In a highly unusual public relations move, Reebok International has posted the notice of class action lawsuit brought against the company by California native Michael Stewart.
Multinational companies notoriously employ one of two strategies when it comes to suits against them. Neither of those strategies involves posting allegations. What’s more, the actual notice of class action lawsuit on their marketing website. I think the move is brilliant.
I don’t know the actual motivations behind their move. I can only speculate that Reebok finds it better to confront the issue head on rather than to obfuscate or flatly deny. Ultimately, it is uncertain if such frankness and openness may engender further product loyalty by Reebok fans or if it will hurt the brand and Reebok sales. What we do know is Reebok is not afraid of a fight–a quality most humans can admire, if not emulate.
And what exactly is the fight?
The class action lawsuit alleges that Reebok violated California Civil Code 1747.08 and California Business & Professional Code 17200 et. Seq. by requesting or requiring that credit card customers provide personal information, such as their home phone number, in situations where doing so was prohibited by statute. Reebok denies that it has done anything wrong and is vigorously contesting the litigation. The suit against Reebok seeks an award of civil penalties up to $1000.00 for each class member against Reebok as a result of damages sustained by the alleged misconduct.
Here’s the dealio. The class action is filed on behalf of people who bought Reebok footwear or apparel at a Reebok, Rockport, Ralph Lauren Footwear, Greg Norman Outlet or a Concept store in California, using a credit card from the period July 1, 2003 through the judgment date of the lawsuit. At a minimum, Reebok is exposed to liability for three and a half years. The trial itself is not scheduled to begin until October 30, 2006.
Just for giggles, let’s say of the five stores named, each has 10 outlets in the state of California. That’s fifty stores. Let’s say that each store, over the minimum three year period July 1, 2003 to July 1, 2006 sold Reebok gear to 1000 credit-card wielding people. That’s now 50,000 people. If Reebok loses the suit and is forced to pay the penalties asked for in the suit ($1,000.00/per plaintiff)-the company could be out 50 million dollars!
So why, as a defendant in a class action lawsuit which may ultimately cost them 50 million dollars PLUS legal fees, would Reebok post this on their site? There are myriad other more discreet ways to let the public know their rights. All deductions lead to engendering good will. And possibly saving 50 million dollars. I hope it helps them. We shall be following this distantly.
