Continuing my Friday series on keeping your business out of court, let’s focus on a mistake that too many businesspeople make. On the theory that “the best defense is a good offense,” some people make it all too clear to their contractors, suppliers, and consultants that, if a single mistake is made, they’ll take the offender straight to court. Taking such an aggressive stance might seem like good risk management at first blush, but it can backfire. Here’s why:

Some people just won’t do business with customers and clients who continually threaten to sue unless everything goes exactly their way. It’s a sensible way to reduce their litigation risk, and it certainly makes their lives less stressful. They wouldn’t do business at gunpoint, so they refuse to do business with potential lawsuits constantly hanging over their heads. If you push those people too far with threats of litigation they’ll simply stop doing business with you, and you may have trouble finding a competent replacement.

Other people will do business with an in-your-face potential plaintiff, but if they’re smart they’ll be extra-careful not only to avoid mistakes, but also to cover themselves. They’ll document every conversation, keep copies of every e-mail and scrap of paper, and load up their communications with disclaimers. It’ll be just that much more difficult to have a candid (never mind civil) conversation and, should they make a mistake, they’ll probably be loathe to admit it. That, in turn, may make it harder for you to address problems and rectify errors before they blow up into disasters. It will also mean that those people will probably have a well-documented file on every mistake you ever made and, because you’ve been so unpleasant, that they won’t be the least bit reluctant to use them against you.

This is not to say that you shouldn’t ever sue a consultant or contractor. Sometimes, despite everyone’s best efforts, the only way to resolve a problem is to tell it to a judge. But if you’ve been one of those people who’s constantly threatening to sue your business associates, recognize that you may well find yourself on the defensive if you do. Our legal system allows defendants not only to offer explanations for their own actions, but to raise their own complaints against plaintiffs. It’s not unheard of for plaintiffs not only to lose their own suits, but to end up spending many years and ultimately paying a lot of money when a judge or jury finds that the defendants were the more gravely wronged parties.

Litigation is a time-consuming, stressful and expensive way to resolve disputes. It’s not to be undertaken lightly, and threats to sue are all too often as mean-spirited as they are unfounded. Think of litigation not as a stick with which to beat your business associates, but as a last resort. A more conciliatory attitude will strengthen your relationships. It may also keep your business out of court.

Topics: Business Ethics, Lauren Recommends, Legal Ethics, Risk Management, Social Ethics, business communications, corporate responsibility, ethics | No Comments »

President Obama’s State of the Union has stirred up a hornet’s nest in Washington. It’ll be awhile before the dust settles enough to know who’s coming down where on his various proposals. However, I want to focus on one aspect of his speech that seems to me to be very relevant to business ethics: the growing economic inequality that’s making it increasingly difficult for average Americans to get by.

There’s a lot of talk about taxing wealthy individuals. Mitt Romney is scrambling to defend the 15% income taxes he pays each year, and Warren Buffet drew a lot of positive press when he observed that his tax rate is lower than that of his secretary. But corporate tax rates are getting less attention, and it’s time to rectify that.

Public Campaign, a self-described ” non-profit, non-partisan organization dedicated to sweeping campaign reform that aims to dramatically reduce the role of big special interest money in American politics” (phew!) issued a report last December that demonstrates how big corporations are using their lobbying muscle to reduce their taxes to a pittance. Relying on statistics from its non-profit peers Citizens for Tax Justice and the Center for Responsive Politics, Public Campaign reports that some of the largest corporations in the United States have spent millions on lobbyists in the past three years and, in the process, managed to eliminate their tax liability or even receive tax rebates. That’s right; some corporations are actually getting tax money from the government even as they lay off workers and drive profits into the hands of their shareholders.

The Supreme Court recently opined that corporations have the same First Amendment rights as people when it comes to political advertising. Regardless of whether one agrees with the Court (and I don’t), if corporations do have rights they should accept the responsibilities that go with them. Corporations use the infrastructure and services that the government provides, and they should pay their fair share of the taxes that support them. It’s time voters woke up to the tax breaks corporations receive, and time for politicians to prevent corporate lobbyists from picking the pockets of the 99% of Americans who aren’t among the wealthy few.

To read the Public Campaign report, click here.

Topics: Business Ethics, Corporate Governance, Social Ethics, corporate responsibility, ethics | No Comments »

Righteous indignation often strikes me as misplaced and sometimes even a little silly. When people start posturing they usually stop listening, so it can be very hard to have a real conversation with someone who’s up on his or her high horse. Nonetheless, I’m about to climb onto mine, and here’s why.

Change.org is a wonderful website that offers people the opportunity to sign petitions about topics that are of interest to them. It’s also a great source of information about things that really shouldn’t be happening, and here’s one especially dreadful example. Change.org recently invited me to sign a petition urging the Food and Drug Administration to limit the amounts of arsenic and lead in children’s juice boxes. Reportedly, a new investigation by Consumer Reports found that roughly 10 percent of the apple and grape juice boxes it sampled “had arsenic levels exceeding federal drinking water standards, and one in four had lead levels higher than the bottled water limit.”

Ye gods.

Yes, the FDA should do something about the levels of poison in juice that’s specifically packaged for consumption by kids. I’m appalled that it hasn’t done so already. But I’m even more disgusted that any company that markets juice to children wouldn’t act on its own to remove unsafe levels of arsenic and lead. Have American corporations really become so addicted to profit that they won’t even spend a little extra money to protect kids from obvious poisons in their products? The FDA should blush at its failure to police juice box producers, but the producers themselves should be burning with shame.

Please join me in signing the petition by clicking here.

Topics: Business Ethics, Social Ethics, corporate responsibility, customer relations, ethics | No Comments »

Yesterday’s blackout of Wikipedia and other highly trafficked websites must have put quite a dent in a lot of people’s time online. The blackout was, of course, to protest Congressional proposals to enact tough new laws against online piracy. The entertainment industry, the publishing industry, and other providers of creative content are strongly in favor of the new laws, while web gurus oppose anything that compromises the freewheeling, unregulated culture of the Internet.

I have a lot of sympathy for the writers and artists who are sick of seeing their creative work bootlegged and distributed around the world for free. And yes, it matters. Apart from a handful of superstars, writers and artists don’t usually make a whole lot of money. Every time a fan bootlegs their work online instead of paying for it, the artists and writers lose a piece of their livelihood. That’s just plain unfair. At the same time, I recognize that it’s not always easy to tell whether something on the Internet is copyrighted or not, so there’s a very real likelihood that anti-piracy laws would be enforced unfairly. And, for that matter, there’s always the question of whether the proposed laws can be enforced, especially if the “pirates” are based outside our borders. It’s not as though our existing copyright laws have been especially effective.

This may be naive, but I think it would be better if writers and artists took their case directly to their fans. If online publications and artwork were clearly marked as copyrighted (when they are) but available for sale at a reasonable price, wouldn’t most consumers respect the creators’ rights and buy what they wanted? I’d be interested to hear from my readers on this one. To me, it’s better for artists and their fans to respect one another than for the government to adopt complicated laws that may not even solve the problem. Do you agree?

Topics: Business Ethics, Social Ethics, business communications, customer relations, ethics | 1 Comment »

The Wall Street Journal reported today that Tropicana orange juice producer Pepsico Inc. didn’t notify the Food and Drug Administration that there was a fungicide called carbendazim in its orange juice. According to the Journal, another juice company reported to the FDA that it found low levels of the carbendazim in its own orange juice and that of a competitor. The FDA didn’t identify the other company to protect its confidentiality. However, since Coca-Cola Co. and Pepsico reported control almost two-thirds of the U.S. orange juice market, one needn’t be a rocket scientist to make an educated guess about where the report came from.

Carbendazim isn’t approved for use on food plants in the U.S., but the FDA reportedly said the fungicide was used on the 2011 Brazilian orange crop. Brazilian oranges comprise about 12.5% of the U.S. orange-juice concentrate supply, so that’s probably how low levels of carbendazim snuck into Tropicana’s juice. Yes, it was reportedly at a “low level,” whatever that means, but since carbendazim has been linked to infertility and testicular damage in lab animals, it’s not a substance that any of us would probably be eager to consume.

This story troubles me on several counts. First, if there’s a potentially dangerous contaminant in its orange juice, shouldn’t Pepsico have reported it? Second, whatever company did report it apparently gets rewarded by the FDA with a pledge of confidentiality. In a time when businesses are strongly encouraged to be more transparent, how is the FDA’s approach a good thing? And, for that matter, if the reporting company turned Pepsico in for some competitive purpose, shouldn’t Pepsico know who blew the whistle? And what is the FDA doing to safeguard consumers - especially children - from drinking contaminated orange juice? And if the amount of fungicide in the orange juice is too small to matter, why would the Journal go to the trouble of publishing the story?

There’s so much going on in the world right now that the safety of our nation’s food supply probably isn’t anywhere near the top of most politicians’ list of priorities. This isn’t the first time questions have arisen about contaminants in our food, however, and it’s troubling that, once again, there don’t seem to be satisfactory answers. For whatever reason, it appears that the FDA may not be able to ensure the safety of the food Americans eat, and that’s all the more reason for food producers to do a better job of policing themselves. Juice producers shouldn’t buy imported oranges that are tainted with fungicide, even if it means they have to raise their prices or decrease the supply.

To read the Journal article, click here.

Topics: Business Ethics, Risk Management, Social Ethics, corporate responsibility, customer relations, ethics | No Comments »

In April of last year, I reported on the efforts of People for the Ethical Treatment of Animals to call to account the Feld Corporation, the company that operates the Ringling Brothers Barnum & Bailey Circus. At the time, Ringling had been accused of abusing its elephants and allowing a lion to die by refusing to provide an adequate cooling system or water to the big cat during a train trip across the desert. I was upset then - I’m more so now.

Ingrid Newkirk, President and co-founder of PETA, appeared on the Kojo Nnamdi Show this afternoon. She reported that the U.S. Department of Agriculture recently hit Ringing Bros. with a $270,00 fine, the single largest penalty ever assessed against a U.S. circus for mistreatment of its animal performers. I was elated … until Ms. Newkirk observed that $270,000 is “manicure money” for the circus and its parent Feld Entertainment, and that the fine essentially gave the circus a clean slate from which to start - and maybe abuse - again.

Thinking that Ms. Newkirk’s claims might be a little exaggerated, I did some independent checking. Feld Entertainment is a private company, so it’s more difficult to verify its profit margins. However, in 2010 the Seattle Times reported, “Feld Entertainment these days tours 67 countries, tallying more than 5,000 performances a year. Its annual audience exceeds 30 million, generating nearly $900 million in revenue. On a big weekend, the far-flung empire is entertaining nearly 1 million patrons from Denmark to Greece to Wheeling, W.Va.” Ms. Newkirk was right; compared to $900 million, $270,00 doesn’t amount to much.

And that is precisely why I think that regulators either need to go big or go home where fines are concerned. Even this largest penalty ever assessed against a circus could be viewed as little more than an annoying cost of doing business for a company that deals in millions of dollars and patrons. Minimal penalties send a mixed message at best. If the USDA is really serious about giving companies a real incentive not to abuse animals, it needs to impose meaningful fines that can’t be paid back with peanuts and cotton candy.

Topics: Business Ethics, Social Ethics, corporate responsibility, ethics | No Comments »

Don’t manage impressions

01.07.12 By Lauren

Continuing my Friday series on keeping your business out of court, I want to touch on a subject that’s been bugging me of late. Recently, I’ve been called upon to deal with a group of professionals who didn’t handle a sensitive situation particularly well. Their behavior offers a lesson that smart businesspeople would be sensible to heed.

Imagine, for a moment, that you and your colleagues had, collectively, botched a professional gig. You misunderstood a situation, misdiagnosed a problem, or recommended a course of action that turned out to be ineffective or, worse, downright destructive. The problem blew up in your face, and now your professional reputation (and maybe your livelihood) is on the line.

Sadly, all too many businesspeople would respond by hunkering down and trying to manage impressions. They’d dig in on their initial analysis, insist that their original recommendations were good, and generally try to blame the outcome on the poor client, patient or other customer who came to them for help. That strategy can work for a while - impressions can be managed, and the appearance of professional success can be briefly conjured. Trouble is, even the smoothest surface can scratch, and once that happens all the ugly mistakes underneath come pouring out. At that point, the businessperson who tried to salvage a bad situation with impression management not only looks incompetent, she looks dishonest, too.

Life is frequently unpredictable and messy, and everyone - repeat everyone - makes mistakes. When you or someone in your company makes a mistake, don’t compound the error by trying to hide it beyond a managed impression. Dig below the surface and solve the problem, even if it costs you a little money or some professional embarrassment. Not only will you get a better result, you’ll also gain the respect of anyone who knows that you put substance over form. And, along the way, you might also keep your business out of court.

Topics: Apologies, Business Ethics, Personal Ethics, Professional Ethics, Risk Management, Social Ethics, business communications, corporate responsibility, customer relations, ethics | No Comments »

Friends know that the oldest decoration in my office is a little ceramic figurine of Jiminy Cricket, Pinnochio’s “conscience” in the classic Disney film of the same name. I bought the figurine shortly after graduating from law school, and keep in where it’s never far from my sight. Why? Because I believe that an attorney without a conscience is a very scary thing and it reminds me, as Jiminy himself would say, to always let my conscience be my guide.

Having grown up with Pinnochio and other Disney movies that were downright preachy about honesty and responsibility, I was more than a little surprised when my daughter invited me to watch several sitcoms on the Disney Channel over our holiday break. In episode after episode, the stories were disturbingly the same. One or more of the characters tried to deceive someone: a teacher, a close friend, a parent or a spouse. The deceiver went to ridiculous lengths to conceal the lie, the lie was invariably revealed, and the deceiver humbly apologized and was forgiven. Those stories might have taught children to tell the truth and take responsibility for their mistakes, if the deceiving characters hadn’t returned to their manipulative ways after an episode or two. Sadly, though, they always did.

So, apart from my concerns about how Disney’s sitcoms are affecting my own daughter, what’s the relevance to business ethics? First, I’m more than a little miffed that Disney sells itself to parents as a producer of high-quality family entertainment while teaching kids that lying is funny and forgiveable. (Talk about deceptive marketing …) But second, I wonder what today’s children - who will grow up to be tomorrow’s businesspeople and professionals - are learning from Disney about ethics. Nobody does a more effective job of enticing children than Disney’s magic machine. I’m just sorry to see that magic being used to teach kids that dishonesty and manipulation are to be applauded and not condemned.

Maybe it’s time Disney brought back Jiminy Cricket.

Topics: Business Ethics, Social Ethics, business communications, corporate responsibility, customer relations, ethics | No Comments »

Believe!

12.23.11 By Lauren

Every once in a while, a movie comes out that knocks my socks off. “Arthur Christmas” (produced by those lovely English lunatics who brought you “Chicken Run” and “Wallace & Grommit”) did just that. Oh, it was clever. We now know why you can’t find Santa’s workshop on Google Earth (underground tunnels), how the man in red delivers 2 billion presents in a single night (Ninja elves - that’s all I’m going to say), and what Mrs. Claus does while her hubby’s at work (online flight courses and treaties with Greenland). We also learn that even the Claus family can get so caught up in the family business that they forget what Christmas is all about. But the thing that sent my daughter and me to the theatre for three separate viewings was that Santa’s bumbling younger son Arthur believes with all his soul that, on Christmas Eve, it’s absolutely and utterly imperative for every last child in the world to get a present from Santa so she’ll know Santa loves her. Arthur believes - and because he does, so do we.

And then, of course, there was the astonishing news from Italy that the Shroud of Turin is probably authentic after all. According to news reports, Italian scientists have tested the Shroud and concluded that it pretty much has to be the real thing because they can’t duplicate it using any technology that would have been available centuries ago. The skeptics will, no doubt, continue to carp, but the news has to be a real boost to people who believe.

So, what does all of this have to do with business ethics? Simply this: I think people are hard-wired to believe in something, and that it matters a lot what we believe. I also think that people can get so focused on profit margins and productivity that they lose track of why they’re really in business. It’s good to make money, but far better to make money in a way that contributes to the world’s welfare. So, as you wrap up your work this week and head home for the holidays, take a moment and ask yourself these questions. What do you believe in? Does your business support your beliefs? And, if not, how are you going to make it better in the coming year?

Merry Christmas, believers all.

Topics: Business Ethics, Legal Ethics, Professional Ethics, Social Ethics, corporate responsibility, customer relations, ethics | No Comments »

Lesliane Bouchard has her share of problems. According to her daughter, Kristiane Chappell, Ms. Bouchard is disabled and completely bedridden due to a painful spinal injury. And if that wasn’t bad enough, it seems that Ms. Bouchard and her family may not have a very merry Christmas this year. Her mortgage company, First Mortgage Corporation, is threatening to foreclose and take her home.

Ms. Bouchard has reportedly been approved to participate in the federal Hardest Hit State Fund, which makes her eligible to pay down enough of her mortgage to keep her in her home. Unfortunately, however, lenders aren’t required to participate in the program. In downright Grinchlike fashion, First Mortgage Corporation is allegedly refusing to do so, which may mean that Ms. Bouchard will be forced to leave her home. Ms. Chappell says that if her mother has to move her adult children will no longer be able to take equal shares of her care, so it will be harder and more expensive for the family to meet Ms. Bouchard’s needs.

Ms. Chappell has posted a petition on Change.org asking First Mortgage Corporation to do the decent thing and let Ms. Bourchard pay off some of her mortgage through the Hardest Hit State Fund. It’s not as though First Mortgage Corporation wouldn’t get paid, folks - it just means that the company would have to do a little more paperwork. HUD currently has First Mortgage Corporation on hold while everyone works to find a more compassionate solution. Come on, First Mortgage! It’s Christmas, for pity’s sake - have a heart and don’t evict a disabled schoolteacher from her home. Even Ebenezer Scrooge would know better.

If you agree with me that Ms. Bouchard deserves the opportunity to stay in her home, you can sign the petition by clicking here.

Topics: Business Ethics, Social Ethics, business communications, corporate responsibility, customer relations, ethics | 4 Comments »

« Previous Entries