Ethical Behavior and Tumbling Toyotas

January 6, 2011 update on Dimitrios Biller: Arbitrator Gary L. Taylor sided with Toyota, in its suit against Dimitrios Biller, ruling Biller must pay Toyota $2.5 million in damages and $100,000 in punitive damages for violating attorney- client privilege and a confidentiality agreement when Biller accepted his $3.7 million severance agreement from Toyota in 2007. Biller is required now to surrender the papers the papers he took from Toyota and drop his lawsuit against the automaker.

You may recall in the 2007 film “Michael Clayton” Tilda Swinton won an Oscar for her portrayal of a general counsel acting under the intense pressure to deliver the results expected by her CEO. Her attorney character responds to pressure by sacrificing laws and human life, making decisions that roll her further over into the dark side.

The decisions made in turning-point moments define our ethical boundaries. The corporate scandals that continue to take above-the-fold priority on business pages demonstrate too clearly what happens when the bar is set too low.

Some exciting developments are occurring in graduate schools that help students prepare for and navigate in defining moments.

The MBA Oath, launched last spring at Harvard, that has been signed by more than 1500 students around the globe so far, and changes made in how ethics is taught to law students are just two examples. They are especially relevant seen against yet another example of ethical breakdowns that have come to light in a lawsuit about Toyota’s alleged handling of  SUV and truck rollovers.

As classes at MBA schools gear up this fall, a website assists students in enlisting classmates in signing a student-written pledge that acknowledges that as future managers they will “face choices that are not easy for me or others.” The voluntary pledge defines a code of conduct through eight commitments made to carry out ethical behavior in the organizations where they will work. Some examples of commitments include acting with integrity and working in an ethical manner, being responsible and accountable, and understanding and honoring the letter and spirit of laws and contracts in their behavior and their enterprise’s.

The commitments speak to the kinds of value the students want to help create in the world. “I will manage my enterprise in good faith, guarding against decisions and behaviors that advance my own narrow ambitions but harm the enterprise and the societies it serves.” In signing and living the pledge, students agree that they “will strive to create sustainable economic, social and environmental prosperity worldwide.” The student movement has the support of Harvard, other leading business schools, The World Economic Forum and Aspen Institute.

Recognizing that lawyers operate in ambiguities and confront their own defining moments, The University of Chicago Law School has redesigned its ethics requirement entitling it “Legal Profession: Shades of Gray.” Using role playing drawing on ethics dilemmas in real life, the case-based ethics seminar stimulates rich discussion and debate that help future lawyers see how bad choices might play out and also test their moral compass in hypothetical situations creating intense pressure.

Law school students will have no shortage of material debating ethical issues emerging from a lawsuit Dimitrios Biller filed against his former employer Toyota and several executives in the legal department. There seems to be a bit of a disconnect:  while Biller is suing his former employer for how they handled product liability cases, on his website he takes credit for his victories in those same cases. Biller, formerly National Managing Counsel of the National Rollover Program for the world’s largest automaker, in his suit filed in July claims the company obstructed justice and ignored his warnings that they were destroying and concealing evidence in product liability cases. Yet currently on his website he boasts that “Mr. Biller turned around the National Rollover Program and saved Toyota very significant sums through numerous trials and successful settlement negotiation strategies.” Terminated in 2007, he said he fought corporate pressure, had an emotional breakdown, and received a $3.7 million severance settlement.

The court documents in Biller’s suit are currently public. This set in motion plans by Todd Tracy, a Texas vehicle safety attorney, to refile next week 15 rollover suits against Toyota. If Biller’s whistleblower accusations are true, Tracy told Automotive News, “This opens any cases that Toyota’s had from years ago.” A Judge will rule later this month on Toyota’s motion to seal Biller’s documents.

Toyota said in a statement that Biller violated attorney-client privilege, his ethical and professional obligations, and a restraining order Toyota obtained against him. Toyota said “it takes its legal obligations seriously and works to uphold the highest professional and ethical standards.”  Toyota accused Biller of making inaccurate and misleading allegations, saying the company believes “it acted appropriately with respect to product liability litigation.”

Plaintiffs were injured or died in Toyota SUV and truck rollovers; if evidence substantiates that the lawsuits weren’t handled ethically, Toyota faces a reputation crisis, as well as significant financial liability. Mr. Biller has already put his reputation, not to mention his legal career, at risk. Whatever the results, the tenets of the MBA Oath movement and the creating of a code of conduct for managers, as well as refocusing how ethics is taught in law school seem even more relevant in face of reputation rollovers.

Gael O’Brien

September 6, 2009


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