Is There a Right Way for a Business to Handle a Boycott? [e265]

April 20, 2016

The guys discuss the boycott of Amazon over the products of an unnamed presidential candidate. They also talkabout how a business should handle a boycott and whether it’s possible to exit one unscathed.

Full Podcast Transcript

NASIR: Welcome to our podcast where we cover business in the news and add our legal twist.
My name is Nasir Pasha.

MATT: Did you say Nasir Pocket? Sounded like it.

NASIR: Yes, my name is Nasir Pocket.

MATT: I’m Matt Staub – couldn’t think of something creative to say.

NASIR: Very good.

MATT: Sometimes, you forget you forget your name.

NASIR: It happens. It can’t see you, Matt. My internet connection’s down.

MATT: That’s fine. I think that’s why. You might have said your name correctly. I just, without the visual, I can’t…

NASIR: You didn’t know it was me, right?

MATT: Yeah. I do know a Nasir Pocket as well so it could have been them. I’m going to check. I didn’t see who was on the other line of this call.
So, here’s the goal for today. We’re going to not try to say – other than right now when I bring it up – we’re going to try to not bring up Donald Trump at all even though we’re going to talk kind of about what’s going on with these boycotts and everything else. Is that a deal?

NASIR: I kind of have to bite my tongue but, yeah, I’ll try. I’ll try my best. We’ve had more Trump articles in the last month than I think most people can stand but it’s topical. What can we do?

MATT: Yeah, I think we can do it even though one of the stories we might talk about is kind of related to that.
Amazon – I think people are familiar with who Amazon is. You can buy products on there. We’ve talked about it a few times. I think people know.
They’re getting a pushback from what’s the group? Ultraviolet is the group. I’m not even familiar with it – an online community that promotes equality and fights sexism. They’re kind of boycotting or protesting against Amazon for selling a certain candidate’s…

NASIR: You created the rules!

MATT: Well, it’s going to be difficult.

NASIR: “A certain Republican candidate’s menswear collection.”

MATT: Yeah, exactly.

NASIR: The only candidate that has a menswear collection.

MATT: Well, I don’t know that. There could be other ones.

NASIR: Cruz does have some style.

MATT: They’re wanting essentially for Amazon to remove these products from its marketplace and that’s kind of the gist of this. Amazon has policies in place. You know, it won’t sell offensive products. If you go to what these are, listed as some examples, I mean, really, it’s offensive things. We’re talking, you know, promoting hatred; violence; racial, sexual, or religious intolerance; crime scene photos; other more graphic things – which would make sense. I don’t think Amazon wants to be selling that.

NASIR: Yeah. For example, I think Amazon prohibit confederate flags was in the news – whether that’s allowed – and I think they prohibited that, correct?

MATT: Yeah, I’m not sure but that would make sense kind of based on, I think, that would fall under this first category they have. But what about a product that is sold under somebody’s name or a business’ name and it’s the person that might have these beliefs particularly of sexist nature – or alleged sexist nature.

NASIR: Or racial or religious intolerance.

MATT: Yeah, exactly. What if it’s that person that has those beliefs? Like, in this example, I don’t think the shirts themselves are promoting sexism or racism. It’s the person behind the shirts I guess that is the one that’s doing it. It’s an interesting idea.

NASIR: Well, I do have a Trump tie. Oh, I said his name. Whoops! Sorry. I was wearing it out and someone did call me a racist but I’m trying to figure out if it was the tie or not or it was just my racial comments or something.

MATT: Yeah, you know, a quick side note, I also have a tie and I used to have a shirt – I got rid of it – and I actually like the actual product a lot. It’s pretty good quality, in my opinion. I liked the shirt a lot but I don’t have it anymore. Anyways, I haven’t been criticized for it. If anything, I’ve probably been complimented, but that was many years ago.
You know, we’ll start with this. What’s Amazon supposed to do in this situation? Like I said, it doesn’t necessarily fall under their hard and fast rules for things that should be prohibited because it’s offensive but, if you go an extra layer, the person behind that product is offensive. It’s an interesting situation for Amazon but this is kind of just boycotts in general. This often happens.

NASIR: Amazon is in a pretty good position in this case because they’re so huge and they sell so many things that they have the ability to not take a stand on it. It’s like, “Look, if you don’t want to buy it, then don’t buy it. But we’re not going to delist it or anything. It doesn’t violate our terms of service which is outlined here.” It becomes more problematic when a company has so-called company values – whether it’s The Honest Company with…

MATT: Jessica Alba.

NASIR: Yeah, if Jessica Alba’s company with Honest Company, you have a set of ideals that, now, if you have a product that doesn’t fit that idea, you’re going to have to kind of succumb to that boycott pressure which, frankly, these kinds of boycotts, I do think they work if people are actually following through with it. Amazon probably is not really going to be affected in this case because they get a percentage of whatever is being sold but the primary loser – if there is one, if there’s substantial boycott – is the unnamed candidate that has that menswear product.

MATT: Yeah, and, really, to be frank with that, I don’t think they’re going to lose too much business. I mean, it’s not going to be selling on Amazon but I don’t think it’s a drop in the bucket for that establishment as well even though I didn’t even realize they got booted from Macy’s at some point which is probably where I bought the shirt and/or tie at the time. I’m guessing that’s probably happened.

NASIR: And there’s been other boycotts against him, too. I think it was Univision because of his comments about Mexicans that, if I recall, Univision kind of boycotted them or cancelled Miss America pageant or something, whatever. It had some kind of reaction. And so, obviously, this is a viable way of protesting and so forth. But, as a small business or even a medium-sized business, having any kind of bad publicity like that can be troublesome.
We’ve dealt with a lot of bad Yelp reviews, right? If some loud customer – and we’ve seen it even on TV on reality shows when you get a company that is kind of publicized for doing something bad and then everyone kind of huddles around this kind of boycott – what do you do? There may be, I should say, some kind of protection or defense to that, don’t you think? On a legal basis?

MATT: Yeah, I mean, there’s a wide or a broad stance on I guess freedom of speech, but it can go too far. You can’t just go out and say whatever you want about a business or hold up a sign that says something pretty bad. I’ve thought about that, too. I think that’s happened in some of these presidential candidate speeches or things have definitely happened and I guess those people just get carried, get removed, and who knows what happens after that? I never follow up with any of that.
But, from a small business perspective, the risk is so much greater. With this particular issue of Amazon, like we said, not a big deal for Amazon, not a big deal for the company or whatever it is selling the product either. But, for a small business, let’s say, to bring this back, we talked about this over a year ago now, I think – I can’t remember – but that pizza place in Indiana, they came out and said something. Well, I’m not going to misquote it because I can’t remember exactly because that was part of the whole issue to begin with but something about…

NASIR: Yeah, what they actually said.

MATT: The news that was put in the media was they would not be serving anyone – any homosexual couples, things like that. I don’t think that was actually want ended up being said. But, anyways, that can be crippling for a small business – regardless of whether you said it or how it was interpreted or not – because, in that example, you see a bunch of people boycotting the place – not just in person but that one, I mean, if you remember, their Yelp page just got decimated with reviews of clearly people that had never been there and not only violating the terms of service of Yelp because they weren’t customers and posting awful things but also being held liable for defamatory comments. You know, is that small business going to have the legal power and the money to go after these individuals? I doubt it and it probably wouldn’t be worth their time anyways but, you know, if this does arise for small or smaller businesses, then it’s a much bigger issue and you’re going to have to figure out how to handle that.

NASIR: Yeah, and defamation is one way because, like you said, the people that are going to be participating in any kind of boycott are going to be emotionally charged. I mean, it goes with the territory. And so, with that emotional charge, there’s going to be those – like Matt said – that cross that line into a defamatory statement to saying something that’s not true and that is damaging to your business because – whether it’s an exaggeration of the truth or just a complete lie – either way, it could be defamatory. But then, there’s also this concept – that makes it a little bit more interesting – of a tortious interference. We’ve talked about this in the past of when this can come into play but, as a consumer of any product or service, you know, you are free to not purchase something. But, as soon as you start organizing a boycott, for example, you do actually have some possible liability and it depends upon if you meet the elements or not but, as a business owner, if you’re getting boycotted against for something that’s really unfair or whether it’s true or not true, there may be some recourse in this area of tortious interference of contract.

MATT: Yeah, and I think the tortious interference of contract, the part that’s going to be tough with that in my opinion is just the actual contract that exists between the business and some sort of third party.

NASIR: Yeah, it depends upon, like, if you’re just general consumers, most consumers don’t have a contract to buy anything from you. But, if the boycott starts affecting vendors and relationships and things like that, then it becomes a little bit more arguable.

MATT: Yeah, and there’s also tortious interference with prospective economic relations.

NASIR: Yeah, that’s true.

MATT: This is in California. I’m sure there’s similar things in other states. That might fall more in line as well. But it’s kind of going back to the same thing with the defamatory comments, especially for these small businesses. Are they going to focus on their PR and try to get their name back in the positive light or are they going to start suing these individuals for tortious interference? They’re probably going to focus on the PR in that case.

NASIR: In fact, a wise attorney told me there’s a story where, basically, he gave an example of a defamation claim where you have one person that’s saying one bad thing to you and if you just let it go and don’t say anything, most likely, that’s all it’s going to be. But, as soon as you file a lawsuit, get it in the public record, then you’re giving that person an audience. And so, in the same way, going after that boycott organizer may not have the desired effect other than, you know, a lot of clients, I think, mistakenly think, “Okay, this is my opportunity to set the record straight that this is not true” or “I need to get something,” but in court may not necessarily be the best way to do that. Maybe something on PR end that you need to work on.

MATT: Yeah, definitely. I mean, once you have the negative light there upon you, the focus should always – well, not always – most of the time should shift to the PR side of things because, yeah, like you said, what are you going to do? Sue somebody and you’ll probably just be ridiculed even further. I don’t think people are going to come around on you because people, everybody loves lawsuits. Everybody loves people suing people. It’s definitely not going to help you out.

NASIR: We should add that the tortious interference of a contract, I don’t know about you, Matt, but whenever I see that claim in a lawsuit, it’s almost a throwaway. It’s like you’re grasping at straws, usually. If you have that claim and that’s what your legal claim is based on, it’s a very difficult thing to win a judgment on and, I think, for most lawyers, it’s seen as something scary because you have no idea what that means and it could be anything and some attorneys look at it that way. I look at it the opposite. It’s like, if that’s your legal theory, then you’re grasping at straws.

MATT: Yeah, I think, most of the time, that would be a good assessment of it.

NASIR: Obviously, it’s fact-dependent.

MATT: Of course.

NASIR: Sometimes, you have the good facts.

MATT: Yeah, of course.
You know, an interesting component of this is for these small businesses. Let’s say you’re the owner and you say something you shouldn’t have and people start boycotting. Your employees’ response, I think that’s an interesting component to me because what if you say something and – you know, we’ll use that pizza place example – let’s say one of your employees has no problem – or I guess not even no problem – is offended by the fact that you said that you wouldn’t serve a homosexual couple. You know, I think this is an even greater issue with the employee who disagrees with you than the actual customer because, from an employee’s perspective, they just might get up and quit because they’re going to have to see you every single day or at least all the hours they work, presumably. You know, let’s say you’re the business owner, you’re probably not going to be able to go after them for leaving, assuming there’s some sort of at will contract. I’m kind of just rambling on here. Maybe you can put my thoughts in a more cohesive way?

NASIR: No, absolutely, we’ve always talked about employees being your number one vulnerability in any business from a legal risk management perspective. The same goes along with, if you have an unhappy employee, who do you think is going to be the first person to go on the news about some of your tactics or I should say your culture? We saw that with the episode that we covered last week in HubSpot. It was a former employee that was basically pulling back the curtains on the operations of HubSpot. And so, same thing with any kind of other. If you had an employee from the pizza place saying, “Yeah, my former employer is a bigot and a racist,” that’s not going to help your cause.

MATT: Yeah, the people that watch news or read the stuff is definitely going to put more credibility in these employees because they presumably would know the owners better. Yeah, I think that’s a component that a business might not necessarily think about or going to be so concerned about – the people outside or customers or losing customers or people outside protesting. You have to look internally as well. It’s just an interesting thought to it all – another piece to the puzzle, I guess.
At the end of the day here, do we have advice other than “don’t say anything offensive so you don’t get boycotted”? Do we have advice to small businesses on what to do? Let’s just give an example of even just a small boycott.
Let’s say you have some sort of return policy that’s a little bit tricky or a little bit worded differently and you don’t do a return and it somehow gets posted on a review page and people start liking that comment. I mean, that’s like the lowest level of protest or boycott you can have.

NASIR: I think that’s a great example, by the way, because it really focuses on something that you can do to prevent. Because, really, if you have a boycott against your small business, you’ve already kind of reached a point where there’s not much you can do because reality is any recourse, any PR, I’ve met with clients in different ways where you meet with a PR firm, it’s like, “Hey, this is the issue that’s going on. We’re concerned about blowback and so forth.” 90 percent of the time, it’s like, “Well, the only thing you can do is not deal with it directly.” You have to do other positive things that kind of offset it and maybe you’re forced to address it directly if you’re asked directly.
For example, HubSpot had a response to all the negative publicity they were getting, but it was so overwhelming that they had to. It took them a couple of weeks to do it – a couple of weeks after this book released. I think, in that case, it was different. But, if you have a boycott and you’re forced into a press conference or something like that, you have to respond. Otherwise, the answer is, “What can you do to prevent it?” In your example of return policy, there’s so much you can do – and we’ve talked about this so many times – about creating the culture, the company culture internally and externally – how you deal with customers, customer service, quality control, and all that stuff that you get an MBA for and study for that should be done prior. It also includes from a legal risk management perspective, making sure that you’re protected and you’re actually cognizant of some of the legal risks that you’re entering into.
Really, the advice is, if you have a boycott against you, then just give up and close your business. That’s what Trump should do.

MATT: Well, I think the phrase is inherently sexist because it’s “boy”-cott and not “girl”-cott.

NASIR: I agree. Or it should be “person”-cott. By the way, if we’re talking about boycotts, we have to talk about what’s going on with these other states. What other states?

MATT: North Carolina?

NASIR: Yeah, there’s North Carolina but there’s also Mississippi and also Tennessee passed these laws that basically say counteract any kind of so-called special treatment or basically creating a protected class based upon sexual orientation or even gender protecting kind of transgender and transsexual rights and we’ve seen it. We did an article, by the way. You can check it out. We posted it a week or so ago. This has created a clear boycott from many perspectives – whether it’s businesses that are boycotting the state or musicians or what-have-you and see how they’re reacting and they’re going through the same kind of trials and tribulations.

MATT: For these boycotts in particular, they’ve done probably the one thing – from the boycott, the boycotteur perspective or the people that are boycotting.

NASIR: Boycotteur – you know, the person cotteur.

MATT: Once you get a celebrity involved, you’re golden because, however many X increases the publicity of it.

NASIR: No doubt.

MATT: This example in particular is a little bit interesting because I think I saw that some of these celebrities that have kind of jumped onboard here have also been found to say the opposite in prior years.

NASIR: In the past.

MATT: It’s kind of a whole hypocritical thing going on here but it’s an interesting thing that’s going on. To me, it’s not getting as much publicity. It’s getting far less publicity than other things that aren’t nearly as important.

NASIR: Yeah, absolutely. I don’t know if I saw this correctly but I think the North Carolina governor is starting to have second thoughts on the whole thing. We’ll see what happens there but it shows you, I mean, once you get to that point, you’re in a tough position, especially if the boycotts start picking up stream and you’ve seen it, especially with any kind of national brands. If these things start snowballing a little bit, they’ll adjust pretty quickly and they’ll change their act.

MATT: Yeah, you’re right. The governor of North Carolina has backed away from some components of the law here but he stopped short of completely opposing limits on bathroom access. This is as of a couple of days ago but it’s only – as recording today – there’s already been a movie that was set to film in Mississippi, Sharon Stone, she cancelled plans to film a movie there and then Ringo Starr who is really not relevant at this point, he announced that he was cancelling a show in North Carolina. If this stuff continues and the backlash is great…

NASIR: I should also announce that I’m going to cancel all my concerts that I have in Mississippi as well.

MATT: Yeah, have you been to Mississippi before?

NASIR: I haven’t, and now I may not. I’ll go there maybe for non-performance of my concerts but I’m not performing any concerts there.

MATT: Okay. Well, I mean, I don’t know what sort of concerts you perform. I guess the people are going to be missing out.

NASIR: Yes, they will.

MATT: Mississippieans.
Well, I think that’s it. We did a pretty job on our ban. I did 100 percent compliance.

NASIR: Yeah, I had some slip-ups. I’ll put a dollar in the jar.

MATT: That’s all right. We’ll try to keep it going until the unnamed individual is either out of the running or the race is over completely. We’ll see if we can keep that up.

NASIR: Very good.
All right, man. Well, I’m saying goodbye to you, too, because that’s true.

MATT: Right.

NASIR: But I’ll talk to you later and I’ll talk to you later. The first one was to you, the second one was to everyone else.

MATT: Perfect. Same for me.
Keep it sound and keep it smart.


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Legally Sound Smart Business

A business podcast with a legal twist

Legally Sound Smart Business is a podcast by Pasha Law PC covering different topics in business advice and news with a legal twist with attorneys Nasir Pasha and Matt Staub.
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Nasir and Matt suit up to talk about everything pertaining to employee dress codes. They discuss the Federal laws that govern many rules for employers, as well as state specific nuances in California and other states. The two also emphasize the difficulty in identifyingreligious expression in dress and appearance, how gender-related dress codes have evolved…

June 28, 2017

Nasir and Matt discuss the life cycle of a negative online review. They talk about how businesses should properly respond, how to determine if the review is defamatory, the options available to seek removal of the review, how to identify anonymous reviewers, whether businesses can require clients to agree not to write negative reviews, and…

June 7, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Mattbreak down social media marketing withguests Tyler Sickmeyer and Kyle Weberof Fidelitas Development. They first discuss contests and promotionsand talk about where social media promotions can go wrong,when businesses are actually running an illegal lottery, and the importance of a soundterms and conditions. Next, they…

April 3, 2017

On this episode of the Ultimate Legal Breakdown, Nasir and Matt go in depth with the subscription box business. They discuss where subscription box companies have gone wrong(4:30), the importance of a specifically tailored terms and conditions(6:30), how to structure return policies (11:45), product liability concerns (14:45),the offensive and defensive side of intellectual property (19:00),…

February 1, 2017

Nasir and Matt discuss the suit against Apple that resultedfrom a car crashed caused by the use of FaceTime while driving. They also discuss howforeseeable use of apps can increase liability for companies. Full Podcast Transcript NASIR: Hi and welcome to Legally Sound Smart Business! I’m Nasir Pasha. MATT: And I’m Matt Staub. Two attorneys…

January 5, 2017

The guys kick in the new year by first discussing Cinnabon’s portrayal of Carrie Fisher as Princess Leia soon after her death, as well as other gaffes involving Prince and David Bowie. They alsotalk about right of publicity claims companies could be held liable for based on using someone’s name or likeness for commercial gain.

December 22, 2016

Nasir and Matt discuss the recent incidentat a Victoria’s Secret store where the store manager kicked out all black women after one black woman was caught shoplifting. They then each present dueling steps businesses should take when employees are accused of harassment.

December 8, 2016

Nasir and Matt return to talk about the different types of clients that may have outstanding invoices and how businesses can convert unpaid bills to getting paid.

November 10, 2016

After a long break, Nasir and Matt are back to discuss a Milwaukee frozen custard stand that is now revising it’s English only policy for employees. The guys also discuss how similar policies could be grounds for discrimination and what employers can do to revise their policies.

October 6, 2016

The guys discuss the new California law that allows actors to request the removal of their date of birth and birthdays on their IMDB page and why they think the law won’t last. They also discuss how age discrimination claims arise for business owner.

September 29, 2016

Nasir and Matt discuss the racial discrimination claims surroundingAirbnb and how it’s handled the situation. They also discuss some practical tips for businesses experiencing similar issues.

September 8, 2016

Nasir and Matt discuss whyAmazon seller accounts are getting suspended and banned without notice and how business owners can rectify this situation through a Corrective Action Plan.

August 25, 2016

Nasir and Matt talk about the accusations surroundingfashion giant Zararipping off the designs of independent artists like Tuesday Bassen and howsmaller companies can battle the industry giants.

August 18, 2016

Nasir and Matt discuss Brave Software’s ad replacing technology that has caught the eye of almost every national newspaper and has a potential copyright infringement claim looming. They also welcome digital marketing expert Matt Michaelree to speak on the specifics of what Brave is attempting to do and whether it has the answers moving forward.

July 28, 2016

Nasir and Matt discuss the sexual harassment lawsuit filed by Gretchen Carlson against Fox CEO Roger Ailes. They also talk aboutthe importance of sexual harassment training and properly handling such allegations in the office.

July 15, 2016

Nasir and Matt talk about the changes at Starbucks that have led to many disgruntled employees and customers.

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We do all of this without utilizing the traditional billable hour model. You pay for the value we bring, not the time spent on calls, emails, and meetings.

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Pasha Law PC operates in the states of California, Illinois, New York, and Texas.

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Pasha Law Select offers the expertise of a high-end general counsel legal team for every aspect of your business at a fixed monthly rate. Pasha Law Select is deliberately designed to allow our legal team to be proactive, to anticipate, and to be comprehensive in serving our clients. To be great lawyers, we need to know our clients. We can’t know our clients unless we represent a select number of clients in the long-term. This is Pasha Law Select.

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