Loblaws | Business and Stakeholder relationships | Loblaws - Hepatitis A | |
SPECIAL PROJECT OFFICER : SAPAN SHAH (300621781)
SUBMITTED TO : PROFESSOR JAMES MACDONALD

INDEX

1. Introduction 2. What caused this class action 3. All of the associated negative media coverage 4. What could have been done to avoid the issue from arising and What if any ethical breaches occurred. 5. Conclusions

Introduction:

Canada’s largest food distributor Loblaws was founded in1919 as one of the first “self serve” grocery stores by Theodore Loblaw and J. Milton Cork. This progressive idea significantly reduced overhead and prices, and allowed for rapid expansion to more than 80 stores in just over a decade. Loblaws groceterias expanded throughout Ontario and New York state. The Loblaw warehouse includes its own electric tram railway, giant ovens for baking cake and cookies, huge drums for blending tea, and 22 thousand feet of pipes for refrigeration. In 1978, The no name brand is introduced. With its distinctive yellow packaging and bold lettering, no name makes a statement, and offers significant savings over the national brands while matching their quality. As sales grow, Loblaw opens its first no frills store in Toronto, featuring the no name line. In 1933, Loblaws introduces its new “market stores,” with full-service meat and produce departments. In 1981, the first Loblaw pharmacy opens in Winnipeg. In august 2002, an employee of the Loblaws store located at 3671, Dundas street was diagnosed with Hepatitis A. Toronto Public Health (TPH) issued a notice and advised people who may have been exposed to the virus and approximately 19,200 people were vaccinated in response. It was alleged that Loblaws was negligent in exposing class members to Hepatitis A.
June 15, 2006, a settlement of this action was reached between the parties and approved. The claims process closed on October 31, 2006 and the settlement funds have been disbursed by the Settlement Administrator to all eligible claimants. The settlement was a compromise of disputed claims and Loblaws did not admit any wrongdoing or liability. Hepatitis A infected Person was granted an amount which was decided through an arbitration process.
WHAT CAUSED THIS CLASS ACTION:

On August 26, 2002, The Public Health Department of the city of Toronto released information an employee of the Loblaws was diagnosed with an acute case of Hepatitis A. The store was failure in maintain their day to day operations, supervising, training, handling the food product and employment of competent staff, this led to the class in action in 2002. The employer was a food handler in the production department in which fresh fruit and vegetables were prepared & sold at a Loblaws Supermarket and had been working while infected with the highly communicable disease ‘Hepatitis A’. It infected the society with the Hepatitis A virus and they breach the contract or breach of statutory warranty by selling the customers products which were safe and fit for human consumption. In context to the course on Ethics and Stakeholder Management, the above action is considered unethical for the society as a whole which includes Owners, Consumers, Employees, Government and Community. They are considered as stakeholders of any business and have to deal with the Business’s affairs either directly or indirectly.

ALL OF THE ASSOCIATED NEGATIVE MEDIA COVERAGE:

Our media statement in regard to the class action issued against Loblaws was not negative.

As they believe that Loblaws has built a well-deserved reputation for outstanding products and are working to resolve the situation in a manner that is fair for all parties concerned. Even Plaintiff gave Statement of Claim which states that they do not wish to litigate this matter in the media and do not think that is fair to the defendant. They also appreciate the effort by Toronto Public Health and have sued on TPH's behalf also to recover damages in the amount paid by the Province. They had also offered to work with Loblaws in structuring an early settlement.

What could have been done to avoid the issue from arising and what if any ethical breaches occurred?
The loblaws store should have taken strict measures and rules in order to avoid such a situation. If the management is strong enough to keep a track on routine activities, chances were such a situation would might not have occurred in life-time of the store. The rules should be same for all the franchise stores and should be implemented strictly in order to save the reputation of the company as a whole. The store has so far maintained a high prestige level in product maintenance and quality. The company should hire competent staff and provide skilful training in order to execute their activities properly with due care. If the employee suffering from Hepatitis A would not have been called for work on that day, such a class action would not have occurred.

Conclusion:
Therefore, we conclude in the above situation that not only the owners but the employees are also responsible for being ethical in and around the work place. The company needs to ensure that the employees or any other person who handles the activities on behalf of the organization is safe and healthy to work in the given condition. Management should hire competent staff in order to help serve the society better.

Bibliography: * http://www.koskieminsky.com/Case-Central/Overview/?rid=73 * http://www.paliareroland.com/loblaws * http://www.kmlaw.ca/Case-Central-Completed/Overview/?rid=73 * http://www.hotzlawyers.com/loblaws_hepatitis_a.htm * http://www.skyscrapercity.com/showthread.php?t=341120