Slashdot Mirror
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.
The lawyers.
$125,000.00; What's your number?
People who aren't poor.
And old-school AmEx cards have no limit (in theory). And the balance on those old style accounts is due in full when the next statement is presented. Back in the day, it wasn't a credit card so much as a way for rich folks to pay for things while travelling without carrying a bunch of cash around or get businesses to accept personal checks. They'd pay the month's bill in full immediately, not carry a balance like poor people do with a regular credit card.
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?
This is entirely correct. I have a corporate Amex. The card is mine. My debt, my responsibility.
All that is different is that it is conveniently integrated into the company's expense reporting system, so rather than fiddling with receipts, I can just click on the charges and they get dropped into my expense claim with all the necessary details transferred.
I should use this sig to advertise my book ISBN-13 : 978-1501515132.
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.
Not strictly true. The term used was (is) 'no pre set spending limit'. What this means in practical terms is that every charge authorization request goes through a complex decision tree based on many pieces of financial and fraud data before approving or denying the request. If your financial assets do not support your ability to pay for a charge, it won't go through. These products are charge cards, not credit cards. The 'no limit' misconception is fairly common though, just ask any of their call center employees.
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,"
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.
Also found in the story:
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," according to his suit.
Because, "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," according to his suit."
Depends.
It would give you a good case to claim partial ownership.
The Kruger Dunning explains most post on
True. And when the company doesn't reimburse you within the set limits, you are also responsible for the late fee.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
LOL about the vendor not taking a check. They lost a bunch of money on going through a credit card transaction.
A successful API design takes a mixture of software design and pedagogy.
You fail at reading.
Because, "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," according to his suit."
Sorry, teleporters just kill you and then make a copy. A perfect, soul-less copy.
AmEx cards don't have a pre-set limit.
My AmEx card begs to differ.
You probably have an Amex credit card, rather than an Amex Charge card. The latter has no preset spending limit, however, the balance must be paid off within 28-30 days or you get dinged with a 30% interest charge and lose any points that your purchases would have earned for that month. You are considered not in good standing if you leave a balance on it past the interest free period.
If you had a platinum charge card, it would have arrived in a leather bonded portfolio.
Jesus was a compassionate social conservative who called individuals to sin no more.
Having has to suffer for a time working for a company that had something of a scam going regarding employees and AmEx cards (Litton Industries, absorbed by Northrop-Grumman in 2001) I have some insight into how the story might have unfolded.
Litton Industries had AmEx cards issued to employees. It had your name on them, you were required to activate and use them, you were solely responsible for paying the balances, but the limit was set by AmEx based on Litton Industries' financial situation and thus were effectively unlimited. You were required to pay all company travel expenses with them (even charging airline tickets to them) and file for re-embursement when the trip ended (or monthly is it was long-term). Thus the employee could be on the hook for quite substantial amounts of money at the direction and for the benefit of the company.
Something like this could have happened to the poor employee.
But back to Litton Industries. They could not process a reimbursement claim (which required multiple sign-offs) within a week, it often took two (or even more). And they had a "payment cycle" that cut a check only once a month, if approval came in by the cut-off date. So if you took a one-week trip, filed immediately upon return, it was almost impossible to get the check in hand before the monthly bill was due, and thus you either had to pay the balance off out of your own personal funds, or you were hit with a late fee that the company would not reimburse for.
I did not stick around there for long.
Starships were meant to fly, Hands up and touch the sky - Nicky Minaj
no one gives a shit
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.
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.