Kudler_Fine_Foods_Regulatory_Environment_Paper

Regulatory Environment - ‘Kudler Fine Foods’ University of Phoenix Decision to Shut Down Kudler Fine Foods has established many entrepreneurial ventures, which have made the company very profitable. Kudler’s stores consist of a bakery, produce, meat and seafood, condiments and packaged goods, and cheese, and dairy (University of Phoenix, 2008, Kudler Fine Foods Intranet, para. 1). Kudler’s mission always has been customer satisfaction first, coupled with an exceptional experience while patronizing the establishment. Kudler has decided to merge with local organic growers and create a catering service to increase profits and provide customers with more of what they are asking for. The aftermath of Kudler’s decision to incorporate these new services will require Kudler to close temporarily the deli, bakery, and packaged food departments for three months for renovation. Unfortunately for some employees in these departments, layoffs during this time will be inevitable. If Kudler proceeds with the temporary layoffs, they will have to determine if they can lawfully close these areas of their establishment and what responsibility do they have to its workers. According to the doctrine of employment at will, Kudler Fine Foods is well within their rights legally to lay-off employees, even for a temporary period. The doctrine of employment at will states, “That either participant can end an employment obligation for an undetermined span of time. The discharge can take place at any given moment, regardless of good or bad reason, or no reason at all (Mallor, Barnes, Bowers, & Langvardt, 2003, p. 1191).” Under this doctrine, Kudler Fine Foods has to permit terminated workers to be paid for labor already completed. Kudler Fine Foods believes the temporary layoffs are for a good reason because renovation of its stores is sure to bring in more profits later. Before providing layoffs, Kudler Fine Foods must consider three things: (a) Did all workers receive employee handbooks when hired; (b) did workers understand and sign the doctrine of employment at will agreement; and (c) did the handbook include an acknowledgement of legal intent regarding termination policies' If all employees were made aware of Kudler’s doctrine of employment at will policy through their handbook upon hiring, then Kudler is within their legal rights to provide terminations. Because of the company’s unspoken agreement with its workers, Kudler has a commitment to aid during this change. Can Kudler transfer the laid off workers to other positions in another store' Can Kudler place workers in another department within the same store, but with fewer hours' Human resources can combat employee stress by offering workers the opportunity to work within another department, but with fewer hours. The workers who choose to stay can then determine how this decision will affect their unemployment benefits and decide if staying on with Kudler is worth it. Human resources can assist workers with temporary unemployment benefits for the next three months by sending them to the nearest unemployment agency for temporal services. Human resources can ensure workers once the renovation is completed, Kudler will ask them to return to work. Last, human resources can offer some workers the opportunity to work in its new catering service. If Kudler orally or contractually agrees to bring the same workers back after completion of renovations, a legal agreement has been set in motion. Contracts with Organic Growers Kudler Fine Foods surveyed their clientele in 2008 and 2009 to note how the organization was fairing. The survey outcomes could be separated into three different areas of performance – the facilities, the merchandise being sold, and the customer service being provided. Based on the year-over-year outcomes of this survey, Kudler Fine Foods strengths lie within their facilities, value, and merchandise (Table One); their weakest results lie within the customer service realm. Table One: Year-over-year affirmative survey results Attributes 2009 2008 Overall satisfaction 12 respondents very strongly agreed Four respondents strongly or very strongly disagreed Good value for the money 17 respondents very strongly or strongly agreed Zero respondent scores noted Selection of products 14 respondents strongly agree Eight respondents strongly disagreed Store atmosphere 20 respondents very strongly or strongly agreed Eight respondents very strongly or strongly agreed (University of Phoenix, 2007) With regard to Kudler Fine Foods strengths, more than half believe there was an improvement in overall satisfaction, value, and merchandise. In the customer service area, the scores remained relatively stagnant year-over-year. With regard to the first attribute, “The customer service representative was very knowledgeable,” in 2008, 12 of the 31 respondents (39%) disagree, strongly disagree, or very strongly disagree compared to 2009 when 13 of the 23 respondents (56%) (University of Phoenix, 2007). The percentage of disappointed respondents is higher in 2009, but the representative sample of respondents is eight less. Regarding the second attribute, “The customer service representatives were very courteous,” in 2008, five of the 25 respondents (20%) strongly or very strongly disagreed compared to 2009 when five of the 23 respondents (21%) strongly or very strongly disagreed (University of Phoenix, 2007). What these results prove is Kudler Fine Foods is not advancing their customer service skills in a favorable direction. These customer service results must be a top priority for Kudler Fine Foods senior management. Addressing this issue immediately is a significant factor in whether Kudler Fine Foods meets its strategic goals or not. As it has been pointed out though, the representative samples were not much, but the response is important enough to elevate concerns and employ change. The encouraging development to note here is nearly all of the attributes have increased between 2008 and 2009, especially overall satisfaction, and merchandise. Therefore, it can be assumed that the use of contracts with local organic suppliers, Kudler Fine Foods could: (a) Satisfy the consumers by keeping their prices in line with their merchandise. Kudler Fine Foods could still negotiate lower costs for the goods; thus, cost savings are then being passed along to the consumer. (b) Continue ensuring the consumer senses the value of the goods being acquired. By creating a contract with local organic suppliers, the clientele may perhaps sense that the organic goods have a higher value than commercially processed merchandise. It would be advantageous for both Kudler Fine Foods and the local organic suppliers to enter a bilateral contract where “both parties exchange promises and the contract is formed as soon as the promises are exchanged (Mallor, Barnes, Bowers, & Langvardt, 2003).” The local organic merchandise suppliers want some certainty regarding where their goods are sold. Kudler Fine Foods may prefer to administer the day-to-day functions of the produce division comparable to a farmer’s marketplace and permit the contracted designate the vendor(s) accountable for the stocking and appearance of Kudler’s wares. Kudler Fine Foods desires to have their shelves supplied with superior organic merchandise for the consumer. This would bring the costs in-line with the value of the merchandise and encourage a sense of enhanced value for the consumer. Mutually Kudler Fine Foods and the local organic suppliers would be required to adhere and/or conform to the Uniform Commercial Code (UCC) in structuring the contracts. This might allow Kudler Fine Foods and the local organic suppliers to create a standardized set of rules intended for the contracted dealings. It may also allow Kudler Fine Foods to craft a body of rules that could arrive at the bottom of frequent problems of daily commercial dealings and evenhandedness, and high values in the market. The agreement must delineate the rules and principles for each participant and the consequences that ought to be imposed if the agreement were not being followed. Product Liability and Regulatory Implications According to the United States Department of Agriculture Economic research Services, “Research shows some consumers perceive organic products as a safe and healthy way to avoid potential risks of exposure to pesticide residue in food (Ralston, 2004).” Unsullied fare presents added risks to the patrons through food-borne illnesses. This develops into a liability for Kudler Fine Foods if their patrons turn out to be ill from goods sold at Kudler Fine Foods stores. Harmful effects of food-borne illnesses were seen from the Hepatitis A epidemic associated with the Mexican eatery Chi-Chi’s (Marler Clark, 2003). After Great Britain publicized the probable connection linking mad cow disease and a new variation of vCJD or Creutzfeldt - Jakob disease in humans, the British beef business suffered significantly (World Health Organization, 2002). In recent times, many other forms of food-borne illnesses have arisen: • E-coli in raw spinach • Guatemalan raspberries with the parasite Cyclospora cayetanensis (CDC, 2000) Food-borne illnesses are constantly going to be present in a business that deals with foodstuff products, yet when using organic processes to cultivate produce the danger for food-borne illnesses swell. Therefore, Kudler Fine Foods could see an increase in liability of the goods to the organization. Kudler Fine Foods will need to establish requirements to enact quality control measures to protect and maintain Kudler Fine Foods organic produce quality label to reduce the possibility of food-borne illnesses. Acknowledging the phases in which produce must undergo is essential: • Produce liability, proving to the consumer that the produce meets the Organic Standards. Every product a retail store sells comes packaged with some sort of liability because of the nature of consumption. The manufacture is to ensure proper labeling of the content of the product; this protects the company from damages it may cause the consumer. By the manufacture labeling the product adequately (listing all the ingredients contained in product, proper storage if necessary to refrigerate and expiration date) they legally have protected themselves of damages, my the consumer. The only liability that may exist is a defective product; these should be found before leaving the company. The same concept is true with organic produce, although some differences stand when labeled with the USDA standard seal. The USDA standard seal means the product has met the standard process, packaging, and farming set my and is "compliant with the standards set forth by the USDA (Organic Valley Family of Farms, 2010).” • Regulatory implications on produce, ensuring the growers are following all standards of quality control during the process of growth, harvesting, and packaging the produce. Kudler's warehouse standards to accept produce, to maintain only excellent produce on shelves, as found in Kudler 2003 Strategic Plan "our perishable goods are rotated out of inventory every two or three days, either by being thrown away or donated to local charities. Donated food is still in good condition, but not excellent condition so it is removed from the shelves on an ongoing basis (University of Phoenix, 2007).” “In 1990 the Organic Foods Production Act (OFPA) Title XXI, 1990 Farm Bill created the U.S. National Organic Standards (Organic Valley Family of Farms, 2010).” The National Organic Standards program's responsibility is "implementing the organic standard and to accredit state agencies and private organizations to certify organic producers and handlers and to oversee enforcement of the standards (Organic Valley Family of Farms, 2010).” In essence the National Organic Board reports to the USDA. For consumers this simple label "organic" gives piece of mind that the product being purchased are in compliance with the U.S. Department of Agriculture. If Kudler Fine Foods is not attentive to this issue the organization could result in suffering the same consequences as Chi-Chi’s. Kudler Fine Foods needs to make sure local growers have certification as organic growers and are in good standing with the National Organic Program. Added measures such as increasing their liability insurance to counteract the harmful effects of food-borne illnesses linked to Kudler Fine Foods and their catering business will protect Kudler from expensive litigation. These steps will help ensure Kudler Fine Foods of receiving quality produce at all times for its customers. Employment Law Considerations Kudler Fine Foods is faced with the need of hiring new employees once the new catering service is available. As well, they must contract with new farmers for their organic produce business. There are two different aspects of hiring with theses two new employment opportunities. Catering services usually involve part-time employees at a lower pay scale. Contracted farmers are usually identified and hired by the quality of their product. Kudler currently understands that they are liable to lawsuits if they don’t respect the laws that govern workplace hiring practices. There is a clear difference between picking an employee for discriminatory reasons and because one has a different skill set. It is important to look at the different laws that Kudler must abide to in this new hiring wave of employees. The first group of laws that must be abided by is Equal Employment Opportunity bylaws. These laws prohibit the different areas of discrimination that can occur in the workplace. The Department of Labor describes this as, “discrimination on the basis of race, color, religion, sex, age, national origin, or status as an individual with a disability or protected veteran (Department of Labor, pg. 1, 2010).” These laws come into play with the catering business with who Kudler hires because a candidate cannot be denied if they are qualified attributable to one of those reasons. Kudler must choose which farmers to use for their produce, and they cannot pick one over another because of any of those reasons. The second group of laws is based around the ability to hire certain employees: disabled, youth, and veterans. Kudler must identify and clarify the job responsibilities so not to discriminate against potentially qualified candidates. The catering service may not permit employees under the age of 18 to work for Kudler if they serve alcohol. Additionally, the law identifies that employees with disabilities qualified for the position cannot be discriminated against. By making their positions available to the public, Kudler allows anyone to apply for open positions within the organization. Additional employment considerations and laws that Kudler Fine Foods should consider are: • Hiring processes that include (a) establishing which positions require to be filled, (b) agree on the hiring period for each position, (c) craft job descriptions, (d) craft position requirements, (e) establish minimum qualifications for every position, and (f) settle on the compensation (commission, salary, or hourly) pay range. • The Equal Pay Act prohibits sex discrimination on the subject of pay that (a) discovers if there are any present employees qualified or attracted to the opening, (b) agree on how to advertise the offered openings, (c) conclude which resumes and applications will be entertained. Daniel Steven writing for Employment Law Primer (2001) also suggests the following attributes be avoided: • Height and weight of applicant • Military service record • Financial issues • Marital status • Medical questions • Race, religion, gender, and age (Steven, 2001) Kudler does not control who is working for the farmers that they contract their organic business with. The difference is in the contracts, Kudler must make sure that they are not liable in any way for their farmers hiring practices. By associating with the farmers practices of bad hiring, Kudler Fine Foods may see those bad hiring practices affect the organizations image if the public were to find out or had issue with them. The contracts that Kudler has with the new employees and farmers must clearly identify the rights of every employee. As well, employers must verify all employees to make sure that they are legally eligible to work in the United States. Minimizing employee hiring risks before starting employment can save Kudler in the end legally and financially. References Apollo Group, Incorporated. (2003). Kudler. Retrieved September 13, 2010 from https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler/Operations/KudlerOps001.htm Centers for Disease Control and Prevention. (2000). Epidemiologic studies of cyclospora cayetanensis in Guatemala. Retrieved September 17, 2010 from CDC website: http://www.cdc.gov/ncidod/eid/vol5no6/bern.htm Department of Labor. (2010). Hiring Issues. Retrieved September 17, 2010 from http://www.dol.gov/compliance/topics/hiring-issues.htm Mallor, J. P., Barnes, A. J., Bowers, T. L., & Langvardt, A. W. (2003). Business law: The ethical, global and e-commerce environment, 12e. New York: The McGraw-Hill Companies. Mallor, J. P., Barnes, A. J., Bowers, T. L., & Langvardt, A. W. (2003). Business law: The ethical, global, and e-commerce environment, 12e. Retrieved from https://ecampus.phoenix.edu/content/eBookLibrary2/content/eReader.aspx Marler Clark Attorneys at Law. (2003). Chi-chi’s hepatitis a outbreak - Pennsylvania. Retrieved September 17, 2010 from Marler Clark website: http://www.marlerclark.com/case_news/view/chi-chis-hepatitis-a-outbreak-pennsylvania Organic Valley Family of Farms. (2010). About the USDA organic standards. Retrieved September 17, 2010 from website: http://www.organicvalley.coop/why-organic/organic-defined/government-regulation Ralston, K. (2004). Consumer food safety behavior: Consumer demand for food safety. Retrieved September 17, 2010 from USDA Economic Research Service website: http://www.ers.usda.gov/briefing/consumerfoodsafety/purchasing.htm Steven, D. N. (2001). Employment law primer. Retrieved September 18, 2010 from website: http://www.publishlawyer.com/employ.htm University of Phoenix. (2008). Kudler Fine Foods Virtual Organization. Retrieved from University of Phoenix, Managing the Business Enterprise website. University of Phoenix. (2007). Marketing surveys. Retrieved September 15, 2010, from University of Phoenix Kudler Fine Foods Sales and Marketing: https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler/Sales/KudlerSM003.htm World Health Organization. (2002). Variant creutzfeldt-jakob disease. Retrieved September 17, 2010 from World Health Organization website: http://www.who.int/mediacentre/factsheets/fs180/en