Ethics Newsline®

In news from the other end of the economic scale, Starbucks baristas win a victory over tips, and British merchants report brisk trade in ethical Easter Eggs

VARIOUS DATELINES
Business-ethics news last week ranged from the implications of executive pay on roiling world markets to the ethical redesign of the Easter Egg. Among the stories:

• U.S. Congressman Barney Frank (D-Mass.), who heads the powerful House Financial Services Committee, told the Boston Globe that he will be calling for more scrutiny of executive compensation following upheavals in world financial markets. Frank claims that companies often reward executives who take extraordinary risk and that those risks are now imperiling financial systems worldwide. “It’s time to revisit the issue of top executive compensation,” Frank told the Globe. “We’re not just talking about the large amounts of money, but the perverse incentives they have” to take risks that can vastly increase their payouts. Frank contended that last week’s bargain-priced purchase of beleaguered Bear Stearns wiped out shareholder value but left many top executives — who had wiped out the company because of their bad judgment — with a fat profit.
• A dispute over tips at Starbucks evolved into a big deal last week. A San Diego court ordered Starbucks to reimburse $100 million to baristas — coffee-bar waiters — who sued, claiming their bosses unfairly and illegally co-opted part of their tips. The Superior Court judge ruled that the practice of splitting tips with shift supervisors was a violation of a state law prohibiting managers and supervisors from sharing in workers’ tips, BusinessWeek reports. Starbucks said its system was fair and planned to appeal the suit, which had achieved class-action status in California.
• The holiday weekend prompted sale of a new ethical product, reports the London Daily Mail: Eco Easter Eggs. Sales of organic and fair-trade eggs soared to record numbers, according to the Daily Mail, as did eggs confected from ethically sourced chocolate. In addition, consumer pressure has prompted many retailers to reduce waste in their packaging, with the big department-store chain Marks and Spencer reducing the wrapping on its Easter eggs by 75 percent, notes the paper.

Sources: Financial Times, Mar. 24 — Boston Globe, Mar. 19 — BusinessWeek, Mar. 21 — London Daily Mail, Mar. 21.

For more information, see: Related Newsline story, Mar. 10 — Related Newsline story, Nov. 5, 2007 — Related Newsline story, June 18, 2007 — Related Newsline story, May 29, 2007 — Related Newsline story, Mar. 12, 2007.