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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.
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?
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.
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,"
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."
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
You guys really need to mod me down instead of up. I was totally wrong. I didn't read the second page.