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

How to Ensure Bad Customer Service: the Wal-Mart Method

In a recent article on Forbes.com, Rick Ungar provides an interesting juxtaposition of the stellar success of CostCo versus the anemic growth of Wal-Mart. The result is a portait of how CostCo’s success is inextricably tied to how it treats its employees, and how that treatment creates a positive customer experience. CostCo’s brand of “ethical capitalism,” however, is in stark contrast to Wal-Mart’s model, which lies somewhere between feudalism and indentured servitude. Apparently jealous of the customer service awards received by Comcast, America Online, Electronic Arts, and Bank of America, Wal-Mart has set out to ensure that no company can compete with it, especially in the arena of poor customer service.

800px-Walmart_exterior

In an effort to increase profits and reduce employee benefits, Wal-Mart has cut employee staff, pay, and hours so that many of its employees are able to qualify for Medicaid. A study found that a single Wal-Mart superstore with 300 employees can cost taxpayers as much as $1.7 million. With a little over 3,000 superstores in the United States, this means that taxpayers could be subsidizing the healthcare of Wal-Mart’s employees to the tune of $5.1 billion a year. Essentially, Wal-Mart uses state-supported healthcare in lieu of providing quality wages and affordable employee benefits.

This is not about whether or not the government should provide healthcare for those in poverty, or whether a company has a moral obligation to provide healthcare to its employees. Those are questions best left to pundits and activists. However, it is undeniable that a company’s success is tied to its customer service. All the behemoth companies listed above did not start with terrible customer service. They grew to be that way. The only thing keeping them afloat now is their size and sheer tenacity. A small business must look to these companies as examples of what NOT to do. If you want to have good customer service, you must have satisfied employees with good morale. One cannot run a company based on the motto: “The beatings will continue until morale improves.”

Consumers can expect to be treated with the same level of respect and dignity that an worker receives from his employer. In other words, treat your employees in the same way you want them to treat your customers.

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

Want Great Publicity? Honor a Local Hero!

In the aftermath of the horrors caused in Cleveland, Ohio by Ariel Castro, the man charged with keeping three women captive for over 10 years, one particular person has stood out.  Charles Ramsey, Castro’s neighbor, rescued the three women and then proceeded to gain national recognition after his colorful rendition of the events.  Since then, local small business owner Scott Kuhn has honored Ramsey with the “Chuck Card,” a card granting Ramsey free burgers for life.

“We want to honor our local hero with local food,” Kuhn told reporters.

In addition, Hodge’s Cleveland, the restaurant where Ramsey works as a dishwasher, unveiled a new Charles Ramsey-inspired hamburger.

Is this opportunism?  Exploitation?

No.  Plain and simple, these are the acts of good small businesses honoring a local hero for doing what was right. Ramsey refused a reward, opting instead to turn over the money to the victims. While Ramsey’s actions gained the nation’s attention,  plenty of opportunities exist in the backyards of millions of businesses nationwide.

They sayfireman-100722_640 any press is good press.  That’s not true.  Good press is good press.  Bad press is a failure on the part of a business to control their image and/or business practices. Good press, on the other hand, should be treasured and sought after. One of the best ways to gain good press, then, is to honor those in your community that deserve honoring.

Now, this is not the same as charity. Generally speaking, charity is generosity and helpfulness, especially towards the needy or suffering. An honorarium, however, is a payment for a service on which custom or propriety forbids a price to be set. What this means is that heroes do not charge for their heroism. Thus, it falls upon society to show our appreciation for their actions.

Knowing this, the rest should be easy. Apportion part of your marketing budget as honoraria to local heroes. So, if you run a carpet cleaning business and you hear about a firefighter who rescued a family, send him a letter with a gift certificate for a free house cleaning. If you sell makeup, give a complete make over to the class valedictorian at a local high school. The opportunities are limitless, the goodwill within your community is priceless, and you will know that you have done a good thing.

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

Don’t Panic! Employees’ Smartphones and Litigation

Few will deny that the news media has a vested interest in ensuring they drive as much traffic to their sources of information (be they television, print, or online). Occasionally, the media takes a topic and blows it so out of proportion that it hardly warrants comment. On the other hand, sometimes they provide information that can cause the cautious business owner to take actions that are based more on fear than common sense.

NBC recently posted an article about companies’ employees using their privately-owned smartphones (i.e., iPhones, Droids, etc.) for work-related purposes. The thrust of the article focused on how those employees’ phones could be confiscated during litigation if the phones contained information that needed to be turned over to the other party. The article rolls out a technology law expert and serves up heaps of fear-based journalism.

While it is certainly possible that a court may require  a company to relinquish its employees’ phones, it is more important to know why this may occur. First, a primer in civil litigation: When a person (or company) feels like they’ve been harmed in some way by another person (or company), they can sue that other person. This is often called a “Petition.” Once a petition has been filed with the court, the person being sued is usually required to respond. This is called an “Answer.” Once the court receives the defendant’s (aka “Respondent”) answer, the parties then move on to what is known as the “Discovery Phase” of litigation.  During discovery, the parties engage in requesting information from each other. One of the parts of discovery that can be very onerous is “Production.” Production is where one party asks the other to turn over relevant documents, emails, photos, etc. The producing party must make a good faith effort to collect all of this information and provide it upon demand. These demands, however, must be reasonable and relevant. This is where we get to smartphones.

cell phoneThe reason smartphones dominate the business landscape is due to their unparalleled convenience in communicating by email, chat, etc. But what if an employee uses their own phone for business purposes? For instance, your salesperson uses her phone to email an invoice to a client for an order they placed.  The examples and uses are limitless. But what if those texts and emails contain “discoverable” information that needs to be turned over during production? This is where the reality of civil litigation comes into play.

For the vast majority of business and employees, the practical need to use their phones for business purposes FAR outweighs the detriment of having to relinquish the phones for litigation. It would be like refraining from using an umbrella because lightning may strike it; in the meantime, however, you are soaking wet whenever it rains. The reality is that even if those phones contain necessary information, the impulse to start rounding up phones is ludicrous. There are any number of steps that an employer can take before implementing a smartphone confiscation plan.

Most importantly, the company’s attorney will be working on this matter from the beginning (no company is too small to have an attorney; the Bexley Law Firm, LLC, for example, was created specifically to provide small business legal consultation to companies in the Gwinnett and Greater Atlanta areas). A competent attorney will object to a request demanding private cell phone information. Even if a court requires such information to be handed over, handing over the phones would be highly unlikely. That would be like demanding the photos to be turned over — and then demanding the cameras, too! The employees may have to give up their phones for an afternoon while an information technician pulls information off of the phone, which can then be done in waves depending on the size of the staff.

What is most important to remember is that although technology can make litigation more complicated or stressful, a good attorney in your corner will be there to ensure that the impact litigation has on your business is minimized and that your employees are protected from intrusive demands during discovery.

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

The Paperless Office and a Litigation-Resistant Business

Before beginning, the Bexley Law Firm sends its deepest condolences and prayers to the Boston Marathon bombing victims and their families. In order to avoid scams masquerading as charities, follow this link to see how you can help.

11868876_a8d00459ab_zLast week, I discussed and praised the innovation of Office Depot and its paperless receipt system. I concluded the blog by teasing that this week’s post would be about the paperless office model and how that relates to a litigation-resistant business.

First, what do I mean by a “paperless office?” Wikipedia defines a paperless office as “a work environment in which the use of paper is eliminated or greatly reduced.” As the article explains, this is accomplished by digitally converting documents, forms, receipts and other paper records. A paperless office can save a small business owner significant money, boost productivity, save space, make documentation and information sharing easier, and keep personal information more secure.

Further, I coined the term “litigation-resistant business” to mean any organization which has taken an active role in reducing its general exposure to civil and criminal liability. A business can reduce its liability, and therefore increasing its resistance to litigation, in three steps: 1) Organization, 2) Education, and 3) Implementation. Future blog posts will explain these concepts in more depth, but suffice it to say that that a small business owner must be aware of his or her business’s unique circumstances that make it susceptible to litigation.

All businesses are in some degree of risk of litigation. Just as there’s no such thing as “a risk-free” investment, so too is a “litigation-free business” a figment. Risk and liability can be found in any number of sources. Examples of sources of risk and liability can be the particular nature of the business (i.e., a moving company is especially vulnerable to damaging a person’s property), a pervasive regulatory environment (i.e., a company that performs blasting activities at a granite quarry), or simply employee conduct or behavior (i.e., a disorganized office manager or a delivery driver with a prescription drug addiction). However, an organization can mitigate, or reduce, the chances of facing the costly ordeal of litigation.

A paperless office has significant advantages for maintaining a litigation-resistant business, but a few unforeseen disadvantages as well. Importantly, a paperless office DOES NOT mean a “recordless” office.  Quite the contrary. A paperless office ensures that its records are stored digitally, as opposed to in a filing cabinet. Because a business’s records are kept digitally (and ideally backed up using offsite cloud storage, such as Carbonite), a company has instant access to its important records. These records can help prevent litigation by showing that it filed a particular document on time, that it performed regular safety and health examinations of its equipment or work areas, or that it abided by any number of federal, state, or local regulations.

On the other hand, for a company that has questionable business practices, having easily accessed records may come back to bite them. During the discovery phase of litigation, for example, a business that regularly discriminates against a particular class of job applicant may be forced to turn over highly incriminating email correspondence showing a history of discriminatory actions.

For the vast majority of businesses, however, a paperless office confers far more benefits than not. From reduced operational costs, to ease of access of records, to reduced office clutter, a paperless office will put organizations of any size on the forefront of technology and provide them with an inherent competitive advantage over their competition

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

Office Depot and Paperless Transactions

This post will be about how an office supply megastore can provide inspiration to small businesses.

But first, a story.  The Hero of this story is about a young attorney working for the United States Department of Labor. The Hero is performing heroic acts of heroism by ensuring America’s workers are able to work in safe environments and are able to come back home to their families with all the arms, legs, and heads still attached.  Hardworking mothers and fathers across the country loved the U.S. Department of Labor, even if they didn’ t know why. However, deep in the Haunted Swamp known as “Dee Cee,” a twisted cabal of warlocks and witches conspired to ruin America. The witches and warlocks argued and fought each other and through their loathsome scheming, they created a foul beast known as “Sequester” to ravage the countryside. Long story short, the Hero will lose his job and he decided to start his own firm and needed to become a notary because it’s a pain in the neck to find one on short notice.

So the Hero — that is, I — took my business to Office Depot. When you become a notary, the county only gives you a certificate for your license, but nothing else really (other than information). So, to get the actual seal, you have to go to an office supply store and they’ll produce a seal for you.  What is cool about Office Depot, and the belabored point of this blog post, is their receipt system.

Office Depot’s “Green” store in Austin, Texas.

(Photo credit: Wikipedia)

Full disclosure: I hate receipts. Seriously. I find holding onto scraps of paper for some phantom, future purpose is mind numbing. I know, I know, you need them in case you have to return something or for deductions.  But think about how many receipts you get on a consistent basis that you don’t really need.  These are wastes of paper, resources, and create clutter. But at Office Depot, you are given  three options: paper receipt, paper receipt and emailed receipt, or just email the receipt. I always choose the third option.

The paperless receipt option fits very well into my business model. Attorneys are notorious for being wasteful with office resources, such as paper, copies, etc. This wastefulness creates a great disservice to the client because it increases overhead costs, costs that ultimately get passed along to the client. Under the paperless model, an office reduces its operating costs by minimizing the amount of paper and ink. The Bexley Law Firm encourages not only law firms, but also small businesses, to think about the amount of resources used and how those resources will affect their bottom line. This is not to say, of course, that a business should not keep records. Proper recordkeeping is essential to having a litigation-resistant business.

In the next few blog posts, I’ll speak more about my philosophy on paperless recordkeeping and what it means to have a “litigation-resistent office.”

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