Entity type and location. This business start-up, registered as Sexy Shoes for Her, Inc., is a single-member Limited Liability Company taxed as a corporation (IRS, 2011). All stock is held by the principle and by members of the principle's immediate and extended family, such that, even though the firm is not a corporation, its membership resembles that of a closely-held corporation. The organization process has been completed, and all applicable filing and licensing fees have been paid. The paperwork has been purchased and printed, including corporate seals and stock certificates (Reed, et al., 2008). Initial meetings of members have been held, and the Articles of Organization have been finalized. (IRS, 2011) Attorney fees for the organization process, legal filings, and advice about the start-up activities have accrued and been paid. The headquarters are in Manhattan, so the company is registered as a domestic LLC with the State of New York (LLC, 2010). Distribution centers are located in Georgia State and Las Vegas, Nevada, and a domestic call center is located in Las Vegas. In Georgia and Nevada, the company is registered and licensed to do business as a foreign LLC (LLC, 2010). In Nevada, the business is organized as a Series LLC which allows me to separate the distribution center from the domestic call center (LLC, 2010). License fees and franchise taxes have been paid in order to establish the distribution centers in these states. As required in New York, a notice of formation of the LLC has been published in two newspapers for six consecutive weeks each, and Certificates of Publication have been forwarded to the New York Secretary of State (LLC, 2011).
The products -- leather shoes for women -- are manufactured in India. The single line of business is the manufacture, distribution, and sale of women's shoes. The manufacturing sector is "leather and allied products ("industries at a glance," 2011). India is able to export to most developed countries under an exemption of the Generalized System of Preference (GSP).
Employee recruitment and hiring. The manufacture of leather shoes presents certain limitations on workers that are governed by state and federal laws. Physically, workers employed for manufacturing jobs in Sexy Shoes for Her must be able to lift 60 pounds, feely bend, squat, kneel, crawl, and ambulate on irregular surfaces. In addition, manufacturing workers must not have any environmental allergies as they will be exposed to dyes and residual fumes from chemicals used to prepare leather for manufacture. Candidates for manufacturing jobs must be able to pass dexterity tests and aptitude tests that gauge their ability to safely work with and around machinery. Workers hired for distribution and transportation of the manufactured goods must also be able to tolerate changes in temperature, as some work may take place in unheated warehouses or out-of-doors where trucks and forklifts are used. These physical restrictions may limit employee selection to younger workers without any physical limitations, physical or mental disabilities, environmental allergies, or other work restrictions.
In the United States, discrimination against employees or job applicants 40 years and older is prohibited by Chapter 14 of Title 29 through the Age Discrimination in Employment Act (ADEA) of 1967 (Hogan & Quigley, 1986). The ADEA was amended in 1986. In 1991, it was amended by the Older Workers Benefit Protection Act and by the Civil Rights Act of 1991 (Hogan & Quigley, 1986). The ADEA applies to all employers with more than 20 employees. The number of employees in Sexy Shoes for Her exceeds twenty across all three states, so the company must comply with ADEA regulations. It is not illegal to include on job descriptions the conditions of employment that require certain levels of physical ability to be met (Hogan & Quigley, 1986). Although these levels of physical ability may be more common in younger people, job applicants aged 40 and over would still need to be considered for the positions that require certain levels of physical ability. Should a job applicant be hired and it is later discovered that they are unable to perform the job duties because of physical limitations they did not disclose, they can be terminated or voluntarily leave their position (Hogan & Quigley, 1986). However, the better route is to avoid this situation because it is difficult to prove and costly to defend.
Mitigation of damages. Generally, my preferred business strategy is to make early attempts to ameliorate emerging problems at the lowest level. As my customers are threatening to sue, I must assume that there are circumstances behind that threat. The adage that "where there is smoke, there is fire" has merit. Regardless of what information I may currently have, there are many challenges to maintaining an international supply chain and distribution channels, any one of which can go awry at any time. Since I am a small company, I might choose to talk directly with the customers who have indicated that they are unhappy. There are a number of reasons for doing this.
At this critical juncture, before litigation has actually ensued, I am interested in ensuring that the information upon which I make my decisions is accurate. Since I don't have historical experience with my employees, my confidence level in their ability to communicate effectively and in a manner that does not put the company at jeopardy is low. Compensation rates in my company are of necessity low, and company loyalty has not yet been established. Based on my reservations, I will contact my irate customers directly for what may turn out to be a series of conversations. This is a small use of resources (my time and phone costs) that could have a strong benefit.
Another reason I am motivated to speak directly with my unhappy customers is that having communications go through a number of middle people can seem disrespectful to people, minimally, and can signal that I do not sufficiently value their business. In my experience, receiving a call (or e-mail, but especially a phone call) lets the customer know that I am intimately involved in my business and that I am very concerned about customer satisfaction. Occasionally, a personal phone call in which the parties agree to a plan of action is all it takes to smooth out the problems and get the business back on an even track. It also gives the customer a feel for how our transactions may occur should they experience difficulties in the future. Personal contact goes a long way toward building trust and patience.
Another strategy that I could employ, should my customers soften their stance, would be a good faith effort to collaborate on some promotional marketing that is likely to drive more traffic into their store. Specifically, given the type of shoes that my company makes, it would be good to tap into the social networks and social media arena to promote the shoes. For instance, Q2 codes could be printed on the shoe boxes so that, once a purchase is made, a customer could send a message to her friends about her purchase. Also, for the stores that aren't yet using geo-location, my company could provide advice about how to set up a program that would help to drive foot traffic (pun intended) into their stores. My company could provide the incentive for acquiring geo-location award points by offering a discount on our shoes to customers who prove loyal to the shoe stores. I believe that, rather than making our company seem to be reflexively responding to their anger, I can honestly demonstrate that working with my company will bring bottom-line benefits. Of course, I must simultaneously resolve any issues about late or missing shipments.
Should I be unable to effectively avoid a lawsuit, once I reasonably believe it will occur or once I am aware of the inevitability of a lawsuit, there are certain precautions I must put in place. I must issue a company-wide directive that all written communications and documents from transactions must be diligently preserved by employees. I am confident that the employee manual stipulates the importance of a documentation and retention plan. Regardless, because I can't presume the company is not at fault, managers must be explicitly reminded that they are to retain any communication or document believed to be even remotely related to the lawsuit. Further, I would establish a temporary and excessively prudent policy that no documents or communications are to be destroyed until the case has been closed for some time.
Threat of litigation. The company will enter into a number of different contracts in order to transact the business of manufacturing and selling women's shoes. Since Sexy Shoes for Her does not own the factories that manufacture the shoes, individual contracts have been established with several shoe manufacturing companies in India. There is not much likelihood of imposing Western standards on Indian manufacturing firms, although some reasonable efforts have been made, particularly with regard to establishing clear contract terms that address issues of production timeliness and quality…