Legal vs. Ethical

Business and ethics are a textbook oxymoron for many customers, both consumers and businesses.
Business practices which flirt with regulations and ethical boundaries contribute as much to the oxymoron, if not more, than those which are flagrantly illegal and unethical.
What’s legal may not be ethical. And what may be ethical isn’t always legal. That’s not a discussion reserved for graduate philosophy classes. It’s at the heart of every company’s core beliefs and practices.
Case in point. A business acquaintance who’d recently formed an LLC received this letter in a legal looking envelope which suggested it was from a government agency two weeks later.

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The name and address of the company was the first red flag. There was no government agency or address.

LABOR LAW COMPLIANCE NOTICE. Failure to comply with posting regulations can lead to fines up to $17,000. (29USC Sec 666(i) & (29 USC Sec. 2605). A dire warning for the first-time business owner. As an aside, “Sec 666” is worrisome enough.

The box below advises about the federal business requirements for posting labor law posters pursuant to and so on. There’s a RESPOND BY date, which is roughly two weeks after the letter was received.

The information about the company is listed below, obtained from State PUBLIC Information. In other words, obtained from open records. The second red flag.

There’s a document ID number. Very official looking, allowing the inference of a government agency dossier if not implying it.

The cost of the poster is filled in. With an additional $4.95 service fee if a credit/debit card is used for payment rather than a check or money order which is immediate cash. A third red flag.

All legal. The company information is a public record with free access to anyone, including this supplier. There are federal labor regulations which must be posted, even in a one-person company. There are printing costs involved, although the economies of scale for this marketer’s operation make these prices arguably comparable to usury.

If the company’s printing costs, mailing and overhead costs were 10% of the $84, it mailed 1,000 of these letters a week and had a 10% response rate, that’s almost 400,000 in revenue year. All legal. For a minimal investment.

Then there’s page two on the back.
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The state and federal — a generous two for the price of one — compliance poster includes seven (7) pieces of information which are required to be posted to avoid the $17,000 fine. ALL UPDATED WITH NEW LAWS FOR 2017.

Then a column explaining the business owner “must post a compliant Employment Poster in a conspicuous place in the workplace where all employees and applications can see it.” With “must include” information. And a bullet list of how the company’s $84 poster set will satisfy all the “must” include. Facts gleaned from public government sites anyone can access.

The right-hand column reiterates the notices required to be posted because of the 2017 federal labor law changes and provides a bullet list of them. Facts gleaned from public government sites anyone can access.

The final paragraph in the left-hand corner of the page is the “dire warnings” reminder. I’m surprised it’s not bold, underlined and bordered. After reading it, I’m ready to order the poster for my friend from this company. Facts gleaned from public government sites anyone can access.

And in the right-hand corner. Aye, there’s the rub.

Bold caps. DISCLAMER. [sic: misspelled] The buried fine print that we’re all warned about reading before we sign anything or send in the money.

“Labor Poster Services is a NON-GOVERNMENT publisher of labor law employment posters. . . . This service has not been approved or endorsed by any agency of the government. INDIVIDUAL PANELS ARE AVAILABLE TO BE REQUESTED BY ANY AGENT OF THE CORPORATION FROM THE GOVERNMENT FREE OF CHARGE. [Emphasis is mine. No clue as to where the data are available. In other words, don’t give away the farm.] This offer is intended as a solicitation and not to be intended as a bill due. [Despite the fact that a Date Notice Sent, official Document Number, tear-off form with a barcode and a SASE makes is intended, in my opinion, to make it appear like one.] Labor Poster Services makes no representations or warranties as to the information provided herein. [In other words, we’re not liable for anything you would infer from our offer or if the information about posting labor laws or the new 2017 labor laws is wrong.]

The disclaimer notwithstanding, everything in this offer is legal.

However, as a former business owner, and a marketing practitioner and strategic marketing consultant for more than 20 years, this company has gone to the dark side and embraced the gray area between what’s legal and what’s ethical, in my opinion.

And represents a classic example of the business ethics oxymoron.

There are four questions I would ask Labor Poster Services if it were a client.

  1. How much of your overhead is tied up in defending yourself from claims of fraud, and processing and making refunds? If it’s more than $1, it’s too much.
  2. Is the service and product you’re offering something which has value for the target market: businesses and business owners, especially LLCs and partnerships? The answer should always be “yes.” Unless you’re selling the Brooklyn Bridge.
  3. What’s the USP (unique selling proposition) benefit you provide to the target with your service and product which offsets the buyer’s cost and creates a positive value ratio for the target market? There should always be one. Otherwise you’re a commodity and anyone could undercut the company’s poster price.
  4. Given the answers for those two questions, why is it necessary to use a borderline unethical, but legal, marketing approach instead of an ethical and legal value offer?

The value of Labor Poster Services product to the customer for an $84 investment is

  1. to perform an important HR function for the customer;
  2. to reduce the customer’s costs in the amount of time, energy and effort it would have to spend to research the federal and state labor regulations and forms to be in compliance;
  3. to eliminate customer’s internal or out-sourced printing costs;
  4. to eliminate the target market’s risk of being in violation of federal and state labor laws — the penalties for which could be huge costs.

These positively affect the customer’s bottom line.

The USP is that Labor Poster Services is a proactive business partner watching out for the best interests of its customers. It guarantees that it spent $00,000 in research to assure that its product does include the latest information required by federal and state labor laws for 2017. And will provide updates free of charge and a replacement poster at 00% of the original $84.

P.T. Barnum said, “There’s a sucker born every minute.” There are companies which will skirt the boundaries of illegal and unethical business practices.

There’s a Latin axiom: Caveat emptor — let the buyer beware. It’s not necessary for Labor Poster Services or any organization to utilize hidden or fine print, a borderline unethical marketing approach,  and contribute to the general perception that “business ethics” is an oxymoron.


BLOG DISCLAIMER: This is a personal weblog post. If this post is of interest or is helpful, that’s terrific. But this is my personal blog. The views expressed in the post are mine alone and do not represent nor are they intended to represent the opinions WordPress. I am an experienced marketing professional, not an attorney. This weblog post is provided with no warranties and guarantees, and confers no liability for any errors or any losses, injuries, or damages arising from its display or use.

 

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