KIIT School of Management

Crack the Case

Case Solution for

A Matter of
Principle

Submitted by
Chetna Wadhwa
PGP- HRM | MDI, Gurgaon
[ pghr15chetna_w@mdi.ac.in | 9582340547 ]

25 July, 2016
[1] Was Nandini Sharma forced to resign, or did she resign
voluntarily?
As per the case, it is mentioned that there were no clearly defined terms of
employment contract between Nandini Sharma and the company. She was
an at- will employee, which means both employer and employee can
terminate their relationship at any time without any notice/ reason/ concern.
Though this provides flexibility, but not at the cost of loss (of any kind) to
either of the parties. There are three critical issues:
a) The company is using saccharin in quantities which are harmful
for children and older persons. Despite knowing its harmful
effects the management is forcing the team to develop the drug:
Nandini, being a medical person is aware of the ill effects and because of
being under Hippocratic Oath she is opposing it. This is a case of personal
ethics conflicting with those of the organizational ethics. Nandinis ethics
are based on the utilitarian theory- welfare of the large masses.
b) Saccharin as a possible carcinogen: Research has been going on for
years, yet this not has been proven. Opposition based on rumors is not
justified.
c) Unwillingness to participate in the clinical testing on the part of
Nandini: Participating in the clinical testing was not mandatory for her as
nothing about it has been mentioned in the contract.
The above issues indicate towards ethics of Nandini which didnt allow her to
support the fraudulent practices of the company. Yet, this is a case of
voluntary resignation. She could have stayed in the organization and
acted as a whistleblower (Ranbaxy whistle blower case). She should have
raised her concerns to the higher management and the HR department,
instead of resigning right away accepting the actions as a punishment. If the
company had not taken any action leading to further hostile and humiliating
conditions and ultimately her resignation this would have become a case of
constructive dismissal. Under this, resignation because of being subjected
to illegal working conditions or mistreatment is considered equal to
termination. Following conditions are essential to prove a forced resignation
(or constructive dismissal):
a) Subjected to illegal working conditions or treatment at work

b) The affected party complains to supervisor, boss or human resources

department, but the mistreatment continues (This was not done by
Nandini)
c) Mistreatment is so intolerable that any reasonable employee would
quit
d) Resignation is because of the mistreatment
Constructive Dismissal- http://labor-employmentlaw.lawyers.com/wrongful-termination/constructive-discharge-an-abusiveatmosphere.html
Ranbaxy Whistleblower Casehttps://newint.org/features/2014/04/01/drugs-india-whistleblower/

[2] Should the pharmaceutical's management have the right to

terminate Nandini Sharma if she refused to participate in the
clinical testing?
Participation in clinical testing is a voluntary and not a mandatory activity.
Though, companies tend to force employees to participate in the clinical
trials, as it saves them time and cost of briefing them about the drug. Forcing
an individual to participate in clinical testing is illegal. Also, nothing has been
clearly specified about its being a mandatory and a key responsibility for
Nandini. Thus, she can refuse to participate and pharmaceutical company
cant terminate her on this ground.
She has had a good record and was recently promoted, which talks about her
being sincere and productive. She cant be charged with being irresponsible,
lacking in good judgment, unproductive and uncooperative merely on the
grounds of non-participation in the clinical trials. Management does not have
the right to terminate Nandini Sharma if she refused to participate in the
clinical testing.
Clinical Testing:http://www.medmarc.com/Life-Sciences-News-andResources/Articles/Pages/Employee-Participants-In-Clinical-Trials.aspx

[3] Under the circumstances of her "resignation," should she have

the right to sue for reinstatement to her position as Director of
Medical Research Therapeutics?
As discussed in the question [1], it is a case of voluntary resignation and not
termination. Nandini was charged being irresponsible, lacking in good
judgment, unproductive and uncooperative. She was demoted and was
called as un- promotable. These were the reasons for Nandinis resignation.
Though, voluntary resignation, she still has the right to sue the company for
reinstatement to her position as Director of Medical Research Therapeutics
on the grounds of false charges leading to her demotion which
ultimately led to her resignation.
She can clearly state that:
a) She had a good record and was recently promoted, which talks about
her being sincere and productive
b) She didnt participate in clinical testing as it was
i. Not mandatory
ii.
Not a part of her employment contract
iii.
Against her personal ethics
c) The company was pursuing an unethical practice which could have
caused harm to the lives of people. Saccharin was being used in
quantities dangerous for children and older people. Though there was
no clear law for permissible limits in drugs, but it is well known to the
company that such quantities are harmful and wont be accepted in
India. It was her personal ethics that made her oppose the
development of such a drug.
If she is able to prove the above mentioned points, substantiated with
evidences, she can claim damages and ask for reinstatement to the post
of Director.
i.

[4] If you were the judge in such a court case, how would you rule
and on what grounds?
This case does not fall into the category of labor laws and is primarily a case
falling under the Indian Contract Act. Details about the employment contract
would make it easier to give exact sections of the act which would be
applicable. It is known that Nandini was an at- will employee, which means
both employer and employee can terminate their relationship at any time
without any notice/ reason/ concern. Though this provides flexibility, but not
at the cost of loss (of any kind) to either of the parties. There was an ethical
conflict since the company was pressurizing to make a drug with Saccharin in
quantities dangerous for children and older people. Though there was no
clear law for permissible limits in drugs, but it was well known to the
company that such quantities are harmful and wont be accepted in India. In
order to conceal their fraudulent act, the company demoted Nandini and
charged her with being irresponsible, lacking in good judgment, unproductive
and uncooperative. This was an act of indirect pressure, instead of raising
her voice, Nandini chose to resign- making it a voluntary resignation. Since
the company is making harmful drugs, it will be fined for it. Also, the
company will have to justify the reasons given for demoting Nandini, failing
to do so, they are bound to compensate her for the losses and humiliation
caused along with reinstatement to the position of Direction (if she so
desires). She will also be eligible for a share of the fines paid by the company
if she acts as the whistle blower. She will be granted protection under the
Whistle Blowers Protection Bill 2011. A vigilance commission would also give
recommendations on the case in terms of illegal activities being carried out
by the company.