Caught in the Act How Corporate Scandals Hurt Employees

Non-Disclosure Agreements and Externalities from Silence

“…In turn, policies that enable workers to speak freelyand that limit the ability of firms to restrict disparaging speech generally (as opposed to only unlawful activity)-will further mitigate these negative externalities. 4 Our results also contribute to the body of literature concerned with firm reputation (Diamond, 1989;Tadelis, 1999;Lange et al, 2011;Benson et al, 2020;Gadgil and Sockin, 2020), reputation management (Melo and Garrido-Morgado, 2012;Lii and Lee, 2012;Barrage et al, 2014;Lloyd-Smith and An, 2019), and labor market sorting (Sorkin, 2018;Sullivan and To, 2014;Maestas et al, 2018;Sockin, 2021). Respectively, these literatures highlight the importance of reputation as a meaningful asset for firms, the strategies firms use in order to maintain their reputations (e.g., advertising or corporate social responsibility), and the importance of non-wage amenities for labor market sorting.…”

Event-Oriented Organizational Behavior Research: A Multilevel Review and Agenda for Future Research

“…Organizational misconduct (e.g., financial scandals and pollution incidents) also appears to have significant implications for employees. Scandal events damage employees' perceptions of senior management and firm culture and cause a significant decline in employees' performance pay, especially for less experienced workers (Gadgil & Sockin, 2020). Financial misconduct events negatively impact employees' perceptions of their firms and managers (Zhou & Makridis, 2019).…”

“…Organizations and their workers are significantly affected by a wide variety of events at different levels. Coworker turnover (Felps et al, 2009), interruptive team events (Zellmer-Bruhn, 2003), organizational scandals (Gadgil & Sockin, 2020), and terrorist attacks (Bacharach & Bamberger, 2007) are but a few examples of impactful events that can substantially impact employees' psychological states, attitudes, and behaviors. For example, work-family conflict episodes may be followed by acute psychological strain (French & Allen, 2020).…”

Show Me the Amenity: Are Higher-Paying Firms Better All Around?

“…52 For a further discussion of overall fringe benefits ratings from Glassdoor, see Gadgil and Sockin (2020). Notes: This table displays the coefficients from regressions of the firm fixed effects for job satisfaction on the firm fixed effects for wages incorporating firm-level differences in satisfaction with fringe benefits.…”

“…Benefits ratings premia reflect the firm fixed effects from a two-way fixed effects model (with worker fixed effects) on the rating the worker assigns to the firms' overall fringe benefits package. For further description of Glassdoor benefits data, see Gadgil and Sockin (2020). Standard errors are bootstrapped.…”