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Restaurant lays off all employees via text message

Text message may be an effective method for telling someone you’re running late, but is it a fair tool to use when firing an entire staff? Let’s look at both sides of this story.

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Using text message to communicate with staff

It is increasingly common for people to text their boss that they’re running late, they’re sick, they need something, or they have a question, but you don’t hear all to often of mass layoffs done over text messaging, which is exactly what WFTV.com reports has taken place at Barducci’s Italian Bistro in Winter Park, Florida.

With what employees say was no notice, restaurant owner Gregory Kennedy texted all employees, “I unfortunately need to inform you that I have been forced to close Barducci’s effective immediately.” Staff members say they are all still owed final paychecks.

WFTV says they repeatedly attempted to call the owner who did not respond until they attempted to text him. His text response to the station was, “Unfortunately businesses are forced to close across Orlando every day especially in the restaurant sector. I am working to resolve issues including final paychecks as quickly as possible.”

Customers and employees are upset

While some customers are likely upset that their favorite local spot has closed it’s doors, others had actually purchased coupons through Groupon and have asserted through social networks that they don’t know what to do now that they’re out the money.

According to WFTV, Groupon has responded by offering a full refund to any person who had purchased a coupon in advance, which is typically what the company’s standard response is when companies go out of business.

One employee called the move immoral, saying it is cowardice. “I think we all deserve our compensation for money he’s already made from us,” she said.

Playing devil’s advocate

While it is easy to roll your eyes and feel anger at the restaurant owner, thinking you would never do that if you were a business owner, take pause for a moment. Imagine you’ve poured your life into this one restaurant and it is your everything – you wake up to it and go to sleep with it on your mind every night. You’ve sought ways to make each dish even better and reach new customers, living out your dream. But like many other businesses, sometimes that dream ends and it can be somewhat abrupt. That has to be painful. Wouldn’t you want to pull your limbs into your turtle shell and hide forever?

Most criticize the business owner for his chosen method of communication, and while there were clearly better alternatives, it appears to be missed that someone is clearly emotional about the loss of their business, their source of income, their dream. Perhaps he came to open his restaurant that morning and the bank had seized the property and there were locks on the door – text messaging could be the most effective way to quickly tell everyone there is no restaurant to go to, so don’t bother getting ready. It could have been in that emotional moment he texted his team.

While text messaging is insensitive, it is unclear whether or not this was the standard communication method for the entire team – if this is how they’ve all communicated for the past few years, why would anyone change the path now?

Analysis of this learning moment for all

This is, however, a learning moment for all. This business owner likely knew the house of cards was falling and could have offered warnings to team members, perhaps having a team meeting expressing that there are struggles and the owner could assert he is doing everything he can to keep the business afloat. When the doors were to close, it would have been less of a surprise, even if done by text.

Alternatively, if text is the only way the owner could muster to communicate, it could have been a series of texts that read more along the lines of, “You guys have done such amazing work and because of your dedication, we lasted longer than we ever would have. That’s why it pains me to inform you that effective immediately, Barducci’s is closed and we are all out of a job. I am working to resolve your final paycheck and will update you tomorrow regarding the status. I apologize that I wasn’t able to do more and this is with a heavy heart I am messaging you all. I also apologize for using text, but losing my business and my dream is crushing and I know you share in that feeling with me. Please let me know if you’d like me to write a letter of recommendation for you or call your next employer, because you are all like family.”

Setting expectations, emoting, relating, and apologizing are critical in this type of situation, even if text message is the chosen form of communication. Most other forms of communication are superior, and in this case, having a friend call all employees so a voice could explain and set expectations would have been better.

It is unfair to crucify this business owner, even though all in the situation are hurting. From every angle, a business closing is a bad scenario and one no one wants and many people fail to deal with perfectly as emotions rule their reactions.

Marti Trewe reports on business and technology news, chasing his passion for helping entrepreneurs and small businesses to stay well informed in the fast paced 140-character world. Marti rarely sleeps and thrives on reader news tips, especially about startups and big moves in leadership.

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4 Comments

4 Comments

  1. bobledrew

    July 15, 2013 at 2:19 pm

    Great post, Marti. When I shared this on my company FB page, I said that a key to writing great stuff is going beyond the easy answers, and your post does that really well. Yes, this should not be anyone’s idea of a best practice. But there’s more to this than just shouting “FAIL!”

  2. LukeandMyriah Walker

    August 16, 2013 at 11:47 am

    Great post! I appreciate it when someone in the media can see both sides and report fairly. All around good reporting. -Luke “Sky” Walker – Keller Williams Elite

  3. Ro Reed

    August 17, 2013 at 8:26 am

    Talk about “fair and balanced”… nicely done, Martin. I couldn’t help but think your proposed text should be shared on Facebook (like all those recipes we’re asked to “Post to Timelines so they aren’t lost”) as it might serve one well at some point in the future.

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Business News

Big retailers are opting for refunds instead of returns

(BUSINESS NEWS) Due to increased shipping costs, big companies like Amazon and Walmart are opting to give out a refund rather than accepting small items returned.

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Package delivery people holding deliveries. Refund instead of returns are common now.

The holidays are over, and now some people are ready to return an item that didn’t quite work out or wasn’t on their Christmas list. Whatever the reason, some retailers are giving customers a refund and letting them keep the product, too.

When Vancouver, Washington resident, Lorie Anderson, tried returning makeup from Target and batteries from Walmart she had purchased online, the retailers told her she could keep or donate the products. “They were inexpensive, and it wouldn’t make much financial sense to return them by mail,” said Ms. Anderson, 38. “It’s a hassle to pack up the box and drop it at the post office or UPS. This was one less thing I had to worry about.”

Amazon.com Inc., Walmart Inc., and other companies are changing the way they handle returns this year, according to a report by The Wall Street Journal (WSJ). The companies are using artificial intelligence (AI) to weigh the costs of processing physical returns versus just issuing a refund and having customers keep the item.

For instance, if it costs more to ship an inexpensive or larger item than it is to refund the purchase price, companies are giving customers a refund and telling them to keep the products also. Due to an increase in online shopping, it makes sense for companies to change how they manage returns.

Locus Robotics chief executive Rick Faulk told the Journal that the biggest expense when it comes to processing returns is shipping costs. “Returning to a store is significantly cheaper because the retailer can save the freight, which can run 15% to 20% of the cost,” Faulk said.

But, returning products to physical stores isn’t something a lot of people are wanting to do. According to the return processing firm Narvar, online returns increased by 70% in 2020. With people still hunkered down because of the pandemic, changing how to handle returns is a good thing for companies to consider to reduce shipping expenses.

While it might be nice to keep the makeup or batteries for free, don’t expect to return that new PS5 and get to keep it for free, too. According to WSJ, a Walmart spokesperson said the company lets someone keep a refunded item only if the company doesn’t plan on reselling it. And, besides taking the economic costs into consideration, the companies look at the customer’s purchase history as well.

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Google workers have formed company’s first labor union

(BUSINESS NEWS) A number of Google employees have agreed to commit 1% of their salary to labor union dues to support employee activism and fight workplace discrimination.

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Google complex with human sized chessboard, where a labor union has been formed.

On Monday morning, Google workers announced that they have formed a union with the support of the Communications Workers of America (CWA), the largest communications and media labor union in the U.S.

The new union, Alphabet Workers Union (AWU) was organized in secret for about a year and formed to support employee activism, and fight discrimination and unfairness in the workplace.

“From fighting the ‘real names’ policy, to opposing Project Maven, to protesting the egregious, multi-million dollar payouts that have been given to executives who’ve committed sexual harassment, we’ve seen first-hand that Alphabet responds when we act collectively. Our new union provides a sustainable structure to ensure that our shared values as Alphabet employees are respected even after the headlines fade,” stated Program Manager Nicki Anselmo in a press release.

AWU is the first union in the company’s history, and it is open to all employees and contractors at any Alphabet company in the United States and Canada. The cost of membership is 1% of an employee’s total compensation, and the money collected will be used to fund the union organization.

In a response to the announcement, Google’s Director of People Operations, Kara Silverstein, said, “We’ve always worked hard to create a supportive and rewarding workplace for our workforce. Of course, our employees have protected labor rights that we support. But as we’ve always done, we’ll continue engaging directly with all our employees.”

Unlike other labor unions, the AWU is considered a “Minority Union”. This means it doesn’t need formal recognition from the National Labor Relations Board. However, it also means Alphabet can’t be forced to meet the union’s demands until a majority of employees support it.

So far, the number of members in the union represents a very small portion of Google’s workforce, but it’s growing every day. When the news of the union was first announced on Monday, roughly 230 employees made up the union. Less than 24 hours later, there were 400 employees in the union, and now that number jumped to over 500 employees.

Unions among Silicon Valley’s tech giants are rare, but labor activism is slowly picking up speed, especially with more workers speaking out and organizing.

“The Alphabet Workers Union will be the structure that ensures Google workers can actively push for real changes at the company, from the kinds of contracts Google accepts to employee classification to wage and compensation issues. All issues relevant to Google as a workplace will be the purview of the union and its members,” stated the AWU in a press release.

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Business News

Ticketmaster caught red-handed hacking, hit with major fines

(BUSINESS NEWS) Ticketmaster has agreed to pay $10 million to resolve criminal charges after hacking into a competitor’s network specifically to sabotage.

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Person open on hacking computer screen, typing on keyboard.

Live Nation’s Ticketmaster agreed to pay $10 million to resolve criminal charges after admitting to hacking into a competitor’s network and scheming to “choke off” the ticket seller company and “cut [victim company] off at the knees”.

Ticketmaster admitted hiring former employee, Stephen Mead, from startup rival CrowdSurge (which merged with Songkick) in 2013. In 2012, Mead signed a separation agreement to keep his previous company’s information confidential. When he joined Live Nation, Mead provided that confidential information to the former head of the Artist Services division, Zeeshan Zaidi, and other Ticketmaster employees. The hacking information shared with the company included usernames, passwords, data analytics, and other insider secrets.

“When employees walk out of one company and into another, it’s illegal for them to take proprietary information with them. Ticketmaster used stolen information to gain an advantage over its competition, and then promoted the employees who broke the law. This investigation is a perfect example of why these laws exist – to protect consumers from being cheated in what should be a fair market place,” said FBI Assistant Director-in-Charge Sweeney.

In January 2014, Mead gave a Ticketmaster executive multiple sets of login information to Toolboxes, the competitor’s password-protected app that provides real-time data about tickets sold through the company. Later, at an Artists Services Summit, Mead logged into a Toolbox and demonstrated the product to Live Nation and Ticketmaster employees. Information collected from the Toolboxes were used to “benchmark” Ticketmaster’s offerings against the competitor.

“Ticketmaster employees repeatedly – and illegally – accessed a competitor’s computers without authorization using stolen passwords to unlawfully collect business intelligence,” said Acting U.S. Attorney DuCharme in a statement. “Further, Ticketmaster’s employees brazenly held a division-wide ‘summit’ at which the stolen passwords were used to access the victim company’s computers, as if that were an appropriate business tactic.”

The hacking violations were first reported in 2017 when CrowdSurge sued Live Nation for antitrust violations. A spokesperson told The Verge, “Ticketmaster terminated both Zaidi and Mead in 2017, after their conduct came to light. Their actions violated our corporate policies and were inconsistent with our values. We are pleased that this matter is now resolved.”

To resolve the case, Ticketmaster will pay a $10 million criminal penalty, create a compliance and ethics program, and report to the United States Attorney’s Office annually during a three-year term. If the agreement is breached, Ticketmaster will be charged with: “One count of conspiracy to commit computer intrusions, one count of computer intrusion for commercial advantage, one count of computer intrusion in furtherance of fraud, one count of wire fraud conspiracy and one count of wire fraud.”

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