Sources on Business Ethics

SELECTED TEXTS ON BUSINESS ETHICS

“Do what is right and good in the eyes of God.”

Deuteronomy 6:18

Baruch Atah Adonai Elohenu melech ha-olam asher kidshanu b’mitzvotav v’tzeevanu la’asok b’divrei Torah. We praise You, Adonai our God, ruling force of the universe, who makes us holy with your mitzvot, giving us the mitzvah of making Torah study our business. Rabbi Menachem M. Schneerson- “The verb most often used by our sages to describe our involvement with Torah is not study, learn, practice, observe or the like, but osek (“occupy oneself”)- a word usually associated with the act of doing business. Indeed, a life devoted to the study of Torah and implementation of its ideals much resembles a businessman’s occupation with his enterprise. . . To succeed in business, one must be on the move. . . Stagnation is anathema to business. . . A person successful in business is one who has learned to continually progress and develop, to constantly find new and innovative ways to optimally apply his talents and resources.” The Holiness of Work Genesis 3:17-19- to Adam- “Cursed be the ground because of you; by toil shall you eat of it all the days of your life. Thorns and thistles it shall sprout for you. But your food shall be the grasses of the field; by the sweat of your brow shall you get bread to eat.” Exodus 20:8-9- “Six days you shall labor, and do all your work; but the seventh day is a sabbath unto Adonai your God, in it you shall not do any manner of work, you, nor your son, nor your daughter, nor your man-servant, nor your maid-servant, nor your cattle, nor your stranger that is within your gates.” Moses Maimonides- “A person who is a craftsman should work at his calling three hours a day and (study) Torah nine hours.” (Laws of Torah Study 1:12) Baba Batra 110a- “Skin an animal carcass in the street and earn a wage, and don’t say, ‘(Support me), I am a great sage and this work is degrading to me.’” Rabbi Miryam Klotz- “Rashi suggests that when Shabbat comes, one must act as if all of one’s work had been completed so that one can enter into rest deeply and completely. This can be a challenging mental and spiritual practice requiring discipline! But it points to an important teaching about healthy and balanced effort: When it is time to work, work! And when it is time to rest, rest fully both physically and mentally. Let go of thinking about work and the need to finish everything completely. There is an auspicious and dignified rhythm suggested between the balance of work and rest.” Pirke Avot 3:21- “Where there is no flour, there is no Torah. Where there is no Torah, there is no flour.” Kiddushin 29a- “A father’s obligations to his son. . . teach him a trade or profession. . . Whoever does not teach his son a trade of profession teaches him to be a thief.” The Mitzvah of Ethics in Business Shabbat 31a- “In the hour when an individual is brought before the heavenly court for judgment, the person is asked: Did you conduct your business affairs honestly? Did you set aside regular time for Torah study? Did you work at having children? Did you look forward to the world’s redemption?” Leviticus 25:14- “When you buy or sell to your neighbor, do not cheat one another.” Baba Metzia 4:3- “Fraud is constituted by (an overcharge of) four silver coins in twenty four, (hence) an overcharge of a sixth of the purchase.” Baba Metzia 4:10- “Just as fraud pertains in buying and selling, so can it apply in spoken words. One may not say to a store owner, ‘How much does this item cost?,’ if one has no intention of buying it.” Baba Kamma 10:9- “One may not buy wool, milk, or kids from the shepherds. Nor may one buy wood or fruit from the watchmen of the orchards. . . (Even in cases where it is permitted to buy something), in all cases in which the seller asks that the good be hidden, it is forbidden (to make such a purchase).” Mesillat Yesharin 11- “Just as theft of money is theft, so is theft of time.” Rabbi Dr. Asher Meiri- “It is okay for you to offer an occasional discount to make a sale, but you should try to make sure that they remain truly occasional (because when the discount becomes the rule, the buyer who pays full price is being overcharged.)” Makkot 24a- commenting on Psalms 15:2- “speaks the truth in his heart”- “’And speaks the truth in his heart’- This refers to Rabbi Safra. Rashi: This is what happened with Rabbi Safra. He had a certain object for sale. Someone came to him to purchase it, and Rabbi Safra happened to be in the middle of reciting Shema. The man made an offer, to which Rabbi Safra did not respond (because he could not interrupt his recitation). The buyer thought his offer must have been too low, and he therefore raised his bid. When Rabbi Safra finished he said, “Pay what you had offered originally, for I had decided to sell it to you for that price.” Remah, Shulchan Aruch, Choshen Mishpat 104:11- “The correct opinion is that even if someone agreed to one price, and is offered another, he should not back out of the original deal, and if he does he is considered lacking in integrity.” Shulchan Aruch, Choshen Mishpat, 204:7- “If one conducted a transaction verbally, it is appropriate for him to keep his word even though he neither took any money nor wrote anything down. . . and anyone who backs out of such a deal is considered lacking in integrity.” Rabbi Shaul Wagschal, Torah Guide for the Businessman, p. 11- “A verbal agreement is not legally binding according to Torah law. However, breaking a verbal agreement is considered a breach of trust. A promise to buy or sell should be upheld even if it will cause financial loss.” Treatment of Workers Deuteronomy 24:14-15- “You shall not abuse a needy and destitute laborer, whether a fellow countryman (Jew) or a stranger (non-Jew). . . You must pay him his wages on the same day, before the sun sets, for he is needy and urgently depends on it, or else he will cry to God against you and you shall incur guilt.” Baba Metzia 112a- “. . . and his life depends on it.”- Why did this man (the laborer) ascend a ladder, suspend himself from the tree, and risk death itself; was it not that you should pay him his wages?” Rabbi Hezekiah ben Manoach, Hizkuni to Deuteronomy 24:15- “His life depends on it- his soul longs for it.” From Menachem Marc Kellner, Contemporary Jewish Ethics, quoting Rabbi Israel Meir haKohen of Radin, p. 339- “If one plans to engage his fellowman in any kind of work for which he is to receive payment, let him arrange for a price or wage in advance. For otherwise he is most likely to become an oppressor by denying the wage demanded by the hired man, unless he chooses to be overgenerous with his money to escape all doubt of having wronged the worker. Most of us depend upon our fellowman to perform hundreds of actions for us, and it happens frequently that after such work is performed, disputes arise between employer and employee with regard to payment due. When they finally part with each other, each of them is convinced that the other had robbed him. Each is willing to engage in endless strife, but he does not forgive the wrong he feels to have been perpetrated against himself. In some cases, they protract their quarrel. As far as Jewish law is concerned, the place (local standard and custom), as well as the time when the work is being done, decides the proper payment. Even if he kept back only one penny of what is due to the worker, the employer on that account would be considered a robber ‘withholding the hired man’s wages.’ Who is able to know exactly what the local standard or custom is, particularly with regard to any kind of work he may impose upon the other? Of necessity, then, if he wishes to do what is right, he would be obliged to give the working man whatever he demands. And that, too, is very difficult. Hence, anyone who wishes to fulfill God’s wish in this manner, to do what is proper, let him settle with him in advance what payment he should receive and thus obviate any doubt.” Customer Relations Baba Batra 5:10- “The shopkeeper must wipe his measures twice a week, his weights once a week, and his scales after every weighing.” Mesilat Yesharim 11- “Anything that one does in order to demonstrate the good quality of the object is good and appropriate. However, what someone does to conceal the defects of what he is trying to sell constitutes trickery and is forbidden. This is an important general rule in business ethics.” Baba Metzia 4:11- “A vendor may not combine different grades of produce in one bin, a vendor whose wine has become diluted with water may not sell it unless he makes full disclosure to the customer, and in any event he may not sell it to another retailer, even if he makes disclosure, for fear that the second retailer will deceive his customers.” Baba Batra 21b- “R. Judah says that a shopkeeper should not give presents of parched corn and nuts to children, because he thus entices them to come back to him. The Sages, however, allow this.” Competition Baba Batra 21b- “R. Huna said: If a resident of an alley sets up a handmill and another resident of the alley wants to set up one next to him, the first has the right to stop him, because he can say to him: ‘You are interfering with my livelihood.’ . . An objection was raised (against Rab Huna’s ruling from the following:) ‘A man may open a shop next to another man’s shop or a bath next to another man’s bath, and the latter cannot object, because he can say to him, I do what I like in my property and you do what you like in yours?’- One this point there is a difference of opinion among Tannaim, as it appears from the following Baraitha: ‘The residents of an alley can prevent one another from bringing in a tailor or a tanner or a teacher or any other craftsman, but one can prevent another (from setting up in opposition.)’ Rabban Shimon ben Gamliel, however, says that one may prevent another.” Shulchan Aruch Choshen Mishpat 237:1- “If a person is negotiating to buy or hire movable or immovable property and another preempts him and buys it (or hires it), the latter is an evil person. This applies also in the case of a worker seeking employment.” Kiddush HaShem-Making God’s Name Holy Tosefta Baba Kamma 10:14- “It is worse to steal from the many than to steal from an individual; for one who steals from an individual can appease him by returning the theft; one who steals from the many, cannot (since he doesn’t even know all the people from whom he stole.)” Tosefta Baba Kamma 10:15- “Stealing from a non-Jew is worse than stealing from a Jew because of the profanation of God’s name.” Pirke Avot 6:6- “Whoever repeats a statement in the name of the one who said it brings redemption to the world.” Yoma 86a- “’And you shall love Adonai your God’ (Dt. 6:5); this means that you should cause God to be loved through your acts. Thus, if a person studies Bible and Mishnah. . . and is honest in his business dealings, and speaks gently to people, what do people say about him? ‘Happy is the father who taught him Torah. Woes unto those who haven’t learned Torah. This man studied Torah; see how noble his ways are, how good his actions. . . ‘ But when a person studies Bible and Mishnah. . . but is dishonest in business, and does not speak gently with people, what do people say of him? ‘Woe unto him who studies Torah. . . This man studied Torah; look how corrupt are his deeds, how ugly his ways.’” Midrash Devarim Rabbah 3:3- “Once, Rabbi Shimon ben Shetach bought a donkey from an Arab. His students went and found a precious stone hanging around neck. Rabbi said to him "It is the blessing of God that enriches." R. Shimon ben Shetach said to him "I bought a donkey. I did not buy a precious stone." He went and returned it to the Arab and the Arab said "Blessed is the God of Shimon ben Shetach." Tosefta Yoma 2:6- “The house of Abtinas were expert in preparing the incense but closely guarded the secret. In order not to be suspected of making or using the incense for profane purposes, they forbade their women from wearing any kind of perfume.” From Jewish Wisdom, Rabbi Joseph Telushkin, p. 23- “Rabbi Aharon Kotler, a prominent twentieth-century Othodox sage, knew that his behavior was subjected to careful scrutiny. Once, when he entered the synagogue and again when he left, he was observed giving money to the same beggar. Questioned as to why he gave to the man twice, Kotler replied that he feared someone might see him passing the beggar, and conclude that the man was unworthy of being helped.” Baba Metzia 83a- “Some employees negligently broke a barrel of wine belonging to Rabbah son of Bar Hanana, and he seized their cloaks (when they failed to pay for the damage). They went and complained to Rav. ‘Return their cloaks to them,’ he ordered. ‘Is that the law?’ asked Rabbah. ‘Yes,’ he answered, ‘for it is written ‘So follow the way of the good.’’ He returned the cloaks to the porters. Then they complained (to Rav): ‘We are poor men, we have worked all day and are hungry, and we have nothing.’ ‘Go and pay them,’ Rav ordered Rabbah. ‘Is that the law?’ he asked. ‘Yes,’ he replied, ‘(for see the end of the verse), ‘and keep to the paths of the just.’” From Menachem Marc Kellner, Contemporary Jewish Ethics, pp. 336-337- “Rab, a famous colleague of Samuel’s, had said: ‘(Earthenware) pots in which leaven is cooked, and which is absorbed and retained some of it, must be broken on Passover.’ The sellers of new pots saw a chance to enrich themselves during the Passover season when the demand for fresh pots would be great; the harassed housewife would have been forced to pay unreasonable prices. But Samuel told these merchants: ‘Unless you charge an equitable price for your pots, I shall decide in accordance with Rabbi Simeon who permits the use of such pots after Passover. Then people will not break their pots before Passover, as Rab suggested, and you will find yourselves abundantly overstocked.’” Obligations of Employees JT Demai 7:4- “A man must not plough with his ox at night and hire it out by day, nor must he himself work at his own affairs at night , and hire himself out by day. And he must not undertake fasts of other ascetic deprivations, because the ensuing weakness will diminish the amount of work he can perform for his employer. Rabbi Yochanan went to a place, and found the school teacher was fatigued. He asked for the cause. They said to him, “Because he fasts.” He said to the man, “You are forbidden to act in this manner.” Moses Maimonides- “Just as the employer is enjoined not to deprive the poor worker of his hire or withhold it from him when it is due, so is the worker enjoined not to deprive the employer of the benefit of his work by frittering away his time, a little here and a little there, thus wasting the whole day deceitfully. Indeed, the worker must be very punctilious in the matter of time.” (Laws of Hiring, 13:7) Berachot 16a- “Workers who are working for an employer should recite the Shema and pray. When they eat bread they should not recite the blessing before eating, and should only recite the after-blessing in an abridged form.” Mesilat Yesharim Ch. 11- “The bottom line is: When someone is hired for another’s work, all of the involved time is actually sold to the employer! Whatever he takes from them for himself is simply theft. Even if he performs a mitzvah during that time, it will not be considered righteousness but rather a transgression. . . God is interested only in integrity, as it is written (Psalm 101), “My eyes are trained upon those of the land with integrity, they shall sit with Me.”” The Greatest Mitzvah Moses Maimonides- “There are eight levels of charity, each greater than the next. . .The greatest level, above which there is no greater, is to support a fellow Jew by endowing him with a gift or loan, or entering into a partnership with him, or finding employment for him, in order to strengthen his hand until he need no longer be dependent upon others.” To Learn More Note- Maimonides’ Mishneh Torah contains an entire section on Hilchot Mechirah- Laws of Selling. Its 30 chapters cover the following mitzvot:

1. a) The laws of buying and selling;

2. b) Not to cheat when buying and selling;

3. c) Not to cause discomfort through words;

4. d) Not to cheat a convert financially;

5. e) Not to cause a convert discomfort through words. “If one is honest in his business dealing and people esteem him, it is accounted to him as though he had fulfilled the whole Torah.” Mechilta B’Shalach chapter 1 Prepared by: Rabbi Bonnie Koppell Temple Chai 4645 E. Marilyn Rd. Phoenix, AZ 85032 www.templechai.com (602) 971-1234 rabbikoppell@templechai.com