The Ethics of Turning In a Client
As freelancers, we work with a lot of different people. Sometimes those people do things that we know are in violation of the law, whether or not we personally think that they’re doing something wrong. That leaves us in a position to decide what we need to do about that illegal activity.
There aren’t a lot of options. We can ignore such situations, turn in the person responsible or try to tackle the issue without getting the law involved. But while the strategies for responding to someone doing something wrong are simple, the decision of which to choose is anything but. And if the person in question is a client, it gets much harder.
In the eyes of the law, you should, of course, report every crime. Let’s dig a little deeper into the situation, though.
’Victimless Crimes’ Are Complicated
I have little doubt that if any of us saw a murder or a burglary happen, we would call the cops. But most of the illegal activity that takes place around a business is less clearly wrong. Taxes can provide a good example: no one is directly injured as a result of a business owner deciding to fudge the numbers a little. It’s illegal, of course, but it’s also common.
There are levels to how ‘victimless’ a crime might seem. As freelancers, we’re likely to get a little more upset over copyright infringement than tax fraud — after all, we don’t want our own copyrights disrespected. We can see a clear victim there. And if a client is violating labor laws and putting our status as independent contractors at risk, we can get very concerned. It’s not my job to teach you ethics, but it’s worth considering how you might react in any of these situations, whether or not you could see yourself as the victim.
But Clients Have Value
One of the reasons these situations can seem so difficult to resolve is because we see clients as having value. They are real people, but they are also our sources of income. If a client disappears — no matter the reason — we can find ourselves in some financial trouble.
We want the question of turning someone in to be an easy one: if they did something illegal, turn them in. But it’s not that simple for many people.
Even in situations where a freelancer is getting a raw deal, that person may fight hard to hold on to a client. Every so often, the IRS goes looking for companies that are treating people who should legally be treated as employees as freelancers.
The workers in these situations aren’t always aware of their rights, but there are ways for those who are to turn in their employers anonymously. But it’s hard to convince someone to blow the whistle in that situation because even if they aren’t fired for reporting the problem, the company may get rid of several workers to pay for the rest.
We want the question of turning someone in to be an easy one: if they did something illegal, turn them in. But it’s not that simple for many people. As long as the benefits of continuing to work with someone outweigh the costs, many people are comfortable continuing.
When law enforcement officials offer rewards for turning in tax evaders or people who have taken other illegal actions, they’re trying to make that decision simpler. But weighing a reward against lost income — or worse, loss of reputation with future clients — can make the matter even more difficult.
The Right Thing
I can’t tell you to do anything but turn in someone that you see doing something illegal. Saying anything else would constitute bad legal advice, as well as make me look bad to any of my own clients who go looking for me online. And, by the way, I’m not a lawyer, so you shouldn’t rely on me for legal advice. If the situation is complicated enough, you should consider consulting with a lawyer, especially if you could get in trouble for your client’s misdeeds.
But I do suggest that you think about hypothetical situations in advance. When I first encountered some shady behavior on the part of a client, I froze. I’d never even considered being in that situation and I had a very difficult time finding a solution that I felt was right. But the more I’ve thought about potential issues, the better equipped I’ve been when related problems have popped up. You can’t resolve every problem before it occurs, but deciding where you draw the line now will certainly make things easier.
You should always seek independent financial advice and thoroughly read terms and conditions relating to any insurance, tax, legal, or financial issue, service, or product. This article is intended as a guide only.