Forever 21 Files for Bankruptcy
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Retailer Forever 21 has filed for bankruptcy, and employees are not happy. In its Letter to Customers, posted on the website, the company explains the process:
This does NOT mean that we are going out of business – on the contrary, filing for bankruptcy protection is a deliberate and decisive step to put us on a successful track for the future.
Hundreds of employees are planning to unionize with United for Respect, which also represented employees from Sears and Toys R Us during their bankruptcies.
The Washington Post reports employees’ reactions to the Forever 21 decision:
[S]everal employees cited past instances where Forever 21 swiftly closed stores with little warning or explanation, which prompted their concerns over how the company would treat employees amid bankruptcy.
Unions are seeing opportunities in retail employees. Private-section union membership has been shrinking in the U.S. and is now only 6.4%, compared to 33.9% of government workers. As retail employees get discouraged by their employers, union organizing activity has been increasing.
Discussion:
Analyze the Letter to Customers. Which principles of communicating bad news are followed? How could the message be improved?
Explain the ethics of a company filing for bankruptcy. Use an ethical decision-model, such as that in Chapter 1, to determine the effects.
What’s your view of retail employees unionizing? What are the benefits to employees and potential downsides of union activity and of forming a union?
