Sunday, July 22, 2018

Life is Not Fair - Bad Bosses and Swindles

Bad Bosses

I have decided to explain to my son how life is not fair, and I also decided to share this with other Plano parents.  Our children need to understand the unfairness of life because living in a nice middle-class town -- living in a bubble -- they might not fully appreciate how good a life they have and how tough it can be outside the bubble.

Here are a few examples of how people can lose their jobs unfairly.  John Lasseter, famous for his work at Pixar (Toy Story, Bugs Life, etc.), was fired from Disney for pushing computer animation.  He was fired for being right.  Francis Ford Coppola wrote the script for Patton, and he was fired for writing the iconic scene where George C. Scott stands in front of a large flag and speaks.  Lee Iacocca was manager of the famous Mustang and was eventually fired by Henry Ford II.  Iacocca claims Henry Ford II said: "Well, sometimes, you just don't like somebody."

A common scenario is where you are hired by a manager who likes you and values you.  Then something happens and your manager is replaced by a new manager who hates you.  You might get fired.  You might get treated badly until you leave.  This happens very often.  When a manager who is good to you is replaced by another manager, it might just be a matter of time before you are forced to leave.  It is important to be aware of this, to not be surprised that you go from being valued to being disparaged.  Some people will like you.  Some people will dislike you.  You have not changed, and you have not done anything wrong, but circumstances change and you must leave.  Maybe this seems unfair, but that is life.  This happens so often that someone today at church just told me a similar story:  (1) she was a manager, then (2) her boss quit, then (3) her new boss did not like her, and (4) now she is working elsewhere.


It is important to realize a lot of cheating happens in business.  I remember reading about a medical doctor who had a contract with an insurance company that the doctor did not understand.  He naively thought that the insurance company would not offer him a contract that would be bad for him.  After signing the contract he discovered he lost money on every patient.  The doctor went bankrupt because believed in the goodness of people.  But when people work for a company they are sometimes not allowed to be good, they are sometimes required to be ruthless and deceitful.  I read this story about the doctor in a newspaper, either the New York Times or the Wall Street Journal.

Rolls Royce went bankrupt when it signed a contract with Lockheed.  Rolls Royce was losing money on every engine it sold for the Lockheed Tristar jet.  Lockheed held Rolls Royce to the contract and Rolls Royce went bankrupt.  A swindle is legal if you signed the contract and contract turns out to be bad for you.  Sometimes you do not understand that the contract allows you to be cheated.  You can be cheated and it is still legal because you signed the contract.

Here is a recent article: How Regulators Averted a Debacle in Credit-Default Swaps by Gabriel Rubin and Andrew Scurria, Wall Street Journal, July 8, 2018.  Here, Blackstone Group had a credit default swap on a loan made to Hovnanian Enterprises.  Blackstone asked Hovnanian to make a late payment so Blackstone could cash in on some credit default swaps.  Solus Alternative Asset Management felt that was fraud and sued.  A judge said no, it was not illegal.  If conspiring is not prohibited by the contract, then is is legal.

Cheating in business is as old as business.  In the book On Duties by Cicero, Book III within the book is a catalog of swindles.  The ancient Romans were not just conquerors, they were businessmen and well versed in swindling.  On page 122 of On Duties we see Cicero give a definition of "malicious fraud," then he gives some examples.


I should mention how salesmen get cheated.  Cicero gives examples of how people cheat when selling a property.  But when salesmen are employees, then they too get cheated.  But since this article is getting long, I will save the details of this topic for another day.


In the same vein as "life is not fair," is "Why ‘Can I Sue My Employer?’ Is Often the Wrong Question" in The Workologist column by Rob Walker, New York Times online August 3, 2018.
Here is the question asked by a reader:  "I have a new boss who is very unfair and abrasive to everyone. Hypothetically, would he be allowed to fire me just because he doesn’t like me? And if he did, what could I do procedurally and legally to fight back? "
Here is the answer:  "As a legal matter, unless you have an employment contract that says otherwise, he could absolutely fire you because he doesn’t like you."
The underlining is mine, added to highlight the point made in this blog entry.

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