Tag: fiduciary duty

No Tip Reciept: The Legal Obligations of a Waitress


5510tA couple of weeks ago (I apologize for the delayed reaction) AOL Jobs featured a Claire Gordon's article about Victoria Liss, a waitress/bartender (the author called her both), who posted a copy of a customer's receipt on her Facebook page together with a photo of some guy who just happened to be the customer's double namesake.  She's done this in retaliation for a zero-tip and a note the customer wrote at the bottom, which basically amounted to a personal attack on her appearance.

The article has generated over 3500 comments.  If you scroll through them, you'll notice that most fall into two groups.  Those written by people, whose income at some point in their lives depended on tipping generosity, express compassion and support for Ms. Liss's being hurt by the "horrible" treatment; many share their own experiences of customers' "unfairness."  Others emanate the collective contempt towards the "obnoxious" expectations of tips by service industry professionals (especially in food and drink establishments), regardless of the quality of their work.  Many state that tips are essentially performance bonuses – a valid point I strongly uphold.

What surprises and worries me is that only a handful of commentators address the most important issue of the story – the illegality and immorality of Ms. Liss's act of publicizing the receipt to the whole world.  You see, it wasn't hers to use as she pleases.  A credit card receipt is a financial and legal instrument that binds together at least four entities: a credit card holder (customer), a credit card acceptor (merchant, in this case the restaurant as a legal entity and its owners), a credit card issuer (bank), and a payment clearance party (merchant service provider).  Do you see a waitress anywhere on this list?  With respect to the receipt, the server has a fiduciary duty to her employer to pass it to accounting.  That's it.  She was not supposed to copy it, take it out of her place of employment, or use it any other way.  Ms. Liss's actions violated the customer's personal rights to privacy and broke the fiduciary trust of her employer.   In addition, all those financial parties to the transaction are bound by the federal law to protect the credit card holders' privacy.   Ms. Liss exposed all of them to a possibility of civil legal actions and regulation censures.

Technically, every single party injured by Ms. Liss have rights to go after her: the customer, the poor innocent guy whose picture she posted, the employer, the merchant service provider, and the bank that issued the credit card.  At the very least, she should be fired.  And if I was in charge of Facebook's policy-making, I would close her account as well.  This has nothing to do with the freedom of speech – this is aiding in an illegal activity.             

Legal issues aside, what's up with the fact that she couldn't even remember the customer's face and got the wrong guy's picture?  Why nobody questions that?  

And I cannot help myself wondering about the other side of the story.  What prompted the customer to be so extreme?  Just your basic assholiness?  I doubt that.  Leaving no tip is one thing, but the text of the note may signify a reactive response to something that transpired beforehand.  Ms. Liss admits herself that her suggestion of fats multiplied by carbs was not welcomed by the guests.  What happened after that?  Did she walk away, mattering snide remarks about anorexia and bulimia?  You know, in that quite audible whisper, mastered so well by disgruntled service workers – the waitresses, the bartenders, the bank tellers, the park attendants, and so on, who hate their jobs and resent their customers.  At one point or another we all have been exposed to their passive-aggressive harassment.  Trust me, it can unbalance even the most stable of customers.     

Is Rupert Murdoch Really Responsible?


ImagesI get CNN's Breaking News emails.  I got one last week during Rupert Murdoch's questioning by the British Parliament's committee regarding the phone-hacking scandal that stems from News of the World and threatens to overtake the entire News Corp.  The email was dedicated specifically to his statement that he did not consider himself "ultimately responsible for the fiasco," and that these were misdeeds of the people he trusted.  In other words, he is blameless because he did not give direct orders and it was all his employees' fault.

Indeed, unlike Bernie Madoff he did not personally masterminded to rip off thousands of people; he did not instruct anyone to tap private phones and  bribe police officials.  For all we know he had no clue who poor Milly Dowler was until inquiries began.  News Corporation holdings include over 100 newspapers, magazines and TV stations.  He cannot possibly keep track of every single report they publish. 

He could not recognize (or so he says) most of the names of people working for him.  Also not surprising – News Corporation employs over 51,000 people worldwide.  We cannot expect him to know every single one of them.  I myself always argue that the Boss should deal only with the uppermost echelon of management. 

Yet, he does know Rebekah Brooks very well.  She's been making his scandalous rags Sun and News of the World profitable for nearly half of her life, climbing up the ranks with his personal support.  She knew how to deliver what was needed and he liked it.  In 1994, at 26, she hired techies to secretly wire the entire hotel suite for the interview with Princess Diana's beau.  And that was just a start.  Everything she did was ruthless, unsavory and amoral and Rupert Murdoch was promoting her for it. 

I wonder what kind of conversations this boss and this top exec had? 

RM: "Great job, great job, just watch yourself, don't get caught." 

RB: "I do what I can to please you, sir.  And don't worry – everything is under control, I hold them all by their balls."

RM: "That's my girl! Here's £3.5 million bonus.  Just don't tell anyone."

And that's makes him personally responsible.  He knowingly hand-picked this woman to be one of his top executives.  Journalism has seized to be an honorable profession long time ago, but Ms. Brooks' tactics go beyond levels of immorality we've learned to accept.  What kind of organizational environment he expected her to cultivate?  He knew exactly what he was doing, and I hope the British law enforcement will see it that way as well.

The reason this case is a good topic of discussion here is that business owners frequently display deliberate negligence in their executive staffing and still don't feel responsible for their employees actions. 

I know a national law firm specializing in consumer debt collections.  Most of the cases come in a wholesale form: debt-owners, such as credit card issuers and mortgage companies, outsource collection of delinquent balances to such attorneys.  This is very different from the regular law work when a counselor is face-to-face with his client.  This is bulk work – individual attorneys never meet the plaintiffs.  And that gives the principal partner the freedom to save on the quality of attorneys he hires.  He gets them straight out of fourth-tier law schools for salaries of office workers, he does not train them, he throws them into regional offices and lets them "swim or sink."  Meanwhile, thousands of cases get no attention and pass the statute of limitation.

There is no question in my mind that this is a violation of fiduciary duty to the firm's clients.  So, did Rupert Murdoch violated his fiduciary duties to the public by keeping Rebekah Brooks and letting her to do "her thing"?