2020-03-31
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Coronavirus: avoiding reputation mis-steps

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Posted by Daniel Jennings on 31 March 2020

Daniel Jennings - Defamation Disputes Lawyer
Daniel Jennings Partner

As the Coronavirus crisis forces businesses to adapt, reports are filtering through of a number making a series of easily avoidable mistakes either in pursuit of their bottom line; an effort to capitalise on a sales opportunity; or by simple carelessness.

How to damage your reputation – take advantage of the situation

There were two incidents widely reported on 24 March 2020. The first involved Sports Direct which had already been embroiled in a controversy over whether its stores, and those owned by its parent company Frasers Group Plc, should be allowed to remain open. It was subsequently reported by a number of media outlets, including the Daily Mirror and a number of local newspapers, as increasing prices significantly in the face of increased demand. Pricing documents apparently show that, for example, kettle bell prices increased from £9.99 to £14.99 although, in an apparent attempt to pull the wool over customers’ eyes, the ticket prices suggested a reduction from an original price of £19.99.

Unsurprisingly, Mike Ashley was forced to issue a humbling public apology, but the damage had already been done and apologies can only go so far in mitigation.

Of course, some businesses will always try to take advantage of periods of increased demand; although this might be accepted in ‘normal’ times, this behaviour is totally out of step in the current situation, particularly when coupled with a misguided attempt to keep stores open resulting in justifiable, and reputation-damaging media storm. 

How to damage your reputation – treat your staff badly

Wetherspoons was another business that has acted controversially and damaged to its reputation.  Tim Martin, Wetherspoons’ chairman suggested that his pubs should be kept open despite the Government ordering all bars, pubs and restaurants to close. After bowing to the inevitable and announcing that the chain would close its doors on Sunday 22 March, Mr Martin then announced that his staff would only receive pay for hours completed before closing, and that no member of staff would receive any extra support until after the Government pays out on its promise to cover up to 80% of furloughed workers’ wages.

It is not surprising that many businesses find themselves in a precarious situation if forced to close suddenly and unexpectedly, but there are ways and means of dealing with the fallout and Wetherspoons did not provide a good example. Whether or not Wetherspoons’ finances are so desperate that it cannot afford to pay its staff is a matter only it and its accountants will know, but it certainly gives that impression.

Compounding the error

What is clear is that the reputation of both Sports Direct and Wetherspoon has been harmed, both in the eyes of the outside world and in the eyes, perhaps most importantly, of its staff who made that information public.

To make a bad situation worse, in what seems to be another mis-step, Mr Martin has apparently encouraged Wetherspoons’ staff to apply for vacancies at Tesco supermarkets.  This may have been a well-intentioned effort to help staff obtain further work; however, the overall message is one that has been widely castigated online for its uncaring attitude. The pressure on leisure and hospitality businesses has been well publicised; nonetheless, sympathy for those affected businesses, particularly when operated by large chains, has its limits.

Wetherspoons, having faced public outrage and received a complete traducing of their reputation online, has, unsurprisingly, had to perform a U-turn on this issue.  However, the damage has already been done. Nevertheless, Wetherspoons appears to have gone even further in their series of mis-steps and has, according to published reports, compounded the damage to their already tarnished reputation by not paying their suppliers.  At the time of writing there are no reports that this has been corrected. 

We will address, in a separate guide, whether or not a Wetherspoons’ supplier who is unpaid can recover their money and, if so, how a quickly.

Thoughtful communication with staff is key

While these are large companies making mistakes under pressure, smaller businesses under even more pressure are even more vulnerable to making similar mistakes; and the consequences can be even worse.

As businesses hopefully become more attuned to crafting their external communications carefully to avoid the sort of debacle as showcased by Wetherspoons, they also need to be aware of how they are communicating to their own staff and what will then be communicated on social media.

Thoughtful internal messaging is key. Whether explaining internal policy regarding sickness absence, or self-isolation, or the requirement not to cancel booked holiday, the messaging must be clear but sympathetic. Anything else is likely to generate ill-will among their staff who will, in turn, report their unhappiness to the wider world. Nowadays it is not only what a business chooses to say to the outside world that matters; all communications matter as they can, and will, become public.

For anything further please see our set of reputation management documents and/or contact us with any queries.

About the author

Daniel advises clients on all aspects of commercial litigation and dispute resolution.

Daniel Jennings

Daniel advises clients on all aspects of commercial litigation and dispute resolution.

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