Martin Mareitta v. Paul M.

Lorenz

Case analysis

Anish Tamrakar

MBAC 601 - ETHICAL & LEGAL ENVIRONMENT OF

BUSINESS

09/11/12
Analysis: Martin Marietta v. Lorenz

BRIEF

Applicable law/principle

The applicable law/ principle in the underlying case:

At will employment is also called employment at will and hired at will. All these terms mean that
employment is presumed to be voluntary and indefinite for both employees and employers, under the
Doctrine of Employment at Will.
Fundamentally, an at-will employee in the USA can be terminated at any time, and for any reason –
or no reason at all – and the courts will not intervene to protect the ex-employee from allegedly unfair
treatment by the employer.

The five public policy exceptions indentified in the case are as follows:

 The employer directed the employee to perform an illegal act as part of the employee's work
related duties or prohibited the employee from performing a public duty or exercising an
important job-related right or privilege.
 The action directed by the employer would violate a specific statute relating to the public health,
safety, or welfare, or would undermine a clearly expressed public policy relating to the
employee's basic responsibility as a citizen or the employee's right or privilege as a worker.
 The employee was terminated as the result of refusing to perform the act directed by the
employer.
 The employee present evidence showing that the employer was aware, or reasonably should have
been aware.
 The employee's refusal to comply with the employer's order or directive was based on the
employee's reasonable belief that the action ordered by the employer was illegal.
Summary of the facts

Paul M. Lorenz started working in Martin Marietta's research and development department as a principal
investigator on numerous NASA projects for the United States space-shuttle program. He was responsible
for the organization and quality control of the projects assigned to him. While working he had expressed
concerns to his superiors at Martin Marietta over three major NASA projects referred to as the NDI
Contract, the Mixed Mode Contract, and the Tug Irad Contract which were to be used in the space-shuttle
system.

The purpose of the NDI Contract was to produce data regarding the quality of materials to be used in the
design of an external tank for the space shuttle. While working on this project a design and review
meeting was held to evaluate the status. In the meeting Lorenz pour out his thoughts regarding the testing
sequence and felt that the data weren’t sufficient to permit the designers to built the tank within the
proposed price. However his comment and concern were not well received by his supervisors.

Lorenz told his supervisors that the data generated under the NDI Contract were not being communicated
to the appropriate NASA personnel. When no action was taken on his concerns, he related them to the
NASA project manager. As a result of Lorenz's action, a technical review session was held in order to
address his concerns. Lorenz was chosen to take the minutes of this meeting and to distribute them to
Martin Marietta and NASA participants. After drafting the minutes, Lorenz was instructed by a higher
Martin Marietta official to make modifications in the minutes. Lorenz refused to make any changes to the
minutes, and responded instead with a memorandum stating that the proposed modifications were not
mere corrections but rather were retractions of important representations made by Martin Marietta
officials to NASA at the review session. His supervisor informed Lorenz that he should have made the
modifications and was warned that he should "start playing ball with management."

Lorenz later was involved as a principal investigator in another NASA project, known as the "Mixed
Mode Contract." This project was basically funded from an internal research and development
contribution of $25,000 from NASA, which was taken by Martin Marietta in response to NASA’s request
for a designing and construction of a new testing machine known as the Biaxial Test Fixture. The main
purpose of this machine was to measure complex stresses in aluminum alloys used in the space shuttle.
Later on, in August 1974 Lorenz had written a memorandum to his superiors regarding problems, which,
if not corrected, could result in serious delays and costs. When Lorenz later asked the person responsible
for constructing the machine how such a defective piece of equipment could have been built, Lorenz was
informed that his superiors had directed that the machine be built for not more than $10,000 rather than
the $25,000 allocated to the project.

The third project Lorenz undertook known as The Tug, which was an attempt to demonstrate Martin
Marietta's ability to perform certain work for a NASA space vehicle. The main purpose of the Tug was to
transport astronauts in space from one area to another. Lorenz's responsibility in the project was to
investigate and evaluate the fracture propensities of thin gauge aluminum to be used in the fuel tank. He
was pressured by his superiors to attest to the adequacy of certain materials, but he refused to write a final
report attesting to the quality of the materials. His refusal was pretty much based on his professional
opinion that the materials had not been subjected to adequate testing. He did what he felt was right with
all the years of his experience he had. Lorenz even told his superiors that to cooperate on this issue would
jeopardize his integrity to Martin Marietta, and would constitute a fraud on NASA.

In July 22, 1975, he received a telephone call from his supervisor, informing him that he was being laid
off for lack of work as of July 25, 1975. However, he felt that the telephone call wasn’t referring as the
corporation decision to fire him, but thought that there was a serious miscommunication, which needed to
be corrected. Lorenz returned to work for the next three days and performed his usual activities on the
job. His last day of employment was July 25, 1975.

Holding of the court

The court held that the discharge of respondent for refusing to perform acts in violation of federal
criminal statutes supported a claim for wrongful discharge under the public policy exception to at-will
employment.
 ANALYSIS

Rights and responsibilities of the plaintiff

Lorenz is the plaintiff; he is an employee of Martin Marietta. As an employee, he has his own rights
along with its right, he also has some big responsibilities towards the company.

Rights

 Right to a safe work environment

 Right to clear, honest communications from employer and co-workers
 Right to receive benefits
 Right to privacy in a work place

Responsibilities

 Responsibility to perform work duties to the best of his ability

 Owes a duty of loyalty to his employer
 Responsible for the organization and quality control of the projects assigned to him.
 Responsible for Martin Marietta over three major NASA projects referred to as the NDI Contract,
the Mixed Mode Contract, and the Tug Irad Contract

Rights and responsibilities of the defendant

Martin-Marietta is the defendant and the former employer of Paul M. Lorenz. As an employer, he has
his own rights along with its right, he also has some big responsibilities towards his employees.

Rights

 Right to earn a profit

 Right to choose the members of its workforce
 Right to make management and budgetary decisions
 Right to monitor employees communication
 Responsibilities

 Responsible to communicate with employees

 Provide a workplace free from serious recognized hazards and comply with standards, rules
and regulations issued
 Make sure employees have and use safe tools and equipment and properly maintain the
equipment.
 Use color codes, posters, labels or signs to warn employees of potential hazards.
 Establish or update operating procedures and communicate them so that employees follow
safety and health requirements.
 Provide medical examinations and training when required

Ethical principles to avoid litigation.

Utilitarianism basically requires a judgment maker to maximize the utility, which means achieving the
highest level of satisfaction over its dissatisfaction. In other words it means that the person must consider
its benefits and cost of their actions to the society.

But this theory can be only act if the decision maker may be required to harm himself or herself so that
the society would benefit from its outcome.

Similarly, in this case Lorenz had to deal with many ethical issues in while he was working for Martin
Marietta. He was working as a principal investigator numerous projects, but Lorenz had expressed
concerns towards the superiors over the three major NASA projects known as the NDI Contract, the
Mixed Mode Contract, and the Tug Irad Contract.

While working as a principal investigator on the NDI Contract, he felt that the data weren’t sufficient to
allow the designers to built the tank within the proposed price. But the supervisor didn’t care about his
concern regarding the project. For Lorenz he was just trying to do his job with his caliber. Later on when
nobody in the Marietta corporation, he had no option but to go to the NASA manager to explain his
concern. He was only one, who was more concern about the project than the upper officials. His job was
only to investigate the project, but he put his job on the line by going in front of the NASA manager. Here
we can see that the he is harming himself and fighting for what is right. This action of Lorenz can be
identified as the Utilitarian theory.

Lorenz was also working on another NASA project called the “Mixed Mode Contract”. This contract was
funded from NASA, which was taken by the corporation for the designing and construction of a new
testing machine known as the Biaxial Test Fixture. As Lorenz was the principal investigator in this
project too, while investigating the progress he found out that something was wrong. Lorenz had written a
memorandum to his supervisors regarding the concern. When Lorenz later asked the person responsible
for constructing the machine how such a defective piece of equipment could have been built, Lorenz was
informed that his superiors had directed that the machine be built for not more than $10,000 rather than
the $25,000 allocated to the project.

Paul M. Lorenz is a dedicated worker. Here we can still see, that he is more concerned about the project
as he writes a memorandum to his supervisors regarding the problems which if not corrected would have
resulted excessive delays and costs. Lorenz is pretty much dismayed to find out, it was his supervisors
who directed the contractor to built the machine around $10,000 rather than the allocated $25,000 by the
NASA. He knows that his supervisors are trying to steal some money from the NASA, but he doesn’t do
anything towards this action. This action cannot be termed under the Utilitarian theory.

“The Tug “ was the last project for Paul M. Lorenz. The main purpose of the Tug was to transport
astronauts in space from one area to another. Lorenz's responsibility in the project was to investigate and
evaluate the fracture propensities of thin gauge aluminum to be used in the fuel tank. However, he was
pressured by his superiors to attest to the adequacy of certain materials, but he refused to write a final
report attesting to the quality of the materials. His refusal was pretty much based on his professional
opinion that the materials had not been subjected to adequate testing. He did what he felt was right with
all the years of his experience he had. Lorenz even told his superiors that to cooperate on this issue would
jeopardize his integrity to Martin Marietta, and would constitute a fraud on NASA.

In this project, we can see that he is ready to loose to job for what is right. This machine was built to
transport astronauts in space. Lorenz was basically pressurized by his supervisors to attest the adequacy of
certain materials. This concept is not only ethically wrong, but also considered a fraud issue cheating
NASA. Here he scarifies and looses his job for this action to protect the society and others.

In 18th Century philosopher Immanuel Kant came up with a theory called Kantianism where he viewed
humans as a moral actors that are free to make their own choices. As humans are able to judge the
morality of any action by applying his famous categorical. Which means that we can judge an action by
applying it universally.
Paul M. Lorenz faced many issues while working for Martin Marietta Corporation. He has to choose
between what was right and what was wrong. He had to make many ethical decisions. Lorenz had a many
conflicting duties, one towards his client and another towards his employer. Both the duties are equally
important. But I feel that duty towards the his client was more important than one towards his employer.
Lorenz actually took both the side equally. Even though he knew that the orders given to him was
unethical he kept on taking the order until the las the Tug Project, where his refusal was pretty much
based on his professional opinion that the materials had not been subjected to adequate testing. He did
what he felt was right with all the years of his experience he had. Lorenz even told his superiors that to
cooperate on this issue would jeopardize his integrity to Martin Marietta, and would constitute a fraud on
NASA. So after his last project he felt that his duty towards his clients were more important than his
loyalty towards his employer.

Common sense business practices

In Lorenz v. Martin Marietta Corporation, Lorenz had a tort claim against Martin Marietta for the
wrongful discharge on Lorenz’s refusal to perform an act, which was considered illegal according to his
perspective. Lorenz was basically had been involved in 3 of the major project’s for the corporation. He
was responsible for the organization and quality control of the projects assigned to him. While working he
had expressed concerns to his superiors at Martin Marietta over three major NASA projects referred to as
the NDI Contract, the Mixed Mode Contract, and the Tug Irad Contract which were to be used in the
space-shuttle system. He faced many ethical issues while working on these projects.

During his first project named the NDI Contracts, Lorenz issues and concern were not taken seriously.
Since no upper officials were responding to him he went directly to the NASA project manager to deliver
his concerns regarding the dissatisfaction regarding the project. After that incident, Lorenz was given the
opportunity to speak up finally towards the Martin Marietta. The upper officials at the Martin Marietta
finally decided that Lorenz could make changes to the minute after all the drama. However, Lorenz
refused to do it by issuing memorandum stating that this was not act for the betterment of the project
rather a retractions of representation made to the NASA at the meeting. Lorenz always gave his entire
capacity to work with the project whereas, the upper officials in Martin Marietta were not that focused
towards the completion of the project in the perfect manner.

In this scenario I felt that corporation didn’t had good codes of the ethics. This place would have been
well organized and managed if they had better people like Paul Lorenz in the upper officials in the Martin
Marietta instead of hiring him as the principal investigator for the top projects. Even though he was
working as the principal investigator the upper officials at the corporation always tied up his hands. The
board never gave opportunity to let me do what was best for the corporations. If the corporation had given
him some him some authority towards the project he was would have gone to the NASA manager to
speak out his concern.

The Mixed Mode Contract was another big scandal, where Lorenz lost his respect towards the corporation
for the cheap behavior. NASA basically funded the project worth $25,000, which was taken by Martin
Marietta in response of NASA’s request for the construction of a testing machine. As a principal
investigator Lorenz had to investigate the machine and found out that the machine was not built properly.
If immediate changes were not taken place it would lead to delays and numerous cost. But which he later
found out that his superiors had directed that the machine be built for within $10,000 rather than its
allocated price.

There was a big ethical and legal violation in this project. The upper officials were entirely corrupted and
were basically working for money rather than the company. The implement of the employee hotline in
order to report for the suspected ethical and legal violation would have helped the company for being
cheated upon by their own employees. These kind action made by upper officials are really dangerous,
which is very shameful. If that hotline had been set up before these kind of action had taken place all the
people involved in these scandal would have been easily caught for their and action and punished too.

The third project Lorenz undertook known as The Tug, was an attempt to demonstrate Martin Marietta's
ability to perform certain work for a NASA space vehicle. Lorenz's responsibility in the project was to
investigate and evaluate the fracture propensities of thin gauge aluminum to be used in the fuel tank. He
was immensely pressured by his superiors to attest to the adequacy of certain materials, but he refused to
write a final report attesting to the quality of the materials. His refusal was pretty much based on his
professional opinion that the materials had not been subjected to adequate testing. He did what he felt was
right with all the years of his experience he had. This was basically the case of the fraud.
This is basically the case of lack of training and misguiding codes of ethics. After listening to all the cases
presented we can sense that the entire upper official was corrupted. It feels like no body actually cared for
the corporation, all the upper officials were busy filling up their pockets rather than working for the
corporation. This situation wouldn’t have arisen in the first place if all of the officials had been given
proper training and codes of ethics. I believe that the board gave too much freedom and trust to the upper
officials to carry out their operation. If the board was little bit more strict, the corporation would never
had to deal with such scenario.