Papa John's Founder Resigns

Papa John's founder and chairman John Schnatter resigned after using the "N-word" on a conference call. This may have been the last straw for the executive, who sparked controversy about NFL players "taking a knee" during the national anthem. Schnatter blamed league players and leadership for declining viewership he linked to declining pizza sales. Muddying the issue, Schnatter won unwanted support from some neo-Nazis.

This incident involved Laundry Service, a marketing firm that was helping Schnatter navigate future PR crises. During a role play, Schnatter said, “Colonel Sanders called blacks n-----s." His point was that the KFC chairman didn't face any backlash. A Forbes article details more of the conversation:

"Schnatter also reflected on his early life in Indiana, where, he said, people used to drag African-Americans from trucks until they died. He apparently intended for the remarks to convey his antipathy to racism, but multiple individuals on the call found them to be offensive, a source familiar with the matter said. After learning about the incident, Laundry Service owner Casey Wasserman moved to terminate the company’s contract with Papa John’s."

In a statement, Schnatter apologized: 

"News reports attributing the use of inappropriate and hurtful language to me during a media training session regarding race are true. Regardless of the context, I apologize. Simply stated, racism has no place in our society."

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Discussion:

• A Netflix executive resigned after a similar situation. What differences do you see in these two situations, and do they matter in  terms of the resulting resignations?
• Papa John's next challenge is how to distance itself from Schnatter, whose face is on the pizza boxes. Should the image be removed? Why or why not?

Before You Hit Delete: How to Respond to Emails You Want to Ignore

Students know how it feels: you spend hours crafting the perfect email—and then nothing. You refresh and refresh, check on your phone, laptop, and desktop. We know how it feels, so why don’t people respond to emails? Here are three common reasons and suggested responses for each. Sometimes having the language helps, and of course, these can be adjusted to the situation and for your own style.

Inappropriate or Untimely Request

• Thanks for the email, but this isn’t really my area of interest [or expertise]. I hope you find someone else to help.
• Thanks for reaching out, but I’m not the right person for this because . . .
• This sounds like a great idea, but I’m fully committed at this point. Best of luck on the project.
• Can this possibly wait until September when I’ll have more time to focus on this?

Obvious or Annoying Question

• May I suggest that you look at the policy for this information? [Add a link.]
• I’m not sure I understand your question. Can you please clarify how I can help?
• From my point of view, we already covered this when we talked on Thursday. I’m not sure how else to clarify my thinking on this.
• I’m forwarding your email to . . . who can better address your question.

Overwhelming Request or Question

• This is a lot! Could we schedule a quick call to discuss?
• I’m having trouble digesting all of this. Can you please send back a few bullets that I can respond to?
• The short answer to your question is . . . If you need more from me, can you please be more specific about how I can help?
• I can answer some of this . . . For your other questions, I suggest trying . . .

Admittedly, all of these responses require some engagement, but we respond to emails for good reasons: to demonstrate respect, to educate, and for reciprocity. I would argue that replying is “the right thing to do”—and a brief response requires very little from us to be good corporate citizens.

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Discussion:

• When have you written an email that was ignored? Why do you think the person didn't respond, and how did you feel? Could you have done anything differently to get a response?
• When have you ignored an email? Why didn't you respond?
• Do you agree that responding is the "right thing to do"? Why or why not? When, if ever, is it acceptable to ignore an email?
• What leadership character dimensions may be lacking when people don't respond to emails?

Netflix Comms Officer Out After Using Racial Epithet

Jonathan Friedland, Netflix's chief communications officer, was fired after using the "N-word" at least twice at work. CEO Reed Hastings sent an email to employees explaining the situation:

“Several people afterwards told him how inappropriate and hurtful his use of the N-word was..."  “We hoped this was an awful anomaly never to be repeated.” “The second incident confirmed a deep lack of understanding, and convinced me to let Jonathan go now." "[I should]...have done more to use it as a learning moment for everyone at Netflix about how painful and ugly that word is, and that it should not be used.” “Depending on where you live or grew up in the world, understanding and sensitivities around the history and use of the N-word can vary.” “For nonblack people, the word should not be spoken as there is almost no context in which it is appropriate or constructive (even when singing a song or reading a script). There is not a way to neutralize the emotion and history behind the word in any context.”

The first incident was during a PR meeting on the topic of sensitive words. It's unclear when and how the word was used the second time.

For his part, Friedland apologized on Twitter.

Discussion:

• What's your view of the situation and Friedland's use of the word? Consider that we don't have all of the context.
• Given what little we know, should Friedland have been fired?
• How does this situation potentially demonstrate a lack of humility?

Tesla Layoff Memo

Tesla will cut about 9% of its staff, according to a memo sent to employees. In the message, CEO Elon Musk is direct about the decision, which he claims addresses some overlapping roles. Musk also says that profits haven't been a priority but that the company must now focus on profitability to be successful.

In the last paragraph, Musk expresses his gratitude to those leaving the company:

"To those who are departing, thank you for everything you’ve done for Tesla and we wish you well in your future opportunities. To those remaining, I would like to thank you in advance for ult job that remains ahead. We are a small company in one of the toughest and most competitive industries on Earth, where just staying alive, let alone growing, is a form of victory (Tesla and Ford remain the only American car companies who haven’t gone bankrupt). Yet, despite our tiny size, Tesla has already played a major role in moving the auto industry towards sustainable electric transport and moving the energy industry towards sustainable power generation and storage. We must continue to drive that forward for the good of the world."

A Bloomberg article criticizes the memo for burying news that it will end its partnership with Home Depot. Musk does address the issue, particularly how employees are affected, in the fifth paragraph.

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Discussion:

• How clearly does Musk's memo communicate the news the employees?
• What organizational approach does Musk use in the memo? How effective is this approach given the situation and audience?
• What's your view of Bloomberg's criticism about the Home Depot decision? How, if at all, could Musk have handled this differently?
• What leadership character dimensions are demonstrated in Musk's memo? Where, if at all, does he fall short?

Tonys Recap: Speeches and Politics

As usual, the annual Tony awards was a star-studded night with fancy clothes and big celebrities. But this year, the show got political.

Most significantly—or most viral—was Robert De Niro's "F-bomb" preceding President Trump's name. He received a highly positive reaction from the Hollywood audience, with people cheering and standing. The comment, which De Niro repeated, was censored in the United States, but an Australian feed let it roll, so it's available in full on YouTube.

A highlight of the night was hearing graduating students from Marjory Stoneman Douglas High School in Parkland, FL, where a shooter recently killed 17 people and left more injured. Students sang "Seasons of Love" from "Rent" and encouraged us to "measure your life in love." A Washington Post article referred to this segment as "the most moving moment" of the night.

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Discussion:

• What's your view of De Niro's outburst: inappropriate, inspiring, or something else?
• How would you respond to the same question about the high school students?
• One could argue that De Niro is "just being his authentic self." How would you respond to this perspective?

University of Oregon Apologizes for Statement About Student Death

University of Oregon leadership missed the mark in its statement about a student's death during a lake trip. Although the university offered sympathy in the original notice, the statement included language that seemed to blame the student:

It is important to point out that this tragedy is connected to an unauthorized tradition among many college students. Students from many institutions have a history of demonstrating poor life choices during visits to Lake Shasta. These activities are contrary to the values of the University and Fraternity and Sorority Organization.

When criticized for the tone and insensitivity, leaders published a new statement, which excludes this paragraph, and posted their regret on Twitter.

University officials may have wanted to use the student's death as a lesson or a warning to others. On the face of it, this strategy wasn't all bad. After all, Shasta Lake is a known partying site and has been in the news for tents and other debris left by college students. One Twitter user commented, "I think the first statement was more appropriate. Although this young man's death is tragic, bad choices have bad consequences."

Discussion:

• What's your view? Was it wrong for the university to include that statement? Why or why not?
•  If not in this statement, what should the university leaders have done differently if they did want to focus on future safety?

Communications About Cuba Plane Crash

A plane crashed near the Havana, Cuba, airport, leaving more than 100 people dead and only three survivors. Cuban President Miguel Diaz-Canel delivered the bad news:

"There has been an unfortunate aviation accident. The news is not very promising. It seems that there is a high number of victims."

The president also described recovery efforts:

"Things have been organised, the fire has been put out, and the remains are being identified,"

The reason is unknown, although an Al Jazeera article referred to the Boeing 737 as "aging." Aviation accidents are rare, but a BBC article chronicles several, including the previous crash in Cuba, in 1989, which killed 150 people.

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Discussion:

• How well does the president communicate the events? We see only two short quotes here, so he may have said more. What else should he say? How can he communicate compassion?
• Research communications around other deadly plane crashes. How do the situations compare, and how should the communications differ?
• Should Boeing make a statement about the situation? Why or why not?

MSU's Denial as a Cultural Issue

A Chronicle of Higher Ed article blames Michigan State University's ambitions and culture for their leaders' lack of response to years of sexual abuse on campus. More than 12 people knew of complaints against physician Larry Nassar, but the abuse continued for years.

Lou Anna K. Simon's leadership is questioned in the article. Although clearly a committed leader to the university, Simon is criticized for focusing so much on "two decades of status-climbing" that a culture of denying any wrongdoing evolved. One of the trustees summed up the issue in a letter and emphasized "We must embrace our obligation to apologize and offer justice."

Apologizing may be a sore subject for the trustees because Simon avoided it in the case of Larry Nassar's victims, according to the Chronicle article:

She talked about how “it is virtually impossible to stop a determined sexual predator and pedophile, that they will go to incomprehensible lengths to keep what they do in the shadows.” She often used “regret,” “sympathize,” and “acknowledge” in her written statements, but not “apologize.” She emphasized that sexual assault is a societal problem, not a Michigan State one. She highlighted all of the steps the university had taken to prevent sexual misconduct.

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Discussion:

• Analyze the trustee's letter. What principles of business writing are followed? What are the strengths of the letter, and what could be improved?
• The trustee encourages MSU leadership to listen. What does he mean by this, and how would listening help the situation?
• What is the value of apologizing and admitting failure? What are the potential downsides, particularly for a university trying to improve its stature?
• This story illustrates several failings of leadership character. Which can you identify, and which do you think are most relevant here?

Behind the Scenes at Southwest's Crisis Response

A Wall Street Journal article describes the Southwest Airlines management team's quick response during the recent engine blowout that killed a passenger. The article describes a group of executives meeting and hearing their phones alert them to a plane in trouble.

CEO Gary Kelly said, "Everybody has a checklist" and “The protocol is well understood. It’s just to affirm that this is how we are going to work together. We are here to support the NTSB (National Transportation Safety Board)." Early steps included flying employees to the Jennifer Riordan's home to help the family manage travel arrangements and stopping all advertising on social media.

Airline employees also arranged for hotels or flights for other passengers and, for those staying in a hotel, left notes under their doors offering more assistance. Based on previous compensation to passengers in similar situations, the airline gave each traveler $5,000 an a $1000 travel voucher.

Discussion:

• Read the article and identify all of the positive steps the airline took.
• Reactions are consistently positive about the airline's response. What's your view? What were the strengths of their response and what, if anything, could the airline have done differently?
• What do you think will be the long-term impacts of this incident on the brand?
• To what extent do you think compassion played a role in how Southwest is perceived?

Passenger Dies on Southwest Flight

An engine exploded on a Southwest flight, which blew out a window and killed a passenger. The company has communicated about the tragedy consistently and in several forms.

On its website, Southwest posted several updates regarding the situation, starting with the initial event and ending with more information.

The second statement has the most detailed information and confirms the passenger's death:

Southwest Airlines Co. (NYSE: LUV) confirms an accident involving Southwest Airlines Flight 1380. The flight made an emergency diversion to Philadelphia International Airport (PHL) earlier today after the Crew reported issues with the number one engine which resulted in damage to the fuselage.

We are deeply saddened to confirm that there is one fatality resulting from this accident. The entire Southwest Airlines Family is devastated and extends its deepest, heartfelt sympathy to the Customers, employees, family members and loved ones affected by this tragic event. We have activated our emergency response team and are deploying every resource to support those affected by this tragedy. For a message from Gary Kelly, Southwest Chairman and Chief Executive Officer, please click here.

The aircraft involved today was a Boeing 737-700 (N772SW) and was enroute from New York LaGuardia (LGA) to Dallas Love Field (DAL). In total, the flight had 144 Customers and five Southwest Crewmembers onboard.  We extend our heartfelt appreciation to the Southwest Pilots and Flight Attendants who acted professionally and swiftly to take care of our Customers during the emergency diversion and landing.

Finally, Southwest Airlines officials are in direct contact with the National Transportation Safety Board (NTSB) and the Federal Aviation Administration (FAA) to support an immediate, coordinated response to this accident. Southwest is in the process of gathering additional information regarding flight 1380 and will fully cooperate in an investigative process.

Please join the Southwest Family in keeping all of those affected by today's tragedy in your thoughts.

CEO Gary Kelly conveyed his sympathy in a video posted on the Twitter and during a news conference. Both are obviously scripted, but perhaps this is appropriate given the timing and severity of the situation.

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Discussion:

• Assess Southwest's communications overall. What is they company doing well, and what could be improved?
• Now assess the news conference video, which is similar to the video message posted on Twitter. What delivery skills does the CEO demonstrate? What could be improved? Should he use a more natural style and "speak from the heart"? What are the potential downsides of this approach?
• How well does the company demonstrate compassion?

Starbucks Apologizes, Again

Two black men were arrested at a Philadelphia Starbucks. Witnesses say they were just waiting for a friend and asked to use the restroom. The reason for calling the police seemed to be the same: that they were just waiting for friend. But because they didn't order anything, they were asked to leave and did not. Other customers say this is common at Starbucks, and the only reason the police were called was because the two men were black.

The company, at first, gave a weak apology using unclear pronoun references (see "this" and "these"). A longer apology came from the CEO Kevin Johnson later. In the statement, he identified steps the company would take and closed with this paragraph:

Finally, to our partners who proudly wear the green apron and to customers who come to us for a sense of community every day: You can and should expect more from us.  We will learn from this and be better.

Johnson also posted an apology video.

In a video statement, Philadelphia Police Commissioner Richard Ross explained the situation from his point of view and defended the officers' actions. He also said that all officers get implicit bias training and gave an example of a police sergeant who was also denied access to a Starbucks bathroom. Ross's conclusion was that "they are at least consistent in their policy." Of course, not everyone agrees.

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Discussion:

• Analyze Johnson's statement. Who are his primary and secondary audiences? What are his communication objectives, and how well did he achieve them?
• What organizational strategy does Johnson's statement illustrate? How do you assess his tone and writing style?
• What is an unclear pronoun reference, and how are they used in the first apology?
• What's your view of the situation? Did Starbucks do wrong? If so, at what point(s)? Are you boycotting Starbucks, as some promote, as a result?
• Which leadership character dimensions are illustrated by this example?

Mariah Carey Talks About Having Bipolar Disorder

In 2001, singer Mariah Carey learned she had bipolar disorder, and now she is admitting it to the world. In an People magazine cover story, Carey talks about her initial denial and her decision to open up about her diagnosis:

“Until recently I lived in denial and isolation and in constant fear someone would expose me. It was too heavy a burden to carry and I simply couldn’t do that anymore. I sought and received treatment, I put positive people around me and I got back to doing what I love — writing songs and making music.”

“I’m just in a really good place right now, where I’m comfortable discussing my struggles with bipolar II disorder. I’m hopeful we can get to a place where the stigma is lifted from people going through anything alone. It can be incredibly isolating. It does not have to define you and I refuse to allow it to define me or control me.”

Bipolar disorder, also called manic-depressive disorder, affects about 5.7 million adults in the U.S., which is about 2.6% of the population.

Reactions to the news seem mostly positive, with comments such as this on Twitter:

This story reminds me of a TedX talk, "Everyone Is Hiding Something" about a woman's struggle with an eating disorder.

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Discussion:

• What are the potential personal and professional consequences to Mariah Carey of going public with her diagnosis?
• What do you hide about yourself that might be useful for others to know?
• What is the value of admitting personal struggles in the workplace?
• How does Mariah Carey's story demonstrate leadership character dimensions, such as courage, compassion, authenticity, and vulnerability?

Uber Halts Self-Driving Cars Following Death

A self-driving Uber killed a pedestrian in Tempe, Arizona, and the company is trying to understand what happened. In the meantime, CEO Dara Khosrowshahi posted condolences on Twitter. An Uber spokesperson also made this statement:

“Our hearts go out to the victim’s family. We are fully cooperating with local authorities in their investigation of this incident.”

Apparently, a woman walked suddenly in front of the vehicle, and the local chief of police said, "It’s very clear it would have been difficult to avoid this collision in any kind of mode." A human backup driver, who was in the driver's seat without control over the car, confirmed the report. The first sign of trouble was the actual collision.

As a result of the accident, Uber announced it will stop all testing of autonomous cars. In California, autonomous Ubers were set to launch without human backups, but this may be delayed.

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Discussion:

• Assess the company's response to the news. We don't see an apology, per se. Should we?
• How can the company rebuild trust in self-driving cars after this incident?

Fired by Tweet

According to an NBC report, Secretary of State Rex Tillerson learned he was fired when President Trump posted a tweet. The President did call Tillerson in for a face-to-face meeting, but this happened "several hours after the president had publicly announced Tillerson's firing on Twitter." The White House claims that Tillerson was put on notice that his time was coming to an end, but Tillerson says he was shocked at the news.

The relationship had been rocky. The two disagreed over policy issues, such as the Russian's government's involvement in U.S. elections and negotiations with North Korea. In July of last year, Tillerson referred to President Trump as a "moron."

Of his termination, Tillerson said,

"What is most important is to ensure an orderly and smooth transition during a time that the country continues to face significant policy and national security challenges."

Discussion:

• What is the best way to deliver bad news?
• We have heard of many business situations in which employees are fired by text message. How does this situation compare?
• In what ways is this situation a matter of leadership character, for example, compassion or integrity?

United Backs Off of Bonus Plan

United announced moving to a lottery system for employee bonuses, but backlash caused management to rethink the plan. President Scott Kirby had distributed a memo describing the new process:

"As we look to continue improving, we took a step back and decided to replace the quarterly operational bonus and perfect attendance programs with an exciting new rewards program called 'core4 Score Rewards.' " 

The new program would include cash and other prizes and one quarterly prize of $100,000, which would be given to a random, eligible employee. Following the criticism, a spokesperson tried to clarify:

"We announced a new internal program based on United meeting certain operational and dependability metrics as a way of offering meaningful rewards to our employees. We believe that this new program will build excitement and a sense of accomplishment as we continue to set all-time operational records that result in an experience that our customers value."

Employee comments were harsh:

"Why should I be happy watching another employee get rewarded for my hard work? How would you feel if Oscar (United CEO Oscar Munoz) played roulette with your incentive package and it went to another vice president through a lottery drawing."

"This is truly disappointing. The current program 'costs' the company approximately $150 per 75,000 employees per quarter, totaling over $11 million. This new 'improved' program that we are supposed to be so excited about will cost the company $3.5 million per quarter. This saves the company about $8 million per quarter. Does Willis Tower really think the average front-line employee is stupid?"  

In a second memo three days later, Kirby announced a pause on the program, saying they would "consider the right way to move ahead" and "will be reaching out to work groups across the company, and the changes we make will better reflect your feedback."

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Discussion:

• What went wrong? Was it the bonus/lottery plan, the way it was announced, both, or something else?
• One employee commented, "Wow. I thought our morale was already as low as it could go, but I guess that was naive thinking on my part. I'm finally starting to understand that there will always be room for management to make me feel even less appreciated than I already do. How many times must they be taught, that if the employees aren't happy, no one is happy." What should the company leaders do now?
• The memos and employee comments were on an internal United system. What are the ethics of forwarding internal communications to the media?

Travis Kalanick Gets a New Role

Travis Kalanick's dramatic fall from Uber has a potential happy ending. Kalanick has joined the board of health company startup Kareo, run by Dan Rodrigues. Kalanick was an angel investor in Kareo, and he and Rodrigues founded a music company in the late 1990s.

Rodrigues announced the appointment in an email to Kareo employees:

I’m very excited to have Travis join our board. He is one of the most successful entrepreneurs of our generation. He has not only scaled a high-growth company, but transformed an entire industry. Travis and I have a long-standing relationship that goes back more than 20 years. We were classmates at UCLA and co-founders at Scour, a peer-to- peer search engine company in the late 90’s. Travis made an early-stage investment in Kareo in 2009. He has been an enthusiastic believer in our vision since our inception and he is excited to work with us more directly to bring innovation to healthcare and help us reach our goals for market leadership.

This is Kalanick's first venture after being ousted from Uber and is encouraging for leaders who have experienced failure. He has been quiet on Twitter since January but tweeted the good news and highlighted his relationship with Rodrigues.

Discussion:

• What other examples do you know of fallen leaders getting a second chance? Will we see this for Harvey Weinstein?
• Assess the email to Kareo employees. What does the CEO want to accomplish? How well does the message meet these objectives?
• How much do you think the friendship between Kalanick and Rodrigues factors into his board assignment? Why would Rodrigues emphasize their relationship in his email?

More Companies Take Action to Curb Gun Sales

Dick's Sporting Goods has taken a strong stance on gun control. In a statement, the company announced it will no longer sell assault-style rifles and will no longer sell firearms to people under 21 years of age. The statement dances the fine line between both sides of the gun control debate:

We support and respect the Second Amendment, and we recognize and appreciate that the vast majority of gun owners in this country are responsible, law-abiding citizens. But we have to help solve the problem that’s in front of us. Gun violence is an epidemic that’s taking the lives of too many people, including the brightest hope for the future of America – our kids.

Walmart also announced it will no longer sell to people under 21 years of age. The company ended some firearm sales in 2015, so this policy further restricts what people can purchase when.

Companies are in a tough spot. Dicks, Walmart, Delta, and other companies have suffered backlash for their decisions, including people promising to boycott.

Discussion:

• Compare Dick's and Walmart's statements. How do they differ? Which is more effective and why?
• Describe Dick's choices. What are the risks and rewards of the announcement?
• Should other CEOs jump into the controversy? How might the decision depend on industry, customer base, or the leader him- or herself?

Companies Distance Themselves from the NRA

Following the school shooting in Florida, several companies are distancing themselves from the National Rifle Association. The organization lists many member benefits on its website, including travel and insurance discounts, but these are shrinking as more companies are discontinuing services.

For example, several major car rental companies—Enterprise Rent-A-Car, Alamo Rent a Car, National Car Rental, Avis, Budget, and Hertz—and major airlines, such as United Air Lines and Delta, will eliminate discounts for NRA members.

The NRA posted a statement on its website to deflect blame, reinforce its mission, and deny the impact of these companies' actions:

FAIRFAX, VA – The more than five million law-abiding members of the National Rifle Association have enjoyed discounts and cost-saving programs from many American corporations that have partnered with the NRA to expand member benefits. 

Since the tragedy in Parkland, Florida, a number of companies have decided to sever their relationship with the NRA, in an effort to punish our members who are doctors, farmers, law enforcement officers, fire fighters, nurses, shop owners and school teachers that live in every American community.  We are men and women who represent every American ethnic group, every one of the world’s religions and every form of political commitment.

The law-abiding members of the NRA had nothing at all to do with the failure of that school’s security preparedness, the failure of America’s mental health system, the failure of the National Instant Check System or the cruel failures of both federal and local law enforcement.

Despite that, some corporations have decided to punish NRA membership in a shameful display of political and civic cowardice.  In time, these brands will be replaced by others who recognize that patriotism and determined commitment to Constitutional freedoms are characteristics of a marketplace they very much want to serve.

Let it be absolutely clear. The loss of a discount will neither scare nor distract one single NRA member from our mission to stand and defend the individual freedoms that have always made America the greatest nation in the world.

Discussion:

• Did these companies make the right decision? Some NRA members are boycotting them as a result.
• In its statement, the NRA refers to companies' "shameful display of political and civic cowardice." Do you see their actions as cowardice, courageous, or something else? What is the difference?

Delta Representative Confronts Customer—on Video

When a Delta flight from Honolulu to Portland, OR, was delayed twice, a customer was re-booked on a Hawaiian Airlines flight, but his luggage didn't make it.

We don't see the context, but the passenger filmed (NSFW) an interaction with Delta staff, and the scene doesn't reflect well on the company. In the video, one of the agents says, "You can take my f-- picture if you want to, a--hole." He then suggests they call the police because "This guy's out of control."

Delta replied to the incident with a statement:

"The actions displayed by this employee do not in any way reflect the standard of customer service and professionalism we expect from our employees. This conduct is unacceptable, and we have reached out directly to the customer and apologized."

The employee was suspended.

Discussion:

• The employee has little excuse for his behavior, but could some context at least explain the agent's reaction? For example, why would he say, "This guy's out of control?"
• Did the passenger act appropriately? What is his responsibility for the interaction?
• Should the airline reinstate or fire the agent?

Critics Say Bank of America Fees Hurt People with Less Income

Customers want Bank of America to stop charging fees for accounts with low balances. The company ended its free checking account and will start charging $12 per month.

Critics say the decision disproportionately hurts low-income consumers. The president of a financial advocacy organization explains the consequences:

“The debate over Bank of America’s accounts and fees points to a larger economic justice issue — people with less income pay more to get cash, make payments, and conduct their business. Without access to safe and affordable bank accounts, low-income consumers often turn to costly alternative financial services, such as currency exchanges or check-cashers. The bottom line is: the most financially vulnerable need more and better options to transact their business and participate in the financial mainstream.”

Few big banks still have free checking options because they are expensive to maintain. Banks prefer to move customers to digital solutions. But many low-income people don't have smartphones or reliable internet access. More than 287,000 people have signed a Change.org petition.

Discussion:

• What's your view? Is Bank of America being unfair, or is this just a good business decision?
• What is the value of a petition? On what principles of persuasion does a petition rely?
• How well does the image on the petition site, shown here, work? The emotional appeal is obvious. Does it help or detract from the message?