Don Henley, frontman of the band Eagles, recently reached a settlement with Wisconsin-headquartered Duluth Trading Company after it used his name and a lyric from an Eagle’s song without his permission. Duluth’s ads for Henley shirts read “Don a Henley and take it easy.” While Duluth Trading might have thought of Henley as a kind of laid back guy who wouldn’t mind a flattering pun — or whether the outfitter company really didn’t realize that it could not use his name, likeness or music to promote any products — the judge set the record straight. Henley was awarded an apology and settlement in the form of a cash donation to his nonprofit, Walden Woods Project. What we see from this example is that use of another’s brand or work without permission is considered “theft” – especially when used in a marketing capacity to earn profit.
Meanwhile, in Minnesota, a bar owner is probably wishing he had better understood – or followed – federal law which prohibits transporting alcohol across state lines without a license. The owner of Maple Bar in Maple Grove, MN slipped across the line into Hudson, Wisconsin to purchase kegs of Spotted Cow from a liquor store, with the intention of reselling the New Glarus Brewing Company’s popular brand in his establishment. Charges have yet to be filed, but he’s been formally accused of the action and it is under investigation. What does this mean, as a business axiom? If a distribution idea seems like a no-brainer that no one else seems to have figured out already, it’s probably a wrong idea and you’re missing the piece that explains why; or (2) nobody is invisible anymore – if you try to go under the radar to do something illegal, most times it will come back to bite you in the hindquarters.
With more than 127,000 employees worldwide, it’s easy to understand why Honeywell has had a lot of experience with the U.S. Equal Employment Opportunity Commission (EEOC). The question is, is it learning from discrimination mistakes and then training managers to that standard? In 2002, the U.S. EEOC sued on behalf of a single plaintiff on the grounds of discrimination due to a disability, and it won a $100,000 settlement and other curative relief including providing training at its Union Hills facility for company leadership as to how to accommodate employees with disabilities. In 2004, Honeywell was ordered to pay $2.14 million to settle an age discrimination suit filed by the EEOC for firing a targeted group of sales staff due to their age during a company reorganization. Now Honeywell potentially finds itself again at opposite sides of a courtroom from the government watchdog.
In a filing made late last year, Honeywell stands accused of discrimination with regard to its wellness program. Workers and their spouses are expected to undergo a biometric screening to test cholesterol levels and a determination of body mass. According to the EEOC’s complaint, holdouts are assessed a $500 surcharge on 2015 medical plan costs, and they can also lose as much as $1,500 in company contributions to health savings accounts and even be charged back up to $2,000 in tobacco-related surcharges. Honeywell’s counter argument is that the EEOC is out of step with the Affordable Care Act. It calls the lawsuit “frivolous” suggests the court first determine if the government’s own stated policies are in conflict between agencies.
What we can take away from this as a business axiom is this – always err on the side of caution when dealing with the EEOC and review policy diligently to prevent any suggestion of a discriminatory practice. The Honeywell case was the third wellness program challenge filed by the EEOC in 2014, and likely is a predictor of more activity in 2015. Check your wellness program guidelines (particularly charge backs) with the intention of creating your best non-discriminatory program that nonetheless incentivizes health. And good luck with that.
We’ll review more corporate lawsuits in future columns because the best way to prevent a mistake is first to acknowledge that what seems okay is not always okay, and ignorance is not a viable legal defense.