions increased their leverage in negotiations with the company. Based on this history, American displayed anxiety as to the unions' strike plans and possible work stoppage. On the day that the collective bargaining agreement expired, after extensive negotiations, American and the unions reached an impasse in their collective bargaining. American decided to lay off most of the workers at the shipyard. It sent them the following notice: " Because of the labor dispute which has been unresolved, you are laid off until further notice." The unions filed unfair labor practice charges with the NLRB. Questions to answer: Did American act ethically in locking out the employees? Are American's actions legal?