What can small businesses learn from Paula Deen?

I am an active user of Facebook. The site provides an easy to use forum to keep in touch with friends, family, and to help promote the things that interest you. It is also a good way to share ideas and to discuss the topics of the day with people from a wide variety of backgrounds and cultures. So, when a hot issue starts making its way around the country, it is inevitable that Facebook users will be there to dissect it in every way possible.

I do not want to be sued by Paula Deen, so here is a picture of a pound of butter.

I do not want to be sued by Paula Deen, so here is a picture of a pound of butter.

Case in point: Paula Deen.

For those of you who have been living on an island with a basketball named Rawlings, here’s what happened: Paula Deen, a celebrated chef that specializes in rich, savory Southeastern American cuisine, is being sued by a former manager of one of Deen’s restaurants for sexual and racial harassment.  During a deposition of Deen, she admitted to having used racial epithets in the past. Once these statements were made public, Ms. Deen clumsily attempted to apologize and ultimately made things worse.  Coupled with some problematic public statements Deen made on some television shows, several very prominent sponsors have chosen to either not renew her contract, or to dump her altogether.

In reading the various responses and replies, I noticed that many people were either dismissive of her behavior or were apathetic to the inane ramblings of yet another celebrity. The problem is that Deen is not just some television celebrity, but a restaurant owner that operates 2 locations and employs dozens of people (not to mention the crew that records and produces her show). Paula Deen is a celebrity business owner, and a business owner still has obligations to her employees and business partners. And Deen’s business owners are none too pleased.

To date, Walmart, Target, Kmart, the Food Network, Sears, Home Depot, and others have all dropped Deen.  Caesar’s Entertainment, which owns Harrah’s Casinos, will rebrand all four of their Paula Deen in-house restaurants. A spokesperson for Caesar’s Entertainment stated, “it is in the best interest of both parties to part ways.”

When entering into partnerships with another business, whether for advertising, endorsements, or for services, small businesses should always ask, “Is this in my best interest?” Due diligence is essential before chaining one’s business to any other entity.  Despite popular misconception, the Food Network did not “fire” Deen, but it did not renew her contract. A fine difference, but an important one. Had her contract not been eligible for renewal right as this controversy broke, then it would have been much more difficult for the Food Network to have terminated the relationship.

A business must sustain itself on the quality of its product or service and its goodwill within the community. Thus, regardless of the personal politics of the owners, to take unnecessarily controversial stances is to court bad publicity. Generally speaking, the best path to take as a small business owner is that of least resistance. Do not alienate your customers. Do not ostracize your business partners. Do not discriminate against your employees. Walmart, Target, Home Depot, etc. risk losing 100 customers offended by Paula Deen’s comments for every one of those who would stick with her to the gates of Hell.

Robert S. Bexley, Attorney
Bexley Law Firm, LLC
http://www.bexleylawfirm.com

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Right to Life vs. Right to Work: The Walmart Method

I never intended this blog to become an anti-Walmart screed.  However, as noted in my last blog post (How to Ensure Bad Customer Service:  The Walmart Method), Walmart has long since become the one-stop-shopping source for what NOT to do when running a successful small business.

First, I need to address a straw-man: How can I possibly levy a charge against Walmart, the largest retailer on the planet, for being unsuccessful? The answer is complicated. Simply put, the Walmart of today has little in common with the Walmart of the past. In 1962, Sam Walton founded the Walmart Discount City store in Rogers, Arkansas. Walton created his discount store based on the model of low cost-high volume. He intended his stores to be for working class people. These principals are still followed today by the retail giant. However, the success of Walton’s first stores was also modeled on excellent customer service, happy workers, and fair business practices. If Sam Walton had created his first stores selling cheap products made from Chinese slave labor, with 1 cashier for every 10 customers waiting in line, and employee treatment that would make Bank of America green with envy, his 5 children would be working as managers for Target and K-Mart instead of being 5 of the wealthiest people in human existence.

Rather, the basis for this blog rests in a recent report of the increasingly awful treatment of  pregnant workers, Walmart’s role in discriminating against pregnant employees, and what small business owners can learn from those mistakes.

2Beautiful_Pregnancy_by_Chanclalej

In 2008, Heather Myers was pregnant and worked for Walmart. Following doctor’s orders, Myers kept a water bottle with her while stocking shelves to keep hydrated and to help with a urinary tract infection (a common ailment with pregnant women). Long story short, Myer’s manager gave her an ultimatum: stop drinking from a water bottle or you will be fired.  Myers chose Option C, quit and sue.  She chose correctly because Walmart eventually settled with her out of court.

Walmart settled with its former employee because its lawyers knew that it had a losing case. In 1978, Congress passed the Pregnancy Discrimination Act, a law protecting the employment rights of pregnant women in the workforce by amending Title VII of the Civil Rights Act of 1964 by prohibiting sex discrimination on the basis of pregnancy.  This Act was strengthened in 2008 by adding common ailments associated with being pregnant to the Americans with Disabilities Act, which prohibits discrimination against workers with disabilities (a common misconception is that pregnancy is a listed disability; it is not, but many of the associated health issues with a pregnancy are temporarily disabling, and are therefore protected).

There are two issues at play in how a small business treats its pregnant employees:  what is moral and what is legal.

There is no moral basis for an employer to harass, discriminate, or punish a pregnant employee. If we as a nation want to believe in a “right to life” and the “sanctity of life,” then we cannot then turn around and punish women for becoming pregnant and having the audacity to work in order to provide for their unborn children. In fact, morality demands that we hold employers to a higher standard when it concerns pregnant women who work. Thus, laws have been passed to protect women from undue punishment from the hands of employers who would rather fire a pregnant mother than to briefly accommodate that mother-to-be.

Legally, there is very little defense for not providing reasonable accommodations for a pregnant woman. We as a society have decided, both by law and through social compact, that certain individuals deserve increased protection due to historical discrimination in the workplace. Yet, even 35 years after the Pregnancy Discrimination Act and almost 50 years after the Civil Rights Act, employers are still discriminating against the most vulnerable and the most deserving of protection.

The best way to avoid litigation is to treat your employees with respect, be honest with your customers, treat your competition how you would want to be treated, and to follow the law.

Robert S. Bexley, Attorney
Bexley Law Firm, LLC
http://www.bexleylawfirm.com