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Salesforce, a Pillow Maker and a $125k AmEx Bill
itwbennett writes "Salesforce.com, pillow manufacturer My Pillow, and an employee of My Pillow are caught up in a complex three-way legal battle. At issue is an allegedly failed software implementation and a $125,000 charge on a personal card. In short, there was an aggressive go-live date, a demand for immediate payment, and a system that was ultimately 'not functional'. Now, AmEx won't remove the charge, Salesforce.com is suing My Pillow for breach of contract and wants $550,000 in damages, My Pillow denies it owes anyone anything and is seeking unspecified damages from Salesforce.com, and the employee with the big bill wants his account credited. Still unclear is why My Pillow had no choice but to use the employee's personal credit card — and why the employee was naive enough to hand it over."
Clearly news for nerds, a boring legal battle in a slightly incomprehensible summary.
Only the State obtains its revenue by coercion. - Murray Rothbard
I'm sure the employee wanted the miles.
...in the school of *Real Life* for the employee who lent his Amex card.
The derp is strong with this one.
Who the hell has a $125K limit on their personal credit card?!?
419'd by your own employer--ouch!
The lawyers.
What an executive of my pillow with a personal credit card with a credit limit higher than 125K paid it to some vendor of my pillow. Acting as the official of the company he offered to pay 125k in company check but the vendor refused to take a check. Even if he gave the vendor money from his creditcard, he should have issued that 125 k check from the company and deposited it into his account. But for some reason he did not. How did this chump get a card with higher than 125 k limit I cant understand. Fools and money are easily parted and fools and he should been taken to the cleaners much earlier.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
to even use an employee's Amex to begin with?! Hey, IRS, are you watching this? Time for an audit :)
if you read the credit card contract for AmEx 'corporate' cards, you will notice that YOU are actually liable for anything purchased with it if the company decides to not pay it [or can't pay, if it goes out of business]. nice for the company and for AmEx, not so nice for the employee.
and why the employee was naive enough to hand it over.
For the same reason I'd do the same, in a frickin' heartbeat - $2500 in rewards dollars (and AmEx gives "real" dollars creditable to your account; not "miles", not "bux", not "flooz"). And in general, legit companies not on the brink of bankruptcy don't usually flake on their bills. Though sometimes... They do.
It does surprise me that AmEx wouldn't reverse the charge, though - They have one of the most consumer-friendly (and practically merchant-hostile) dispute policies out there. You ask, they reverse it and ask questions later, with the burden of proof on the merchant.
>> there was an aggressive go-live date, a demand for immediate payment, and a (Salesforce.com) system that was ultimately 'not functional'.
Wait, is Salesforce is stealing SAP's business plan?
the employee could have $125,000 charged against their card. What kind of credit rating or card do they have? My best card is supposedly unlimited, but it's really capped at $32k.
What limits do other /.ers have on theirs?
And then they did a transaction against his card that was not approved.
IANAL but that sounds like credit card fraud to me.
Send them to prison.
1. My pillow contracts sales force to give them a custom solution
2. Salesforce agrees & begins work that was due by June 1st
3. Work isn't done by June 1st and SF rep asks for 125k to do it by Aug. 1st that gets paid by employee card cause check "wouldn't work"
4. Aug 1st. SF does not deliver
5. My pillow refuses to pay SF, SF re-instates credit card charges to employee's card
6. SF sues My pillow for 550k stating substantial advertising efforts, employee disputes charge in court.
So this isn't a 3 way law-suit...
Before you go denouncing SF as being the anti-christ remember, we don't know what the requirements were, or how they were manipulated by either party. The employee's card being charged doesn't make my pillow look good either.
Personally, if I was that employee I'd maybe try to sue the sales rep for misrepresentation in the overall grey light of this case.
Be sure to specify exactly what happens if either party fails to fulfill their obligations under the contract. JEDEC failed to do so, and had no recourse when Rambus broke one of their rules and secretly patented stuff they heard being talked about at JEDEC for inclusion in an upcoming standard. The most they could do was kick Rambus out of JEDEC.
Same goes for self-employed independent contractors. If your contract just says you'll be paid $x upon completing the specific work, you are screwed. They can delay paying you for months without consequence. At the very least you need to put accruing penalties for late payment in the contract. Ideally you'll also have dates after which you can take the contract to a court and immediately get a summary judgment instead of having to go through a trial. Without a solid contract, once you hand over the money (for prepaid work) or the work (for post-paid work), all your leverage is gone. You are completely at the mercy of the other party.
Sounds like a poor contract is what happened here. Salesforce.com promised a lot and didn't deliver. My Pillow's contract didn't specify penalties or discounts/refunds for non-completion of work. Consequently all they could do was offer Salesforce.com more money to finish what they were supposed to have finished under the original contract. The opposite is possible too - that Salesforce.com did its beset to fulfill the contract, but My Pillow kept changing the requirements. In that case, the contract should've specified how many revisions to the requirements could be made, limits on how much they could change, and by what date they'd be finalized. Either way, it was a poor contract.
I'd give you $125,000, but well ... RTFS.
There are two types of people in the world: Those who crave closure
It also depends on what other roles the employee had wrt the company, such as being a major investor or getting some sort of remuneration for the ads.
It does surprise me that AmEx wouldn't reverse the charge, though - They have one of the most consumer-friendly (and practically merchant-hostile) dispute policies out there. You ask, they reverse it and ask questions later, with the burden of proof on the merchant.
An article I once read about this case stated that that was exactly what happened:
Furlong subsequently disputed the $125,000 charge with American Express, and Salesforce.com credited back the amount
It wasn't until later that the questions were asked and proof provided by the merchant:
Furlong's card was subsequently re-charged for the $125,000 but this time American Express refused to credit his account, saying that Salesforce.com had provided "authorization for the charge and a signed contract and order form stating that no cancellations or refunds would be allowed,"
You just need to claim that you are a Mennonite, and for religious reasons you do not own a credit card. Generally employers know so little as to be unable to verify the check, and are usually too scare of state and federal laws around religious discrimination to mess with someone who has an education and a moderate level of affluence. (sorry to get all political, but people still take advantage of the poor on the assumption that they won't do anything about it)
“Common sense is not so common.” — Voltaire
AmEx did reverse the charge after it was initially disputed. It wasn't until Salesforce went back to them with the contract that stipulated no refunds under any circumstances that AmEx reinstated the charge.
Use your personal credit card for your company's expenses, you are a complete and utter moron.
If your boss ever says, "So can I use your credit card to buy this expensive product for the company?" you say.... "Here is my resignation, good luck."
Do not look at laser with remaining good eye.
On Aug. 1, Salesforce.com "attempted to take its systems live for My Pillow" but more than 100 components "were not functional," his suit adds. Furlong subsequently disputed the $125,000 charge with American Express, and Salesforce.com credited back the amount, the filing states.
So what is the big problem?
This directly goes back to why you don't let anyone but the developers set the completion date for software. When ever your handed a deadline, the first thing you do is schedule a meeting right away and then throw the deadline out. If as a developer you can't set the deadline then walk away from the table, the reason a lot of software projects fail is because feature lack, bugs and crappy code. Most of those can be fixed by having the time you need to actually work on set code. As an embedded developer I would never allow anyone to set my deadlines, I put pride into my work and I'm not going to have it rushed by some marketing team or a project manager who knows nothing about programming embedded systems.
TFA clearly states that the charge was reversed on the personal card.
It does surprise me that AmEx wouldn't reverse the charge, though - They have one of the most consumer-friendly (and practically merchant-hostile) dispute policies out there. You ask, they reverse it and ask questions later, with the burden of proof on the merchant.
According to TFA, AmEx did originally credit back the $125k to the guy. Afterwards, though, Salesforce approached AmEx with "authorization for the charge and a signed contract and order form stating that no cancellations or refunds would be allowed", and had the amount charged again. AmEx then refused any subsequent requests to reverse the charge.
Two words.
Black.
Amex.
Which needs about $200,000 charged in a year to achieve.
(And the ton of Membership Rewards points as another poster pointed out.)
TFA clearly states that salesforce appealed and had the charge put back on the card.
I'm surprised AmEx didn't want immediate payment.
Last time I had AmEx, I bought a house air conditioner at Costco - about $5000 or so. AmEx called up a few days later and asked us when the bill will be paid. I said on the day it's due. They immediately asked if they could be paid within the next couple of days. This went on a few times and a few phone calls - AmEx wanting payment immediately (despite being a cardholder for 20+ years). Then they demanded immediate payment to which I refused since the bill has not come yet.
In the end, the air conditioner was refunded because it was misadvertised as having a rebate that didn't apply to that model. The amount outstanding was paid minus the refund of the annual fees paid, and the account closed.
For a customer that has never paid a bill late for decades, they were surprisingly hostile especially since larger amounts were paid just fine. And of course, AmEx keeps soliciting for a card.
Every time this kind of slashdot story passes editorial standards, somewhere a cluestick dies.
Besides not being news to anyone (let alone nerds) TFS is wrong. The employee was not stuck with the bill. From TFA " Furlong subsequently disputed the $125,000 charge with American Express, and Salesforce.com credited back the amount, the filing states."
That seems hinky as amex does not allow merchants to stipulate that for amex transactions. Now salesforce may be big enough to have a one off agreement with amex.
No sir I dont like it.
A short anecdote:
A fifth grader was asked to write an essay on the virtues of a buffalo on a test. Alas he had only prepared to write an essay on a coconut tree. He thought about the requirements for a few minutes and started writing about the coconut tree and how useful it is. The last sentence read, "A coconut tree can also be used to tie a buffalo to the tree."
The only thing geeky about the article is that salesforce.com promised to deliver a software for tracking short form adverts by June 2012 and failed to do so. There is nothing else geeky about this article and has nothing to do with geeks.
Now, having disclaimed the same and notwithstanding the slashdot editors, who are similar to the fifth grade school boys in their understanding of what should and should not make the first page, I will give a run down on what is at stake legally.
Corporation X, corporation Y where corporation Y is a software developer entered into a contract for sale of a advert-response tracking solution. A salesperson of corporation Y promised final delivery of the tracking solution on or before June 1, 2012. Corporation Y did not make an explicit promise in their contract on delivery dates nor make that contract or payment towards the contract conditional on delivery of the advert-response tracking solution. Around July 2012, a salesperson of
corporation Y promised that the advert-response tracking solution will be made available on or before August 1, 2012 provided Corporation X paid Corporation Y $125,000. Apparently this subsequent promise was an oral contract. The salesperson of corporation Y refused to accept a check for $125,000 and instead asked the payment be made by creditcard as both Corporation X and the salesperson were too dumb to know what a crossed check or a/c payee check is.
Now based on this promise of Corporation Y through its sales person Corporation X used the Amex Credit card of it's corporation president to pay Corporation Y a sum of $125,000. Therefore, there was a promise with consideration. The consideration flowed from a third party, in this case a president of Corporation Y. The software was made available on August 1, 2012 by Corporation Y. However, according to Corporation X 100 modules were allegedly "missing or not operational". Corporation Y decided it did not like the implementation and asked the amex card owner and president to charge back the sum paid to Corporation Y. Corporation Y then sent an invoice for $125,000 to Corporation X. Corporation X alleged that the contract was obtained through fraudulent misrepresentation by the salesperson of corporation Y and therefore they were not going to pay Corporation Y. Corporation Y also alleges that they did indeed buy a low of short-form advertising("euphemism" for online adverts or 30 second adverts on tv with coupon or other tracking mechanism?). However, they were not successful.
Now, Corporation Y recharges the Amex Card using the previous authorization and previous contract and a pre-printed provision in the order form which makes all sales final. This is form contract with standard template. Now, this time Amex refuses to refund the $125,000 to a president of Corporation X. Therefore, the legal dispute.
Now the legal issues.
Firstly, corporation X was dumb enough not to have either the first or the second contract vetted by a good lawyer or they had a horrible in-house lawyer or ineffective legal counsel who should be fired forthwith. There is also a possibility of professional negligence, if indeed Corporation X used a lawyer or a law-firm to wet the contract.
Secondly, Corporation X alleged that the software was not operational as of September 17th 2012 and therefore not delivered or substantially delivered. Therefore it is a breach of the oral promise made by the salesperson in July 2012 and corporation X relied on this promise and paid Corporation Y a sum of $125,000 to finish the product and make it available to Corporation X. ( I don't see this being discussed in the original article.)
Considering that they may well not have receieved services rendered, AmEx is playing a dangerous game there- they're not supposed to DO what's being described.
If I claim that I didn't get what I paid for, have proof thereof, it doesn't matter what the business claims to have (or non-refundability thereof)- allowing that claim is an act of FRAUD.
It is hinky. If you don't get the services charged for, it's FRAUD for the party "supplying" them to bill for the same, regardless of contracts to the contrary, etc.
AmEx really pooched this one- unless they don't have proof that the billed GOT what was claimed, they just committed a Felony for all parties that approved it.
You just need to claim that you are a Mennonite, and for religious reasons you do not own a credit card. Generally employers know so little as to be unable to verify the check, and are usually too scare of state and federal laws around religious discrimination to mess with someone who has an education and a moderate level of affluence.
"Sorry, can't. I am a Mennonite... um, (software developer|computer engineer|adherent assisting in the sale of high-tech materialistic comforts via television infomercials).
(*cough*) Right. Well, best be off to my buggy then..."
Bonus points for insinuating that you don't respect your employer enough to tell a plausible lie.
(Just as an aside, but poor people have access to $125+k in personal revolving lines of credit from Amex now? I guess I need welfare—or perhaps insulation from the inevitable credit bubble collapse that would cause)
right ... mini bar charges. I think you are talking about pay per view.
which one of the three had to Bite the Pillow?
Back when credit cards were still charge cards too. When revolving credit cards (where you don't have to pay each money) changed their names to credit cards (credit is a positive, charge is a negative), AMEX kept the charge card description.
AMEX reminded me of this twice when I didn't pay in full at the end of the month. They said they didn't work that way and I wouldn't be able to charge anything until I paid it off. I replied that I didn't mind because I only used it on corporate trips and I didn't have another one for months, by which point the company would have reimbursed me and I would pay AMEX.
http://lkml.org/lkml/2005/8/20/95
Thanks Denny. Don't you have someone to sue or something.
Actually no, Amex did exactly what they are supposed to do. A signed and authorised transaction took place, Their was no fraud, however there is a dispute over the services rendered and this is between those two parties and perhaps a court to decide not for Amex.
It is actually the opposite, The onus is back on the employee to show fraud. Amex doesn't get to override contracts just because there is a dispute, that is for the courts. it sounds like they did receive services and hence no fraud, they are just pissed at the services they received.
This is common practice at startups, where they don't have rules in place against it like most (or all) larger companies. Employees can build up a really good credit rating, and get the rewards, by charging things to their card that the company reimburses.
Simply because this is more of a civil matter. Software was paid for and software is what they got.
this sorta thing matters. Whether you're buying it or making it, how these sorta disputes get sorted out makes a difference.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Back in 1998, I was pushed into applying for a corporate AmEx card by my employers, a consulting company of moderate repute. The idea was that I would use this for expenses related to travel. When I read the agreement in full, and understood that it was my responsibility, rather than my employers, to pay the bill I declined to apply. Shortly thereafter, I heard from other people in the company that it was expecting them to charge various IT related expenses to the card, and was taking a very long time (over four months) to pay. This was clearly a credit-kiting scheme cooked up by corporate finance to support the company's cash flow. When I told my boss that not only had I not applied for the Amex card, but that I had no credit cards (true: I tore them up about a year before), I was treated with disdain. A few weeks later, I was asked to resign under the pretense of some irregularities in my job application (which I had been forced to fill out after I had been accepted by the company and switch coasts). For a variety of reasons, not the least of which is an NDA, I can't reveal the name of the employer. I can say that they were swept up in one acquisition after another, and few people remember the name fifteen years later. But I still remember how much I came to distrust them, starting with an employer trying to force loans from its employees. Beware!
You guys really need to mod me down instead of up. I was totally wrong. I didn't read the second page.
I just left $100 in an envelope under a rck at the parking deck's second floor, by the stairway.
Could you ship the computer to me at:
Ann Onymus Chowert
C/O Hache T. Teepee
Slashslashslashdotdot org.
You can get the exact address of our organization's shipping address from the front desk. The phone number is 888-555-1212.
This isn't about geeks. That is correct. It is about a nerd getting a really bad deal when faux nerds failed to delivereon what were to them magical promises, and the employer of said original nerd used and didn't back up the said nerd.
Now, if you are a nerd, and it occurs to you that you could be the next nerd in a situation like this (look at your pocket protector: is it hanging at a skew angle even as you read this?) then
this is stuff that matters
please hand in your nerd bag at the door.
You've been slashslashslash dot dotted
Correct Horse Battery Staple: 72 bits of entropy. Enter "Correct H" into google. When it generates the phrase, that's
"no cancellations or refunds would be allowed"
No performance required here.
Mr. Furlong's action is against his employer. My Pillow has less of a case against Salesforce. "no cancellations or refunds would be allowed".
deleting the extra space after periods so i can stay relevant, yeah.
There are no 'one off' agreements like that at Amex. Period.
However, terms and conditions are permitted for merchant charges, and the one noted above are not uncommon. It brecomes a tug of war between the implicit contract between merchant and cardholder, and performance.
deleting the extra space after periods so i can stay relevant, yeah.
The reason the whole thing started is the Salesforce liar (salesman) said he couldn't take a check for for $125K:
What is that supposed to even mean? I mean, I can imagine not being able to carry $125K in cash, but a check is a check. And if it's made Pay to the Account of Salesforce.com, it's not as if some mugger is going to get a hold of it and cash at the local Bank of America for crying out loud.
I'm not a lawyer, but I play one on the Internet. Blog
An article I once read about this case stated that that was exactly what happened:
You mean the article linked to in the summary?
Jesus was all right but his disciples were thick and ordinary. -John Lennon
Shh! If word gets out that I read those, my credibility will be destroyed forever.
It is somewhat of a good warning to Devs or others that might be tempted to use a personal card for a large business purchase (in order to get the points or whatever)...
don't do it unless you're 101% sure you'll be reimbursed...
Here's one more big tremendous I-don't-give-a-fuck clap.