Employees Gone Wild!

Julie CopelandIsrael Discount Bank of New York

Scott GilbertMarsh and McLennan Companies, Inc.

Colleen RocheLinden Alschuler & Kaplan, Public Relations

Roy A. GinsburgZach Carter

Dorsey & Whitney LLP

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Domino’s Pizza Scandal

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Criminal Charges

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Fallout• Both employees faced criminal charges for

food contamination• Domino’s received a great deal of negative

press• Some credit the incident as the catalyst for

Domino’s most recent advertising campaign which focuses on food quality

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Nurse Steals Pain Medication

StarTribune

Charges: Nurse shoots up, patient“YOU’RE GONNA HAVE TO MAN

UP HERE AND TAKE SOME PAIN.”

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“Man up here and take some of the pain”• Registered nurse at Abbott Northwestern

Hospital• Reportedly stole about two-thirds of pain

meds from patient about to undergo surgery

• Told the patient to “man up here and take some of the pain” and to “go to your happy place”

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McDonald’s Manager Strip Search

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Gullible Manager• Someone called a McDonald’s restaurant,

posing as a police officer• The caller convinced a manager that a

female employee had stolen a customer’s wallet and that the manager needed to strip search the employee

• The female manager and, later, her then-fiancé strip searched the 18-year-old employee in a back office

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Lawsuits

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Fallout• Covered by a number of major news networks• Both the manager and her then-fiancé faced

serious criminal charges • The employee sued McDonald’s Corp. and

won a $6.1 million jury verdict, which was upheld on appeal

• The manager also sued McDonald’s Corp. and was eventually awarded $500,000 in damages

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AFLAC Duck Tweeting Scandal• Gilbert Gottfried was the voice of the

popular AFLAC duck

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Popular Commercials

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Tsunami Tweets• Two of Gottfried’s less offensive Tweets:

“My Japanese doctor advised me to stay healthy I need 50 million gallons of water a day.”

“Japan called me. They said “maybe those jokes are a hit in the US, but over here, they’re all sinking.”

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Fallout• Over 75% of AFLAC’s business is in Japan• According to AFLAC’s corporate overview: “Aflac

Japan is the number one insurance company in Japan in terms of individual policies in force and the largest foreign insurer in Japan in terms of premium income. Aflac Japan also ranks first in the number of individual policies in force among all of Japan’s life insurers and is the fifth most profitable foreign company in any industry in Japan.”

• Gottfried was very quickly fired

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The Collapse of Barings Bank• 28-year-old futures trader at Barings was

tasked with oversight of his own trades• Lost £827 million ($1.3 billion), over twice

the bank’s trading capital• Barings, the oldest merchant bank in

London, collapsed and was purchased by ING for £1

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“Rogue Trader”• The trader wrote a book about the

incident• The book was made into a movie,

portraying the trader as something of a hero

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Ford Trade Secret Theft• Ford design engineer copied over 4,000 sensitive

Ford documents onto an external hard drive• The documents included secret designs of Ford

engine-transmission systems and electric power supply systems

• The engineer then resigned from Ford and eventually went to work for a Chinese auto manufacturer

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Fallout• The U.S. Attorney’s Office brought a

criminal case against the engineer• He eventually pleaded guilty and now

faces 70 months in prison followed by deportation to China

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Public Criticism of Your Employer

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Fallout• NYT Op Ed Article (March 14, 2012)• “Why I Am Leaving Goldman Sachs”• Written by Greg Smith, a mid-level

Goldman executive• Blamed CEO and President for a “decline

in the firm’s moral fiber”• Described the environment as “toxic” and

“destructive”

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Fallout• Stated that Goldman’s executives

characterized the firm’s clients as “Muppets”• Stock dropped $4.17/share; market cap

decline of $2.15 Billion• (But, Goldman’s stock still up approximately

33 percent year-to-date)• News articles on Smith highlighted past

problems for Goldman during preceding year

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Hewlett-Packard Mark Hurd Scandal• Mark Hurd was HP’s CEO and board chair

(he replaced Dunn)

• He was extremely successful running the company

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Hewlett-Packard Mark Hurd Scandal• Hurd became enamored with an actor-

turned-marketing consultant, who had done some work for HP

• Hurd allegedly fudged personal expense reports to hide thousands of dollars spent on the consultant

• An internal investigation determined that Hurd had violated HP policy, and Hurd resigned under pressure

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Fallout• Following Hurd’s resignation, HP’s stock

quickly dropped over 8%, representing market capitalization of almost $9 billion

• Hurd received over $12 million in severance, as well as stock options worth over $22 million

• Shareholders brought a derivative suit based on Hurd’s departure and resultant fallout

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More Fallout• Hurd was quickly named co-president of the

board of HP-competitor, Oracle• Oracle’s CEO sent an email to the New York

Times stating: “The HP Board just made the worst personnel decision since the idiots on the Apple Board fired Steve Jobs many years ago. That decision nearly destroyed Apple and would have if Steve hadn't come back and saved them. HP had a long list of failed CEOs until they hired Mark who has spent the last five years doing a brilliant job reviving HP to its former greatness.”

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Questions