Employment Discrimination and Globalization

Employment Discrimination and Globalization

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 of product (Sharif & Mainuddin, 2001). There have already been instances when the manufacturers have conveyed to me that they are having difficulty obtaining the raw materials they need to manufacture the shoes in a timely fashion. At this early juncture, I have learned that some of the hides purchased by a plant had to be returned because the hides were inadequately cured and are tearing during the manufacturing process.

I have entered into contracts with a number of domestically located independent and chain shoe stores. There is a strong seasonal aspect to selling the type of shoe that Sexy Shoes for Her manufactures. Generally, there are two major shipments each year for spring / summer and fall / winter collections. Each store's contract contains stipulations about the number of days a shipment must arrive at the store before the seasonal merchandise displays change. Typically, the contracts read that seasonal shipments will arrive 30 days before they are needed by the store. The seasonal merchandise display changes are not uniform across stores.

I have employees who function as operations managers for the manufacturing plants, and employees who are account managers for the stores that sell the shoes made by my company. During the start-up period, I consulted with an attorney ("breach of contracts," n.d.) about doing business internationally, and I consulted with the Small Business Administration about doing business domestically. These consultations provided me with basic information about entering into a contract and about the contract authority of my employees. My attorney was emphatic that my company is vulnerable to four types of contract authority liability arising from the actions of my employees (Reed, Shedd, Morehead, & Pagnattaro, 2008). Through their actions and because of the inferred or presumed authority attributed to my employees by those with whom the company normally engages in business transactions, my company is can be liable for actual, express / written, implied, and apparent contract authority (Reed, et al., 2008). For instance, any time one of my employees is given directions or instructions either orally or in writing, that employee has been given actual authority to carry out an action (Reed, et al., 2008). Once the employee has acted according to authority that was once granted to him, that employee will have implied authority in subsequent similar situations (Reed, et al., 2008). Implied authority can be problematic for me if a former employee presents himself to those with whom the company normally transacts business as though he were still employed by the company (Reed, et al., 2008). This situation carries apparent authority and the third parties involved cannot be held at fault for acting on that apparent authority unless I have explicitly notified them that the former employee has terminated his employment with the company (Reed, et al., 2008).

The responsibility of my company toward normal business transactions is immense. Certainly, hearing my attorney's explanations about vicarious liability (Reed, et al., 2008) left me with a greater understanding of the rationale and the need for explicit employee manuals and for exacting training standards for employees.

After due consideration of the company's actual, if not legal, vulnerability to ill-chosen acts by employees, I reviewed the contractual clauses that appear to provide the most opportunity for supply and demand slippage. The contracts with the shoe stores all contain what the store managers referred to as boiler-plate language. Several of these boiler-plate clauses give me pause. I refer specifically to: Time of performance, indemnification language, savings / severability clause, non-waiver clause, attorney fee language, liquidated damages clause, merger and integration clause, statute of limitations language, choice of law and forum, and arbitration clause (Baily & Desiderio, 2007; "contract clauses," n.d.).

The shoe stores with which I contract have only to prove that my company's breach of contract has caused them material harm in for the court to find favor with them and to award them damages (Reed, et al., 2008). As long as my suppliers are able to make shipments during the time period before my customers switch over their seasonal displays of merchandise, as I understand the contract language, it will be difficult for them to prove material harm. However, once that time has elapsed, if shipments from my company have not been forthcoming, then reasonably the stores could claim material harm. The material harm issue would be exacerbated if the stores have limited their purchases of merchandise from other companies since they were assuming that my company's merchandise would complete their need for seasonal stock (Baily & Desiderio, 2007.

Upon review of the contracts, I determined that the contract language that poses an immediate threat to my company is the "time is of the essence," savings / severability, and non-waiver clauses ("contract clauses," n.d.). "Time is of the essence" (Baily & Desiderio, 2007) is the basis for the complaints from my shoe store customers, who report that they are not receiving shipments on time. From my perspective the savings / severability and non-waiver clauses are especially important because they enable me to hold the customers to the other parts of the contract ("contract clauses," n.d.) even if they claim that the contract has been breached due to my company's inability to meet their shipment deadlines.

Further, my attorney explained that if my contracts with my suppliers do not contain a "time is of the essence clause," I might still be able to turn their contracts into a "time is of the essence contracts" by 1) notifying customers that time is now of the essence (when it becomes imperative to do so) and 2) by giving them reasonable time to perform. It is, at least, a tactic; however, I am doubtful that I can get my Indian suppliers to comply with Western-style contracts, regardless of the wording (Rubenstien, 2008; Sharif & Mainuddin, 2003; Huq, n.d.).

Employee relations. Until my business records proceeds of 500,000 annually, my enterprise will not need to be compliant with the Fair Labor Standards Act of 1938 ("industries," n.d.). However, since I anticipate rapidly exceeding that earnings amount, I will begin phasing in procedures that will ensure that my operations are compliant by the time earnings cross over the critical mark.

Since my company has been organized as a Limited Liability Company, the entity known as the LLC is vicariously liable for the acts of my employees (my company's agents) when they act within the scope of their employment and authority. Respondeat superior means that the company is responsible for the tortuous actions of employees unless they are engaged in frolic or detour activities, which are not part of their duties and responsibilities (Reed, et al., 2008). My business is vulnerable to intentional torts, negligence torts, and strict liability torts.

The majority of my employees will not have customer-facing work. This is reassuring since it seems that liability could increase exponentially if this were the case. At present, my company has -- as part of its plan to limit liability and to reduce start-up costs -- determined to ship merchandise through a commercial shipper. The logistics team established a relationship with DHL and UPS. There are no immediate plans to purchase trucks or to hire truck drivers.

I remain concerned about issues of quality manufacturing with my Indian suppliers. Shoes, unlike handbags, say, can potentially be a source of personal hazard. A number of lawsuits are filed each year in which the plaintiff claims that the shoes they purchased were poorly designed or manufactured, and as a result, they have sustained an injury. It will be absolutely critical that my off-shore operations managers ensure that the highest standards regarding quality manufacturing are upheld. In addition, I am considering putting a warning on the inside of the lid of my shoe boxes to remind the purchasers that they need to take certain precautions when wearing shoes with high heels, platforms, open toes, and straps.

Environmental issues. California has some of the most stringent environmental protection laws in the U.S. My company will focus on meeting California's regulations that apply to the manufacture, distribution, and sales of leather shoes. Not only is this essential for the company to have business relationships with shoe stores in California, but it is the sort of business practice that buys good will and gives customers confidence in a product. While Sexy Shoes for Her is not likely to have a strong association in the minds of our customers with green business, neither do I want the company to acquire a reputation that we discount such concerns.