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  • Food Labeling, the Law versus Self-Regulation

    Urvashi Rangan, director of the Consumer Safety and Sustainability Group for Consumer Reports , presented “Modern Food Labels — The Good, the Bad, the Ugly and Why We Need Them” at the Harvard Food Law Society ’s second annual conference, “Putting the Label on the Table.” The graphic below depicts nutrition facts required by law on a label. Consumers want more information on labels, but the law (FDA) does not require it. Companies want to be proactive and self-regulate. What should managers do to achieve the "perfect food label"?
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  • Keep Sponsored Stories and Promoted Tweets Legal

    The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. Managers need to know the FTC's new rules for " Dot Com Disclosures ." The new rules emphasize that consumer protection laws apply equally across all mediums, whether delivered on a desktop computer, a mobile device, or more traditional media such as television, radio, or print. The new guidance also explains that if an advertisement without a disclosure would be deceptive or unfair, or would otherwise violate a Commission rule, and the disclosure cannot be made clearly and conspicuously on a device or platform, then that device or platform should not be used. Brian Heidelberger is partner and chair of Advertising, Marketing, and Entertainment Law of Winston & Strawn. In this video, he explains the new rules. Why does a hashtag not equal disclosure?
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  • McDonald's Around the World

    McDonald's - Around the World from PosterBoy Edit on Vimeo . McDonald's has a strong identity around the world, as shown in this commercial. People in almost every country recognize the name. McDonald's legally protects its name or trademark to ensure consistent communications inside and outside the company, around the world. (See the " Global Logo and Trademark Standards Reference Guide " from 1999.) Why would McDonald's create a reference guide for its logo and trademark standards? How does McDonald's define trademark in the 1999 reference guide? What has changed about its trademark since 1999?

  • OSHA and Employee Rights

    No manager wants employees to be hurt on the job. Thus, most companies want to improve safety and reduce accidents and injuries. But accidents and fatalities occur. Occupational Safety and Health Administration (OSHA) is the federal agency responsible for workplace safety. The mission of OSHA is to save lives, prevent injuries, and protect the health of America's workers. Employee rights under OSHA include the right to a workplace free of hazards, receiving training, access to injury/illness and medical records, complaining to your employer or OSHA about a safety and health problem, participating in an OSHA inspection, and participating or testifying in any proceeding related to an OSHA inspection. Workplace hazards include toxic substances, electrical hazards, fall hazards, hazardous waste, machine hazards, infectious diseases, fire and explosion hazards, and dangerous atmospheres. Regardless of the unsafe condition, employees are not protected if they simply walk off the job. REFUSING WORK IS PROTECTED IF: Your right to refuse to do a task is protected if ALL of the following conditions are met: Where possible, you have asked the employer to eliminate the danger, and the employer failed to do so; and You refused to work in "good faith." This means that you must genuinely believe that an imminent danger exists. Your refusal cannot be a disguised attempt to harass your employer or disrupt business; and A reasonable person would agree that there is a real danger of death or serious injury; and There isn't enough time, due to the urgency of the hazard, to get it corrected through regular enforcement channels, such as requesting an OSHA inspection. CONDITIONS ARE MET, NEXT STEPS: When all of these conditions are met, you take the following steps: Ask your employer to correct the hazard; Ask your employer for other work; Tell your employer that you won't perform the work unless and until the hazard is corrected; and Remain at the worksite until ordered to leave by your employer. The table below offers a few "IF/THEN" scenarios to follow. IF THEN You believe working conditions are unsafe or unhealthful. Call your employer's attention to the problem. Your employer does not correct the hazard or disagrees with you about the extent of the hazard. You may file a complaint with OSHA. Your employer discriminates against you for refusing to perform the dangerous work. Contact OSHA immediately. Source: http://www.osha.gov/as/opa/worker/refuse.html Most employers want to prevent injuries on the job. Common methods used to prevent injuries include training and maintenance of machinery and equipment. But, both cost money. Hidden costs might include loss of production time, loss of equipment, retraining of new employees, and lower morale. What other costs might exist?
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  • Railway Labor Act

    Source: http://money.cnn.com/2012/08/16/news/companies/american-airlines-bankruptcy/index.html The Allied Pilots Association (APA), the union for American Airlines pilots, has decided to hold a strike vote . American Airlines is in the midst of bankruptcy proceedings, and the pilots are not happy. American Airlines was allowed to void its existing contract with the APA. A strike allows the union to have power by forcing the employer to cease operating. But airlines come under the Railway Labor Act (RLA), a major labor law. It was passed in 1926 to avoid any interruption of interstate commerce and to protect railway employees and union members from the actions of their employers. In 1936, the RLA was expanded to include airlines. It is very difficult for an airline union to go on strike legally. Furthermore, the strike can't happen until management and labor go through mediation overseen by the National Mediation Board (NMB). In mediation , a neutral third party acts as go-between in offering suggestions and gaining concessions that will enable a deadlock to be resolved. Under the RLA, the steps in the mediation process include: talks come to an impasse, binding arbitration has been proffered to the two sides, one party has declined the proffer, the mediation board calls for a 30-day cooling-off period, and the 30 days expires without an agreement. Thus, before the pilots can strike, the NMB would first have to release the union and the airline from further mediation and start a 30-day colling-off period. Strikes are the most powerful tactic in a union's bargaining arsenal. A strike by pilots would cause fliers to find alternative travel arrangements. How would this action help customers? Do you think the NMB will allow the pilots to strike in the midst of American's bankruptcy proceedings?
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  • Top Ten Consumer Complaints

    The Consumer Federation of America (CFA) and the North American Consumer Protection Investigators (NACPI) surveyed 38 agencies across the United States about complaints they received in 2011. Top Ten Complaints Auto: Misrepresentations in advertising or sales of new and used cars, lemons, faulty repairs, leasing and towing disputes Credit/Debt: Billing and fee disputes, mortgage modifications and mortgage-related fraud, credit repair, debt relief services, predatory lending, illegal or abusive debt collection tactics Home Improvement/Construction: Shoddy work, failure to start or complete the job Retail Sales: False advertising and other deceptive practices, defective merchandise, problems with rebates, coupons, gift cards and gift certificates, failure to deliver Utilities: Service problems or billing disputes with phone, cable, satellite, Internet, electric and gas service Services: Misrepresentations, shoddy work, failure to have required licenses, failure to perform (Tie) Internet Sales: Misrepresentations or other deceptive practice, failure to deliver online purchases; Landlord/Tenant: Unhealthy or unsafe conditions, failure to make repairs or provide promised amenities, deposit and rent disputes, illegal eviction tactics Fraud: Bogus sweepstakes and lotteries, work-at-home schemes, grant offers, fake check scams, the grandparent scam and other common frauds Real Estate: Timeshare sales and resales, retirement communities and assisted living facilities, real estate fraud (Tie) Household Goods: Misrepresentations, failure to deliver, faulty repairs in connection with furniture or appliances; Home Solicitations: Misrepresentations or failure to deliver in door-to-door, telemarketing or mail solicitations, do-not-call violations The report offers general tips for consumers about how to avoid scams and rip-offs at www.consumerfed.org/pdfs/Consumer_Complaint_Consumer_Tips2011.pdf . In general, to avoid problems, consumers should check the backgrounds of service providers and review the ratings of products. Choose one of the top ten complaints, and read the CFA suggestions on how to avoid scams and rip-offs in that area. If you were the manager in one of those businesses, what could you do to lessen complaints?
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  • Do Not Track

    Companies collect a vast amount of personal and financial data from online and offline sources about consumers. When someone visits a Web site or makes a purchase a "cookie," or digital marker, is dropped on the user's computer. That profile is matched with offline data like what type of credit card a person has, what products are purchased, and what type of car he or she drives. Then that person will receive specific ads based on where he or she lives (zip code), the Web sites visited, purchasing habits, and personal preferences. Consumers have little control over the data being collected. Watch the video at http://www.ftc.gov/multimedia/video/privacy.shtm . In its March 2012 report on Internet privacy, the Federal Trade Commission (FTC) recommended that companies provide a "Do Not Track" mechanism, which allows consumers to opt out of having their online behavior monitored and shared. The report calls on companies handling consumer data to implement recommendations for protecting privacy, including: Privacy by Design - companies should build in consumers' privacy protections at every stage in developing their products. These include reasonable security for consumer data, limited collection and retention of such data, and reasonable procedures to promote data accuracy; Simplified Choice for Businesses and Consumers - companies should give consumers the option to decide what information is shared about them, and with whom. This should include a Do-Not-Track mechanism that would provide a simple, easy way for consumers to control the tracking of their online activities. Greater Transparency - companies should disclose details about their collection and use of consumers' information, and provide consumers access to the data collected about them. Who has your information? Where is it going next? How can you find out what information companies have about you or if it's correct? Why should companies be concerned about the issue of consumer privacy?
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  • Management Conduct Contrary to Policies at Best Buy

    Richard Schulze founded Best Buy, but is stepping down as chairman after a company inquiry found that he failed to reveal the CEO's relationship with a female employee. CEO Brian Dunn resigned last month for violating Best Buy's policy . He had an inappropriate ("close personal") relationship with a female subordinate. The female employee was much younger than the CEO, according to reports. The Associated Press reported , "The company probe found that although Dunn did not misuse company resources or aircraft related to the relationship, he and the employee were in significant contact for no identifiable business purpose. For example, during one four-day and one five-day trip abroad in 2011, the CEO contacted the female employee by cell phone at least 224 times, including 33 phone calls, 149 text messages, and 42 picture or video messages." Problems affect productivity. Both Schulze and Dunn forgot that company policies, procedures, and rules are important. They are written to take care of problems which occur again and again. Companies have an incentive to implement and enforce strong policies prohibiting harassment and effective complaint procedures. Furthermore, employees have an incentive to alert management about harassment before it becomes severe and pervasive. The " Facts About Sexual Harassment " below is from the U.S. Equal Employment Opportunity Commission (EEOC). Sexual harassment is a form of sex discrimination that violates Title VII of the Civil Rights Act of 1964 . Title VII applies to employers with 15 or more employees, including state and local governments. It also applies to employment agencies and to labor organizations, as well as to the federal government. Unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature constitute sexual harassment when this conduct explicitly or implicitly affects an individual's employment, unreasonably interferes with an individual's work performance, or creates an intimidating, hostile, or offensive work environment. Sexual harassment can occur in a variety of circumstances, including but not limited to the following: The victim as well as the harasser may be a woman or a man. The victim does not have to be of the opposite sex. The harasser can be the victim's supervisor, an agent of the employer, a supervisor in another area, a co-worker, or a non-employee. The victim does not have to be the person harassed but could be anyone affected by the offensive conduct. Unlawful sexual harassment may occur without economic injury to or discharge of the victim. The harasser's conduct must be unwelcome. It is helpful for the victim to inform the harasser directly that the conduct is unwelcome and must stop. The victim should use any employer complaint mechanism or grievance system available. When investigating allegations of sexual harassment, EEOC looks at the whole record: the circumstances, such as the nature of the sexual advances, and the context in which the alleged incidents occurred. A determination on the allegations is made from the facts on a case-by-case basis. Prevention is the best tool to eliminate sexual harassment in the workplace. Employers are encouraged to take steps necessary to prevent sexual harassment from occurring. They should clearly communicate to employees that sexual harassment will not be tolerated. They can do so by providing sexual harassment training to their employees and by establishing an effective complaint or grievance process and taking immediate and appropriate action when an employee complains. It is also unlawful to retaliate against an individual for opposing employment practices that discriminate based on sex or for filing a discrimination charge, testifying, or participating in any way in an investigation, proceeding, or litigation under Title VII. Dating a co-worker has resulted in the Best Buy CEO losing his job. Not sharing the information with the board has resulted in the chairman of Best Buy's board losing his position. Do you think any others at Best Buy knew the CEO and employee had a relationship? If so, do you think there was office gossip? Could employees see this relationship as a sign of favoritism? Should the CEO fear blackmail, the possibility that she would accuse him of hierarchical harassment or blackmail?

  • Fired by email

    All employees at the asset-management unit of Aviva PLC, Britain's second-largest insurance company, were mistakenly sent an email which said , 'I would like to take this opportunity to thank you and wish you all the best for the future.' Many of the employees thought that they had just been fired by email. This story became news around the world. In reality, the employee was not fired by email, but had been laid off and the email was a follow-up message. Quickly, the manager realized what had happened and recalled the email. An apology email was sent. The costs - both human and financial - of a poorly handled termination can be extremely high. The rise in wrongful termination suits is due, at least in part, to mismanagement of the termination process. When asked, many terminated employees report that they sued their former employer because of the way they were treated, rather than for any financial gain. Regulations that apply to termination include: Age Discrimination in Employment Act Americans with Disabilities Act (ADA) Civil Rights Act Title VII, Civil Rights Act of 1991 Fair Labor Standards Act Family and Medical Leave Act Immigration Reform and Control Act National Labor Relations Act (NLRA) Occupational Safety and Health Act (OSHA) Pregnancy Discrimination Act When a terminated employee sues the organization, both parties lose. For the organization, the loss includes legal fees, time and energy of key personnel, internal morale, and external public relations. The terminated employee loses time and energy that could have been directed to the job search. Termination Action Plan Once the decision to terminate an employee has been made, the manager should develop an action plan. A pre-termination planning decision to release an employee, who no longer fits the organization's needs, enhances an organization's development objectives. Schedule the termination as soon as possible. Move as quickly as possible to a termination date. List the resource people (for example, human resources (HR) representative, lawyer, and outplacement consultant) available to provide support or assistance in the termination. A HR representative can outline the terms of the severance. Also, he or she can serve as a witness to what was actually said during the termination conference. An outplacement consultant assists the terminated employee in conducting an effective job search. As a result of this service, outplaced employees make a career transition more rapidly, with less overall stress, and have a distinct advantage over non-outplaced job seekers. The organization benefits from reduced severance packages, reduced likelihood of lawsuits, maintenance of morale and productivity of remaining employees, and increased community support for the actions of the organization. Outline the primary reasons for the termination. Explain the reasons for the termination clearly, concisely, and candidly. In addition to performance issues, reasons for the termination might include change in strategic direction, mismatch between skills and job, reorganization, new technology, or change in ownership. Develop a security strategy. If the individual has access to sensitive information, take precautions. For example, change computer passwords and secure documents. Arrange for the individual to separate out, under supervision, personal effects from organization property. Personal effects can be forwarded after a qualified person has had the opportunity to evaluate their contents. Point out that these actions are designed to protect the individual as well as the organization, so that no one can be falsely accused of removing confidential documents. Determine time and location. If the termination is held in the individual's office or in a neutral location, not your office, you can control the length of the meeting and avoid a prolonged discussion or debate. Plan internal and external announcements. Determine how the news will be communicated inside and outside the organization. A formal internal announcement concerning the departure and replacement of the employee is appropriate. Notify key external suppliers and/or customers with whom the individual had regular contact of the individual's replacement. Should employees always be terminated in face-to-face meetings? OR should email be used? Explain.

  • Managers ensure compliance for anti-bribery

    Recent bribery allegations against Wal-Mart in Mexico and Hollywood movie studios in China should remind managers that they are responsible for ensuring that clear anti-bribery policies are in place and that relevant staff at the least receive sufficient training . (See 3M's Anti Bribery Policy for an example.) The Foreign Corrupt Practices Act (FCPA) enacted in 1977 makes it illegal for Americans to bribe foreign officials. A bribe is offering anything of value (money or gifts) to gain a competitive advantage. The Securities and Exchange Commission ("SEC") and the Department of Justice ("DOJ") are jointly responsible for enforcing the FCPA. The SEC brings civil enforcement actions against issuers and their officers, directors, employees, and agents. The DOJ criminally prosecutes issuers and their officers, direc­tors, employees, agents, and domestic concerns, as well as foreign persons and entities (acting within the U.S.). According to the U.S. Department of Justice , The anti-bribery provisions of the FCPA prohibit the willful use of the mails or any means of instrumentality of interstate commerce corruptly in furtherance of any offer, payment, promise to pay, or authorization of the payment of money or anything of value to any person, while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to a foreign official to influence the foreign official in his or her official capacity, induce the foreign official to do or omit to do an act in violation of his or her lawful duty, or to secure any improper advantage in order to assist in obtaining or retaining business for or with, or directing business to, any person. In this video, Fareed Zakaria reports "How to beat bribery ." India's Chief Economic Adviser, the economist Kaushik Basu, uses a game theory simulation to suggest that "bribery in general will decrease if people who are asked for bribes can pay the money and they can still go and complain without worrying that they will be prosecuted. And the corrupt official who takes the bribe will know that if they take the money they face twice the penalty." Read the attached Investor Bulletin. What is "anything of value"? How is "foreign official" defined? What is an "indirect bribe"? What are the three situations in which payments to foreign officials would not result in liability under the FCPA? What do you think of Basu's way to fight bribery?

  • China isn't the only country with Overtime Abuse

    Apple joined the Fair Labor Association (FLA) in January 2012 and in February, FLA inspected Foxconn , an Apple supplier with factories in China. Three Chines factories, two in Shenzhen and one in Chengdu, were inspected. Two parts to FLA's investigation at the three Foxconn facilities were: (1) An assessment of the treatment of workers and of working conditions in the factories, which seeks to identify root causes of workers' rights violations. This assessment analyzes information from several sources, including document review, physical observation, management interviews, and onsite and off-site interviews with workers. (2)Onsite, anonymous surveys to hear directly from the workers about working conditions and how they are treated in the factories. In its report , FLA found excessive overtime and problems with overtime compensation. Employees were found to work more than 60 hours per week and sometimes 11 or more days in a row. Foxconn, headquartered in Taiwan, has promised to cut hours worked, not salaries paid. By July 2013, no Foxconn worker will labor for more than 49 hours a week. This is the limit dictated by Chinese law. China isn't the only country with unpaid overtime. In the United States, fair wage cases are investigated by the Labor Department , and most cases investigated are for unpaid overtime . The Fair Labor Standards Act (FLSA), passed in 1938, delineated between manager, hourly employee, administrative worker, and the outside salesperson. It established the eight-hour workday, the 40-hour workweek, and time and a half pay for the workweek over 40 hours. Exceptions to the law are exempt employees: executive, administrative, professional, and outside sales employees. (See attached for overtime pay requirements.) Managers need to know the law. Employees on the employer's premises, under the employer's control, using the employer's tools are working and should be paid for that time. One type of overtime abuse is misclassifying employees as exempt. For example, some companies designate workers as supervisors or managers, but they don't supervise other employees and don't have authority over work schedules. Another type of overtime abuse is having workers perform job duties off the clock, such as working while taking less time for eating lunch or not compensating properly for travel time to run errands before or after work. Employees can work flexible hours, telecommute, and be attached to electronic devices to perform their job duties anywhere, anytime. How can managers keep up with the number of hours that people work and when they work?

  • Social Media Policy

    Can employees be fired for posting or commenting about work-related topics on social media sites? Well, it depends. The National Labor Relations Board (NLRB) has published two reports that summarized recent cases involving social media issues (August 2011) and updates (January 24, 2012) in this area of law. (The latest report is attached.) The reports underscore two main points: Employer policies should not be so sweeping that they prohibit the kinds of activity protected by federal labor law, such as the discussion of wages or working conditions among employees. An employee's comments on social media are generally not protected if they are mere gripes not made in relation to group activity among employees. Lawyer Kelly Shoening wrote, "Social media use in the workplace is a continuously evolving area of law. The cases in the NLRB's latest report illustrate that questions surrounding employee social media posts and employer policies are extremely fact-specific. In devising a social media policy, employers should avoid using overly broad language and should clearly define key terms so that the policy is not construed as restricting lawful employee activity." Barry Judge, the Chief Marketing Officer at Best Buy, discusses (in this video) the different ways Best Buy uses social media. Find Best Buy's Social Media Policy at http://forums.bestbuy.com/t5/Welcome-News/Best-Buy-Social-Media-Policy/td-p/20492 . What would the lawyer think about this policy?

  • Countrywide - Not a Good Deal

    Bank of America's acquisition in 2008 of Countrywide Financial, the largest mortgage lender, has turned out to be one of the worst business deals in history. It has resulted in tens of billions of dollars in losses for Bank of America. In addition, Countrywide has become a symbol of the housing boom and collapse. "Countrywide's actions contributed to the housing crisis, hurt entire communities, and denied families access to the American dream," said Thomas E. Perez , Assistant Attorney General for the Civil Rights Division. The Justice Department announced the largest residential fair-lending settlement in history on December 21, 2011. Bank of America will pay $335 million in compensation for victims to settle allegations that its Countrywide Financial unit discriminated against black and Hispanic borrowers in their mortgage lending from 2004 through 2008. This was before Bank of America purchased Countrywide. The Justice Department determined that from 2004 to 2008, Countrywide did not have a system to comply with fair-lending rules. Countrywide's policy gave loan officers and brokers the discretion to alter the terms for which a particular applicant qualified. Lending data showed that Countrywide charged Hispanics and African-Americans more, on average, than white applicants with similar credit histories. Furthermore, brokers and employees "steered" applicants who qualified for regular mortgages into riskier, more expensive subprime loans. Bundling and reselling subprime loans as securities was one cause of the 2007 financial crisis. Attorney General Eric Holder said, "The department's action against Countrywide makes clear that we will not hesitate to hold financial institutions accountable, including one of the nation's largest, for lending discrimination. These institutions should make judgments based on applicants' creditworthiness, not on the color of their skin. With today's settlement, the federal government will ensure that the more than 200,000 African-American and Hispanic borrowers who were discriminated against by Countrywide will be entitled to compensation." Federal civil rights laws, including the Fair Housing Act and Equal Credit Opportunity Act , make a lending practice illegal if it has a disparate impact on minority borrowers. What is disparate impact ? What can a manager do to discourage disparate impact in lending practices?

  • Encourage Whistleblowers

    Business is all about building relationships. People choose to relate to businesses they trust and respect. Thus, managers, as well as employees, must understand the impact of violating societal values and choose an ethical course of action. Most companies have standards of business conduct. Some suggest that employees ask themselves, "Before I make a decision, have I considered how it would look in a news story?" The answer helps the employee to decide whether an action is appropriate. It seems that legendary football coach Joe Paterno and Penn State University president Graham Spanier did not use this simple test. Both men were fired in response to the sexual abuse scandal . They did not take appropriate action. Encouraging and enabling whistleblowing can protect the company and its managers and employees, while preventing damage. Employers should set up a mechanism for a prompt, thorough, and impartial investigation. The Sarbanes-Oxley law, passed in 2002, required publicly held companies for the first time to set up processes to deal with many types of whistleblowers. Congress passed the Dodd-Frank law, which encourages whistleblowers. It provides financial incentives for employees to blow the whistle on securities fraud and other wrongdoing. As a manager, you will observe and/ or deal with some sort of scandal during your career. If you view something that should not occur, will you be a whistleblower and report what you saw to your superiors and anyone else who should be informed? As a manager, how would you encourage employees to inform you of anything questionable?

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    Published 03-30-2011 9:08 AM by admin
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