Ethics in Action: The Coca-Cola Trade Secret Case Begins

This past week in Florida, the trial of Joy Williams began. Prosecutors allege that Williams, a former Coca-Cola employee, conspired to sell sensitive trade secretes to arch rival, Pepsi Co. Williams’ transgression could land her in prison for up to 10 years if she is convicted.

The case has some valuable lessons vis-à-vis ethics and compliance training.

Caught by the FBI with documents and unreleased product samples in her home, Williams now alleges that her (convicted) co-conspirators tricked her into sharing the information. Her lawyer’s take on the case is that her client was taken advantage of and that she “did not take any documents she believed to be trade secrets to share with these people or to harm Coke and benefit Pepsi, nor did she intentionally knowingly give them any documents."

Williams was not a top executive, a critical R&D team member, or part of a secret team testing new products. She was a trusted administrative assistant to Coca-Cola’s global brand director. Her position gave her access to trade secrets vital to Coca-Cola. This combination of trust and access created a tempting situation and an opportunity for her to allegedly engage in illegal conduct.

What’s interesting about this situation is how the scheme was discovered. Employees at Pepsi Co. didn’t bite when offered the information, and it was Pepsi that reported the matter to Coca-Cola.  Had the Pepsi employees taken the information, Pepsi could have found itself in some very hot water as well. Instead, Pepsi employees did the right thing when presented with a true ethical dilemma – the goal of all organizations striving to create ethical cultures.

For Coke, the situation was a little different. Coke had to re-evaluate its control procedures and its general counsel issued a memo to all employees asking them to report any suspected violations or other inappropriate conduct.

This case highlights a couple of important things about ethics and compliance training:

• First, if she is telling the truth, Williams was lacking information that was essential to her role. She obviously needed basic trade secret, ethics, and confidentiality training. Maybe if she understood the importance of proprietary information and trade secrets, and had a better grasp on her obligation to keep them secret, the situation could have been avoided.

• Second, Pepsi employees clearly had a solid understanding about some critical compliance issues (confidentiality and proprietary information), as well as the company’s ethics and compliance program (identifying and reporting suspected misconduct). Training is undoubtedly the best way to get this message out to your employees. In this case, “doing the right thing” kept Pepsi out of legal trouble.

• Third, employees must be told to report suspected misconduct. You may assume that they know this very fundamental concept—but they don’t. Training that covers reporting is a critical part of creating an ethical culture.

• Fourth, organizations cannot overlook entry-level employees when they think about ethics and compliance training target audiences. Just like senior executives, and employees in R&D, almost every employee has access to very sensitive information.  If they don’t understand the rules, it’s hard to ensure they’ll put ethics into action.

Tags: and, compiance, compliance, confidentiality, ethics, Ethics Training & Compliance Training, secreates, trade, training,