Why Business Men Violate the Law

Abstract

Recent interest in the problem of illegality in the business community focusses attention on the considerable scope of this phenomenon. Thus, in 1951, the National Labor Relations Board formally ordered 115 firms to cease certain illegal practices and informally adjusted another 796 cases.2 In the same year the Federal Trade Commission investigated 869 cases of deceptive practices and found business management guilty of illegal practices in 107 ;3 the Wage and Hour and Public Contracts Divisions of the Department of Labor inspected 33,479 establishments and found 56 percent of them guilty of violations of the law.4 Of course these represent only a fraction of the cases of violation, but they insistently raise the question: why do some businessmen violate these laws while others do not? This paper is an attempt to contribute to the growing evidence and doctrine in this field. It is based upon the following sources of information: (a) interviews with top management in twenty-five New England industrial firms, (b) interviews with seven leaders of governmental regulatory agencies, (c) analysis of the cases reported in Federal Trade Commission Decisions, Decisions and Orders of the National Labor Relations Board, court cases arising from these decisions and court cases arising from the action of the Wage and Hour and Public Contracts Divisions of the Department of Labor, (d) a statistical study of the violations of trade practice and labor relations regulation in the New England shoe industry.