Business VS Hespection Case Study: Loblaws Hepatitis A Incident
Business and Selected Stakeholder Relationship | ------- Loblaws Hepatitis A Class ction Case Study | | | | | | |
Index
Introduction of the Loblaws Hepatitis A Class Action incident 3
Introduction of Loblaws company 3
Definition of class action 4
The reason of the incident 5
Serious impacts and negative media coverage 5
Alternatives 6
a)Precautions before the issue arises 6 b)Remedy after the issue occurred 7
Recommendations 7
Background of the Loblaws Hepatitis A Class Action incident
On September 3, 2002, a class action was launched in Toronto to against Loblaws alleging that customers and other persons may have been exposed to the Hepatitis A virus because of allegedly contaminated produce at Loblaws' Humbercrest store located at 3671 Dundas Street West in Toronto. This lawsuit relates to an employee of Loblaws infected with Hepatitis A. Although the identity of this employee was not disclosed, the fact was confirmed that this employee, who worked in the section of the store in which products were prepared, displayed and sold, has caused the infection to spread. …show more content…
Thousands of customers of Loblaws obtained an inoculation following the identification of the infected individual as an employee of Loblaws, working in the produce section of one of its stores.
On June 15, 2006, the Settlement of this action was approved by the Superior Court. Loblaws would pay $150.00 to each class member and all the cost of notification, administration, and distribution of the settlement fees. However, Loblaws supermarkets and loblaw companies didn’t admit any wrongdoing or liability on their part. The settlement has been made to maintain loblaws’ good will with its customers and its concerns with the inconvenience they may have sustained as a result of this
incident.
Introduction of Loblaws company
Loblaw Companies (Loblaw) is a subsidiary of George Weston. Loblaw distributes food products, general merchandise, drugs, and financial products and services. It is the largest food retailers in Canada. The company primarily operates in Canada. It is headquartered in Toronto, Canada and employed139, 000 people as on December 29, 2007. The company recorded revenues of approximately $27,493.1million during the 2007, an increase of 2.6% over year 2006. The operating profit of the company was approximately$688.6 million. The net profit was approximately $308.8 million in 2007, as compared to net loss of approximately $204.9 million in 2006.
Definition of class action
In law, a class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. However, in several European countries with civil law different from the English common law principle (which is used by U.S. courts), changes have been made in recent years that allow consumer organizations to bring claims on behalf of large groups of consumers. If the action is certified as a class action, which is the case, persons who do not wish to pursue their claims against Loblaws or who wish to pursue their claims on an individual basis may opt out of the class action and commence their own individual actions at their own expense. The class members will not be required to pay any legal fees to the class action lawyers unless the class action is successful at trial or the class action is settled, in which case the legal fees will be divided amongst the class members on a pro rata basis and deducted from the amount of compensation that the class members may ultimately receive.
The reason of the incident
Since this case is analyzed basing on the course of Ethics and Shareholder management, the reason could be divided from two perspectives. First, if we assume that Loblaws was not aware that its employee was carrying Hepatitis virus when working in store, but the employee knew that, then it was not ethical that he kept working without telling or report to anyone about his infective illness. If the company had already knew that one of its employees was carrying contagious virus, the manager should have stop the employee working in the store until he was healed. However, it is highly possible that none of the two sides knew about the health condition of this employee. Then the huge loss result in the incident should due to, to large extent, the poor crisis management which originated to lack of knowledge of Ethics and Shareholder management.
Serious impacts and negative media coverage
From the microscopic point of view, this incident damaged the image of this leading retailer critically. After the issue was exposed, loblaws Hepatitis incident attracted public attention immediately because of the high transmitting speed of newspapers and other massive media. Thousands of people suffered with Hepatitis and public became to be worried about it. Also, Public Health shut down the Loblaws store on Friday. And a Hepatitis A clinic opened at Crossways on Sunday, August 22nd, 2002, to deal with people lining up who probably were infected. What’s more, as well as the compensation fees paid to infected customers by Loblaws, based on settlement from court, Loblaws had to pay class counsel fees in the sum of $700,000 including charges.
From the microscopic point of view, this incident harmed the fine connection between Loblaws and society. According to our textbook, the loblaws Hepatitis incident, like other common issues carrying social or ethical implications illustrate the widespread interactions between business and society. Since Loblaws company is in food industry which is a highly sensitive to public health issue, the reputation of the company about food safety and the regulation are crucial. Also, to achieve a success in doing a business, the company is tightly related to the society, which contains multiple publics, systems, and stakeholders. For example, business is connected to community, government, employee, consumer, and owners. In this case, the incident negatively impacted on almost every part which the company connected with.
Alternatives a)Precautions before the issue arises
In a short run, the first thing Loblaws should do was to establish a positive public image. Based on the concern about Ethics, from a manager’s point of view, Loblaws company should have done some actions immediately to avoid the probability that the damage would increase when Loblaws first noticed the accident. For instant, take the initiative to public the news, alerting its customer about the danger of getting infected and providing treatments.
In a long run, Loblaws should focus more on the food safety, and employee’s health care as well. To make sure of being the leading food retailer in Canada, Loblaws needs to ensure that the food offered by Loblaws is safe enough to let public believe and choose Loblaws. To achieve this goal, the food itself must avoid being contaminated and also all the processes happening in the process of delivering to consumers should be protect and monitored. b)Remedy after the issue occurred
After the incident was known by public, Loblaws should try its best to restore positive reputation. Some actions, such as confessing to public and paying compensation, should be done in time. After that, Loblaws could let public know what regulation or precaution Loblaws is doing and planning to do to prevent the recurrence of similar incidents.
Recommendations
* take the initiative to public the news immediately when the incident happened * Alert its probably infected customer about the incident * Provide place and fees for treatments. * Make compensation to consumers who are influenced * Offer obligated physical examination to employees in a certain interval * Make more strict regulation for food safety * Public the actions Loblaws is doing to deal with incident * Invite an authorized good regulatory agent to investigate supermarkets after doing actions as above and public the result
Reference
Textbook
http://www.toronto.ca/legdocs/2003/agendas/committees/hl/hl030127/it016d.pdf http://www.just-food.com/news/loblaw-faces-class-action-over-hepatitis-contamination_id70061.aspx http://www.loblaws.ca http://www.globenewswire.com/newsroom/news.html?ref=rss&d=31295 http://www.hotzlawyers.com/loblaws_hepatitis_a.htm
Index
Introduction of the Loblaws Hepatitis A Class Action incident 3
Introduction of Loblaws company 3
Definition of class action 4
The reason of the incident 5
Serious impacts and negative media coverage 5
Alternatives 6
a)Precautions before the issue arises 6 b)Remedy after the issue occurred 7
Recommendations 7
Background of the Loblaws Hepatitis A Class Action incident
On September 3, 2002, a class action was launched in Toronto to against Loblaws alleging that customers and other persons may have been exposed to the Hepatitis A virus because of allegedly contaminated produce at Loblaws' Humbercrest store located at 3671 Dundas Street West in Toronto. This lawsuit relates to an employee of Loblaws infected with Hepatitis A. Although the identity of this employee was not disclosed, the fact was confirmed that this employee, who worked in the section of the store in which products were prepared, displayed and sold, has caused the infection to spread. …show more content…
Thousands of customers of Loblaws obtained an inoculation following the identification of the infected individual as an employee of Loblaws, working in the produce section of one of its stores.
On June 15, 2006, the Settlement of this action was approved by the Superior Court. Loblaws would pay $150.00 to each class member and all the cost of notification, administration, and distribution of the settlement fees. However, Loblaws supermarkets and loblaw companies didn’t admit any wrongdoing or liability on their part. The settlement has been made to maintain loblaws’ good will with its customers and its concerns with the inconvenience they may have sustained as a result of this
incident.
Introduction of Loblaws company
Loblaw Companies (Loblaw) is a subsidiary of George Weston. Loblaw distributes food products, general merchandise, drugs, and financial products and services. It is the largest food retailers in Canada. The company primarily operates in Canada. It is headquartered in Toronto, Canada and employed139, 000 people as on December 29, 2007. The company recorded revenues of approximately $27,493.1million during the 2007, an increase of 2.6% over year 2006. The operating profit of the company was approximately$688.6 million. The net profit was approximately $308.8 million in 2007, as compared to net loss of approximately $204.9 million in 2006.
Definition of class action
In law, a class action or a representative action is a form of lawsuit in which a large group of people collectively bring a claim to court and/or in which a class of defendants is being sued. This form of collective lawsuit originated in the United States and is still predominantly a U.S. phenomenon, at least the U.S. variant of it. However, in several European countries with civil law different from the English common law principle (which is used by U.S. courts), changes have been made in recent years that allow consumer organizations to bring claims on behalf of large groups of consumers. If the action is certified as a class action, which is the case, persons who do not wish to pursue their claims against Loblaws or who wish to pursue their claims on an individual basis may opt out of the class action and commence their own individual actions at their own expense. The class members will not be required to pay any legal fees to the class action lawyers unless the class action is successful at trial or the class action is settled, in which case the legal fees will be divided amongst the class members on a pro rata basis and deducted from the amount of compensation that the class members may ultimately receive.
The reason of the incident
Since this case is analyzed basing on the course of Ethics and Shareholder management, the reason could be divided from two perspectives. First, if we assume that Loblaws was not aware that its employee was carrying Hepatitis virus when working in store, but the employee knew that, then it was not ethical that he kept working without telling or report to anyone about his infective illness. If the company had already knew that one of its employees was carrying contagious virus, the manager should have stop the employee working in the store until he was healed. However, it is highly possible that none of the two sides knew about the health condition of this employee. Then the huge loss result in the incident should due to, to large extent, the poor crisis management which originated to lack of knowledge of Ethics and Shareholder management.
Serious impacts and negative media coverage
From the microscopic point of view, this incident damaged the image of this leading retailer critically. After the issue was exposed, loblaws Hepatitis incident attracted public attention immediately because of the high transmitting speed of newspapers and other massive media. Thousands of people suffered with Hepatitis and public became to be worried about it. Also, Public Health shut down the Loblaws store on Friday. And a Hepatitis A clinic opened at Crossways on Sunday, August 22nd, 2002, to deal with people lining up who probably were infected. What’s more, as well as the compensation fees paid to infected customers by Loblaws, based on settlement from court, Loblaws had to pay class counsel fees in the sum of $700,000 including charges.
From the microscopic point of view, this incident harmed the fine connection between Loblaws and society. According to our textbook, the loblaws Hepatitis incident, like other common issues carrying social or ethical implications illustrate the widespread interactions between business and society. Since Loblaws company is in food industry which is a highly sensitive to public health issue, the reputation of the company about food safety and the regulation are crucial. Also, to achieve a success in doing a business, the company is tightly related to the society, which contains multiple publics, systems, and stakeholders. For example, business is connected to community, government, employee, consumer, and owners. In this case, the incident negatively impacted on almost every part which the company connected with.
Alternatives a)Precautions before the issue arises
In a short run, the first thing Loblaws should do was to establish a positive public image. Based on the concern about Ethics, from a manager’s point of view, Loblaws company should have done some actions immediately to avoid the probability that the damage would increase when Loblaws first noticed the accident. For instant, take the initiative to public the news, alerting its customer about the danger of getting infected and providing treatments.
In a long run, Loblaws should focus more on the food safety, and employee’s health care as well. To make sure of being the leading food retailer in Canada, Loblaws needs to ensure that the food offered by Loblaws is safe enough to let public believe and choose Loblaws. To achieve this goal, the food itself must avoid being contaminated and also all the processes happening in the process of delivering to consumers should be protect and monitored. b)Remedy after the issue occurred
After the incident was known by public, Loblaws should try its best to restore positive reputation. Some actions, such as confessing to public and paying compensation, should be done in time. After that, Loblaws could let public know what regulation or precaution Loblaws is doing and planning to do to prevent the recurrence of similar incidents.
Recommendations
* take the initiative to public the news immediately when the incident happened * Alert its probably infected customer about the incident * Provide place and fees for treatments. * Make compensation to consumers who are influenced * Offer obligated physical examination to employees in a certain interval * Make more strict regulation for food safety * Public the actions Loblaws is doing to deal with incident * Invite an authorized good regulatory agent to investigate supermarkets after doing actions as above and public the result
Reference
Textbook
http://www.toronto.ca/legdocs/2003/agendas/committees/hl/hl030127/it016d.pdf http://www.just-food.com/news/loblaw-faces-class-action-over-hepatitis-contamination_id70061.aspx http://www.loblaws.ca http://www.globenewswire.com/newsroom/news.html?ref=rss&d=31295 http://www.hotzlawyers.com/loblaws_hepatitis_a.htm