No ethics in business or the workplace like that, unless unlawful discrimination of a protected class (sex, race, age) but those are darned hard to PROVE in a firing or hiring situation.
As far as nepotism or cronyism as being a reason for hiring, that's unfortunately both typical if not ubiquitous right now, it's all about "networking" and who you know, not what you know, in most workplaces.
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Nepotism in and of itself isn't illegal. Concur with counsel.
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The only "ethics" in the business world are those that the businesses themselves impose on themselves. Many companies have Codes of Conduct, or Business Ethics Guidelines by which they want their employees to govern themselves. However, other than internal ethical restraints, there is not a general "Rules of Ethics" applicable to business in general other than the laws on the books governing what is legal and unlawful, like certain government contracting rules or conflict of interest laws.
Of course, depending on the business there might be ethics codes. For instance, attorneys have an ethics code with which they must comply. There are other similar businesses, usually confined to what are traditionally called professions.
In your situation, an employer is allowed to make employment decisions while embroiled in a conflict of interest. An employer may have a policy to only hire blood relatives and not violate the law. Nepotism and favoritism are fully legal bases as long as the favoritism is not based on membership in a protected class of people.
Good luck to you.
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