April 2015

How to ‘Bell-weather’ a Recall: Position Your Company to Withstand a Recall Efficiently and Effectively

 

Headlines announcing the recall of some product or another seem to appear as regularly as the changing of the seasons, and often times, to the consumer at large, they come and go just as subtly. It is wholly unsurprising, however, that recalls involving a food item often land with the jolt and turbulence of a spring thunderstorm.

The notion that food, the very purpose of which is to nourish and sustain, could in fact be causing us substantial harm is inherently alarming, and opportunistic news outlets are well aware that food-related recalls increase viewership and website traffic.

Making headlines right now, just as warmer weather is finally reaching much of the country, are two separate wide-ranging recalls involving that American favorite, ice cream. The recalls were initiated by popular producers Blue Bell Creameries, of Texas, and Jeni’s Splendid Ice Creams, of Ohio. The culprit in each recall has been identified as the bacteria Listeria monocytogenes, a potentially lethal contaminant.Jeni's Splendid Ice Creams

Jeni’s Splendid initiated a preemptive voluntary recall of its entire product line on April 23, 2015, while temporarily closing its retail scoop shops, after a random sample collected by the Nebraska Department of Agriculture tested positive for the bacteria. Blue Bell’s path to recall followed a rockier road.

A joint CDC and FDA investigation into an outbreak of 10 reported illnesses resulting in hospitalization, including three fatalities, from January 2010 through January 2015 eventually pointed to Blue Bell ice cream as the likely source. After laboratories in multiple states isolated the Listeria bacteria in several of its products, Blue Bell issued a limited voluntary recall of what it believed were the affected lines in March, 2015. After further investigation resulted in positive test samples in additional product lines, Blue Bell finally moved issued a full recall of all of its products currently on the market on April 20, 2015.

A recall has the potential to create consumer panic towards a product, sometimes an entire brand, and it is almost always a major conundrum for the product seller. The decision to issue a recall of a product that your company has placed on the market involves balancing as many factors as there are flavors of ice cream. The potential impacts are far reaching and substantial, not just to the consumer, but to everyone involved in placing the product in the stream of commerce, from the manufacturer, to the distributor, to the retail seller. What are the risks to the consumer? How many people may potentially be affected? What is the cost of the recall to your company, not just in dollars and cents, but in brand goodwill? How will your employees be impacted? Will you be facing punitive action by a regulatory agency is nothing is done? Will you be exposed to civil or criminal litigation? If a recall is necessary, how broad should it be?

The recalls issued by Jeni’s and Blue Bell followed different paths and for different reasons, but both necessarily caused significant impact on the companies and their respective brands. Blue Bell, avoiding the nuclear option of total recall, rolled out piecemeal corrective measures while continuing wide-scale production, thereby keeping revenue streams open, but exposing itself to protracted negative media coverage and potentially harming further consumers when additional product lines turned up positive for Listeria. There is also a risk that they may ultimately face punitive damages in a civil suit if it is found that their response was too slow or insufficient.

Jeni’s swift and sweeping response likely reduce any long-term impact of the incident to a hiccup, potentially minimizing damages in any future civil law suit.

Meanwhile, Jeni’s (having had the benefit of observing Blue Bell’s struggles,) opted to shut its operations down entirely at the first positive test, even absent any evidence of contaminate-related illnesses. Though likely causing substantial interruption to their bottom line in the short term, Jeni’s swift and sweeping response likely reduce any long-term impact of the incident to a hiccup, potentially minimizing damages in any future civil law suit, and perhaps even increasing consumer confidence in the brand due to their immediate and unequivocal response.

Blue Bell Ice CreamsEvery recall scenario is unique, and when the decisions are made companies do not have the benefit of hindsight, but whether you are an ice cream company, pasta maker, or industrial tool manufacturer, it is important to learn from a situation like Blue Bell’s and Jeni’s and prepare for the future. Companies would be well-advised to have a team on standby for a recall situation, consisting of product and industry specific specialists, and legal, financial and marketing professionals. Furthermore, it is important to think of the long term effects of an outbreak, particularly on your brand name, and not just the short term financial impact of a large scale recall when making any decision.

Of course, preparing a proactive strategy to avoid facing a recall situation in the first place by maximizing internal safety and quality control measures is vital to any manufacturer or supplier. For example, one measure which we have utilized to the benefit of our clients is to conduct periodic continuing education seminars on hot button litigation issues in their specific industry. These presentations benefit both company management and the everyday employees on the product floor and are designed to help limit reoccurring pitfalls and problems which we see once matters reach litigation. With proper preparation and guidance, a company can either avoid a recall altogether, or at the very least minimize any potential negative consequences in the unfortunate event that one must be issued.

From television to transportation services, it seems that everywhere we look, people are seeking increased diversity. We want to see every race, gender, ethnicity, sexual orientation, religion, and socioeconomic background represented in every industry. It has been proven that diversity can be a driver of economic growth, but what about the legal profession? Do clients benefit from diversity within their law firms?

While it may appear biased coming from a female minority, I believe all signs point to yes. Law firms with diverse workforces have unique advantages difficult to attain through any other means. The following lists just some of those advantages:

Stronger Firm

  • Let’s start off with the obvious: law firms benefit from diversity in the same way any other business does. A diverse work environment is more likely to result in greater acceptance of its employees, which results in a happier work environment, which leads to lower turnover. These are all positives for clients when it comes to the bottom line because decreasing ‘the churn’ promotes efficiency; fewer attorneys and staff will work on a client’s matters over a longer period of time. Moreover, happy employees are proven to be more productive.

Diversity Produces Better Quality Work

  • I was raised in a Mexican-American household. We spoke Spanglish at home and ate Mexican food four out of five nights. As a child, I believed this to be the ‘normal’ American life. However, through my friendships with people that did not share my culture, I came to realize there were many other languages being spoken and delicious meals being enjoyed by families around the country. My perception of what an American family looks like expanded. In a way, the career of an attorney is not much different. Attorneys from different backgrounds each provide a unique perspective and approach to the law. When an attorney has the opportunity to work with a diverse group, they are able to expand their perspective on the key issues of a case and are thus in a better position to determine the best approach. The attorneys benefit, as do the clients.

Larger NetworkDiversity in Legal Services

  • Clients look to their attorneys for more than just legal advice, often times seeking referrals in other fields or jurisdictions. It is easy to see why law firms with attorneys practicing in various states and practice areas from various backgrounds can be beneficial to clients given the large network of connections the firm creates. Even within the same city, law firms with employees from assorted backgrounds are more likely to have a larger network, often through involvement in organizations or associations.

Greater Capability

  • Let’s not overlook language. A firm with a multilingual workforce has the capability to assist clients in unique circumstances. It is not uncommon for attorneys to meet with witnesses who speak other languages. Legal documents often need to be translated or drafted in another language. Moreover, in the event a client has international business, working with attorneys with citizenship in other countries can also be useful. Having these resources available at a moment’s notice puts the client in a better position to be prepared for whatever challenges may come up.

Diverse Firms are More Relatable

  • Legal representation usually does not start and end in the office. Zealous advocacy often requires communicating directly with company employees and/or the general public. Consider instances in which attorneys need to locate witnesses to speak favorably on a client’s behalf for a deposition or trial. How about when the attorney is speaking on a client’s behalf at trial before a jury? A diverse law firm is a better reflection of the general population, which in turn helps make the firm more relatable to the public as an agent of the client. Working with relatable attorneys and staff could be the difference between winning and losing a case.

Diversity is certainly not the only way to gain a competitive advantage, but it’s hard to discount that it can have profound and positive effects on both clients and lawyers. Whether a client is an individual, a small business, or a Fortune 500 company, diversity should be a key factor when considering what kind of law firm to partner with. With the global sharing economy increasingly driven by technology, diversity is more likely to provide the necessary tools a client should want and need at its fingertips.