Regulatory Environment at Kudler Fine Foods

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Regulatory Environment As a result of Kudler Fine Foods' (KFF) decisions to implement a catering service and contract for organic produce with local growers, KFF will close multiple departments at three stores simultaneously and layoff several workers. The potential outcomes of the company's proposed actions are analyzed in this paper with attention to employment law, supply contracting, regulatory issues and product liability. Temporary Departmental Closings KFF has decided to implement a catering service prompting the closing of the deli, confectionary and on-site prepared meal departments for three months at 3 different store locations simultaneously. The following questions are relevant to the scenario: Can Kudler legally shut down these departments? Employment-at-will is defined in the KFF employee handbook as the employer or employee having the right to terminate the employment relationship at any time for any reason. According to the employee handbook, "you or KFF [may] terminate your employment at any time for any reason" (University of Phoenix [UOP], 2006). Therefore, KFF does indeed have the legal right to move forward with their plan. What obligations does Kudler have to its employees? If KFF moves forward with laying off employees, "word of cutbacks should come directly from an affected employee's manager and not from a mass e-mailing or companywide announcement…[m]ore lawsuits are initiated and contemplated—and more emotional damage is done—during that short moment when a manager lets [an employee] go." (Hicks, 2001). What alternatives to layoffs could KFF consider and why? Alternatives to consider include retraining, reassignment, using banked leave time, early retirement, voluntary furloughs and reduced workweeks (Smith & Murphy, 2001). The ethical dilemma at play is KFF's need for cutting costs coupled with the need to increase profits with the catering business line. Contracting with Local Growers A contract is a legally binding and enforceable voluntary agreement. Should Kudler enter into contracts with local growers? Contracting with small local growers will be a win-win for both parties given the following information from CNN: Supplying large grocery store chains is often too big a job for small organic farms, and many of the small, local grocery stores have been eaten up by larger ones, creating a problem for many organic farms, said Bob Scowcroft, executive director of the Organic Farming Research Foundation. "While there's an element of truth around bigger growers impacting smaller growers, it's not really either of their fault," Scowcroft said.

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