SEC Management Continues to Oppose Allowing SEC Employees to Refuse an Order When It Would Violate Ethical Rules


9/13/11: During the most recent CBA negotiating sessions, SEC management has continued to remain steadfast in its opposition to the Union's proposal to allow employees to refuse an order when it would violate the ethical rules to which they are subject. The Union has vowed to take this issue all the way to the Federal Service Impasses Panel, if necessary, to ensure that the SEC's workforce will remain able to exercise their independent judgment to maintain the highest ethical standards in their public service for investors. 

Under current rules at the SEC, if an agency employee believes that a particular management directive or assignment would violate his or her Code of Professional Responsibility, he or she may challenge it – but then must obey the order if directed to do so by management, even if doing so would violate the employee's ethical rules promulgated by his or her own state. The Union is attempting to eliminate this indefensible ethics “Nuremberg rule” at the SEC.  . Des

 The Union has proposed a simple and straightforward change to Collective Bargaining Agreement Article 3 which would permit an employee to refuse a management directive under circumstances in which it is deemed to be a violation of the employee’s ethical rules by the body responsible for enforcement of those rules in his or her state:

"In addition, any employee who holds a professional license that he or she uses in the performance of their duties at SEC (i.e., Attorneys, CPAs, Certified Fraud Examiners, etc.) may consult with the body responsible for the enforcement of the Code of Professional Responsibility in the State or District in which he or she is licensed for guidance, and, upon receipt, provide such guidance to the supervisor. Prior to the receipt of such guidance, the professional shall not be required to sign any disputed document, or otherwise carry out the disputed order, direction or assignment. If the guidance provided indicates that the disputed order, direction or assignment is inappropriate, the professional shall not be required to take any such action with respect to that inappropriate order, direction or assignment."

Despite passing several drafts back and forth on this issue, and despite several rounds of discussion about this provision, SEC management remains opposed to making this change. 

"This issue has been a real sticking point for the Union team," CBA negotiating team member Lawrence Pisto remarked this week. "We are really puzzled by why the management team refuses to accept our proposal."

At a time when the SEC has been the subject of increasing scrutiny related to ethics issues, the Union finds it beyond comprehension that management would insist upon taking a position that could literally result in requiring SEC employees to violate ethics rules. The Union believes that the SEC should never require an employee to take an action that has been deemed inappropriate by the ethical authority to which the employee is subject. As a federal law enforcement agency, the SEC should seek to foster strict adherence with ethical rules, rather than defending the management prerogative to compel actions deemed in violation of those rules.