Slashdot Mirror
Mandriva CEO: Employee Lawsuits Put Us Out of Business
Julie188 writes: As you probably heard by now, Linux company Mandriva has finally, officially gone out of business.
The CEO has opened up, telling his side of the story. He blames employee lawsuits after a layoff in 2013, the French labor laws and the courts. "Those court decisions forced the company to announce bankruptcy," he said.
So, the CEO's side of the story is that it's all somebody else's fault.
OK, that's not surprising. That's one side of the story. And, the other side says?
http://www.geoffreylandis.com
Bless Your Soul....
Uh, so you got hit with penalties in court because "labour laws are very generous towards the employees in France", which really means "we weren't following the labour laws in the country in which we had an office and did business", and probably finally means "we tried to screw employees in a way that would have worked perfectly fine in North America or other countries but got called on it in France, which cost us a bundle" ...
If that was it, they didn't have much left to live. Sure, if you ignore laws and costs, you can make a business profitable that otherwise wouldn't be, but you don't get to ignore what you owe.
Now I'm not familiar with the laws in France, but in general I expect this was something like not paying a severance package, or not giving adequate advance notice. Those things are part of doing business and any employer should know about them. You can't just pretend they don't apply to your company.
Let the whole world see what kind of business they were running. I will bet he would not do it.
Mere property cannot complain in court.
It was an overdue justice.
This sig intentionally left blank.
If you don't treat your workers right, you deserve to be driven out of business.
I write sci-fi for metalheads
There's a shocker! Here I thought he was going to blame his lack of foresight and his inability to appropriate and prioritize resources in the correct proportions to the respective aspects of his business representing "revenues" and "liabilities".
I can picture it now: "Due to my inexperience with the legal environment of France, and as a consequence of lacking both humility, and respect/concern for the emotions/financial future of my employees: my mismanagement of Mandriva lead to betrayed expectations and violated commitments to such a grave extent that the company I was tasked with steering through troubled waters found itself embroiled in courtrooms, racked by legal expenses, and profoundly under-capitalized to endure or weather the extent of litigation that was invited by my perceived immunity to repercussions when using/abusing people and then throwing them away.
If I could do things differently, I would have been less patronizing and smug and found a way to make these tough financial decisions less offensive and antagonizing to their victims. I would have used resources more conservatively, and planned for the future contingencies better such that I did not find myself belabored to achieve the necessary market penetration and corporate vision/monetization-strategy to support my ambitious hiring decisions in accumulating headcount. Further, I would have utilized contractors and temps to a greater extent during periods of extreme demand, and avoided salaried employees so I could reduce hours worked when times were slow."
I know nothing about this guy or Mandriva, but based on his decision to blame-shift it sounds like a classic case of lack of planning coupled with big promises in exchange for sacrifice, followed by a hiring binge and subsequent layoffs/broken promises when the "ad hoc"/"make it up as I go" flying by the seat of the pants management style eventually came to a head. I say this having observed more than my share of shit heal executives building fiefdoms through nepotism, only to watch their house of cards collapse under it's own weight when profitability can no longer be delayed(I.E. change in the business cycle).
Mandriva Driven from Market after Losing Lawsuits from Men Driven from Mandriva
Employee contracts include the terms derived from employment law. That is the agreement the employer enters into. The employee might have chosen not to work there if not for this agreement. So the company was not doing well "if not for employment law" because no company which can't afford to honour contracts is doing well.
The company was having trouble in 2013 so it laid off some employees without compensating them as required by French law
Had they compensated the employees correctly there would have been no lawsuits and no judgement to pay.
The employees who were laid off in 2013 sued and won
Where is the evidence that the lawsuits were filed after 2014. If they were filed before 2014 the fact that the company did better in 2014 is irrelevant.
Had the company had compensated the employees according to law it would not have had to pay lawyers and probably court costs and may have survived.
If the company had record profits I bet he would be a lot more willing to claim responsability!
The fear of this sort of fiasco makes establishing the company in London instead far more attractive. So the French are ever more stripped of talent. As a Brit I am grateful to the French for sending us so many talented people, but for the folk in France this is BAD NEWS. And this sort of story will discourage risk taking there even more.
It sounds like their mistake was not telling the shareholders "either pony up now to cover all of the legally-required costs of the layoff, or liquidate now and realize the assets will go to those we owe money to, including the employees. The choice is yours."
If France had American-style bankruptcy laws they could've filed for chapter 11 and reorganized, jettisoning the debt owed to former employees or at worst, making them accept stock in the "new" company instead of cash.
Knowledge is how to play a game, intelligence is how to win, wisdom is knowing what game to play.
This always ends badly for employees in the US.
Companies in the US typically fold and stiff their employees because there are no strong laws which protect employees in this situation which have any teeth.
In the US:
1. There is employment at will. The CEO can dismiss staff with no recourse, provided all back pay is paid in a short time.
2. Most states don't require vacation accruals be paid out. California is an exception here.
3. Senior debt and taxes take precedence over paying employees, and there is a limit to how much back pay can be paid out (180 days or around $12,000 whichever is lower).
4. Most employees are covered by predispute arbitration contracts preventing them from going to a jury trial. California may change this with AB 465
5. State departments of labor are toothless and or afraid of going after businesses.
6. There is no legal mandate to pay severance pay.
French law is much more employee friendly. If a company is on its last legs, the employees should get the wages they worked for/
The employees who were not laid off in 2013, but who lost their jobs when the company went bankrupt, should find the former employees who sued the company and beat the living shit out of them for costing them their jobs.
The only gay bar in the area (actually like an hour plus away but the closest) is a bar called Sportsters... There used to be one called The Rainbow Club but they closed. I am not gay, I would admit it if I were, but the Rainbow Club was the BEST bar ever. It was the epitome of fun. I won the Halloween dress-up contest with doing nothing and being dressed as a 'heterosexual male.' They had dudes in drag with whips. AND fire! How could that not be awesome?
KGIII
Posting AC because absolutist /. has decided I posted too much today. Meh, I was bored!
His bad faith is obvious. Many companies manage to do profitable business in France. Labor laws indeed protect workers, but this is just something you can live with and still succeed.
Moreover, I could argue that protective labor laws can help increase workers productivity. When you do not have to wonder about securing your income for the next year, month or week, you may start focus on your job.
How did this insightful post go from +2 insightful to -1? I guess the Republicans that hate workers have struck again. This site has gone so CONservative.
...
So? You think running a successful business takes some kind of extra special skill set? Higher levels of skill, talent, and perseverance than earning a PhD, and/or making a discovery, advancing science?
I have done both and I can tell you that the set of talent to obtain a PhD degree is different from the set of talent required to successfully run a business
The quality of Slashdot crowd has sunk to a new low, with people actually posting comments ridiculing people with skill set other than theirs
Where is the humbleness of a scholar, the curiosity of a adventurer and the tenacity of a researcher?
In other words, instead of nerds that we are attracting, Slashdot ends up attracting a bunch of ignorant assholes who think they are smarter than the rest of the humankind
The subject of the lawsuit. Why did the layoffs sue? I read the article but that didn't make it clear.
For those who seek perfection there can be no rest on this side of the grave.
So what's your point?
I was forced to run Mandriva on my work laptop for an entire year. It is what I would call a "loser distro"
As a somewhat experienced UNIX person who had never actually run it as a desktop I was thrilled at first. After spending needless hours to get very basic things to work (wifi, hibernation, "sleep", etc) I was ready to give up on this whole Linux on the desktop thing.
The final straw was when I tried to get the Arduino compiler to work. Open source hardware and software would be a great combination, right? Except nobody builds packages for Mandriva. It took me 3 days of manually chasing down dependencies, downgrading gcc, etc. In contrast, running the same IDE on Windows via VMWare took about 3 minutes.
I doubt many tears will be shed -- except by any companies that had standardized on Mandriva for reasons that are beyond my comprehension.
Lesson learned: stay away from unpopular distributions for real work unless you created them yourself or have another extremely compelling reason...
I like how everyone is bashing France but the French law comes to a cost for the employee.
The median wage for a French software developer is about €37700 which is about $41000.
http://www.payscale.com/research/FR/Job=Software_Engineer/Salary
The median wage for a states based software developer is about $92660 .
http://money.usnews.com/careers/best-jobs/software-developer/salary
And this goes basically for all skilled jobs. They're paid better in the US then in Europe. You pay less wage in Europe so you can lay aside some money to adhere to the laws in Europe regarding pay. In the end as a company you're paying the same.
There is a reason for this: "the stupid French laws." So all the while that Mandriva was being a business they should have invested some of their money in severance packets. Money they saved by paying less for their staff then they would have in the US.
Also: $500000 revenue? Is this a joke? I have a shop around my corner that sells cigarettes, they have more revenue. A hotdog stand has more revenue.
With such low revenue they really really can't stay in business.
You posted the same thing, word for word, earlier this week. You are boring. And Red Hat's profits and sales are increasing.
Contribute to civilization: ari.aynrand.org/donate
Startups involving a free product, launched in a employer hostile (I mean, "employee friendly") and expensive country, and with no expectation of making any kind of profit (or return for shareholders) is probably near impossible. And yes, you can get sued by your employees even if you're following labor laws.
That's what you often get when you are tech company and you fire the founder (http://archive09.linux.com/feature/52897). Orat least, that's my bet: marketing and management was blowing money through unproductive attempts to grow the business without enough focus on a viable product in their target market. That said... A quick google shows dozens of articles repeating what the CEO said, which eerily smells like "often repeated lie becomes truth". :-)
It's that sharp thing on the top of his head.
I'm beginning to feel disgusted by these cry-baby CEOs and investors.
Look, it's very simple: There are laws of physics. If your product cannot work with the set of laws of physics we have on this planet, then your product doesn't work, end of discussion. You can't cry over not being able to make the flying car of your dreams because gravity is so mean to you.
There are also man-made laws. If your company cannot work with the set of laws valid in your country, then your company doesn't work, period. You can't cry over not being able to make a profit because they are so mean to you.
It's really selfish, stupid and ignorant to enjoy the nice things that laws and regulations give you, like having a civilized country, safety, clean streets, heck streets at all, the ability to make contracts and enforce them (absolutely essential for every business!) and a thousand other things, and then cry that the evil laws make your business impossible. Quite the opposite, you imbecile! The laws make your business possible in the first place. Without them, you wouldn't have a business, and if you tried the first guy with a bigger club would take it away from you.
Assorted stuff I do sometimes: Lemuria.org
Let this be a lesson to the rest of you... don't set up shop in France (unless you are there to feed on the welfare state).
My argument is that the reality of such experiences makes France less attractive to future start ups, regardless of whether this specific firm is a start up or not.
The UK probably achieves a good compromise; after 2 years of service a person can't be sacked without cause, and if made redundant is eligible for a relatively small amount (1 week's pay per year of service). As to being deceived by your employer - that's just nasty...
So? You think running a successful business takes some kind of extra special skill set? Higher levels of skill, talent, and perseverance than earning a PhD, and/or making a discovery, advancing science? More than it take to create and play a hit song or write a best selling book? But it seems more and more that the most important things successful businesspeople have are connections, and the skills and willingness to finesse the legal system to bribe the powerful and cheat the most vulnerable
Toss The Turtle
Just dry up and go away, moron.
This is sad times when you get hundreds of clueless users spouting nonsense about labor laws they do not know or understand, while almost no people are discussing about the Mandriva linux distribution itself.
Even if France is expensive, most of the already developed world is also expensive -- if not for social then for other reasons. That's why countries like China and India make a living out of directly (services) or indirectly (manufacturing) participating in the world economy.
These days any company must ask itself: can I go on without cheap labor from outside?
That said, IMHO, things were wrong on a deeper level. I think Mandriva wanted to be a traditional company. More or less like Red Hat, which decided to go for the server as a way to increase revenue (and it worked, now we know).
I have a hunch that F/OSS and the sharing model imply novel ways to structure a company and part of the reason many endeavors flunk is exactly for trying to use old models for new situations. Crowdfunding would be an example of a new model, for instance.
Repeated times people sought and suggested alternatives for Mandriva. Some were adopted -- like Mandriva Club -- but still they were always more technically focused instead of trying to be bolder in new commercialization ideas.
It's not like it's too late now -- things can always be reversed. A new investor could appear out of nothing, the employees themselves could make a group to better transform Mandriva into something of more value... or the liquidation could come to a final result and Mandriva no longer of interest for anyone.
But there are were other problems to address. When we say the name sucks, that's not just purely a matter of aesthetic value: it's about the process of creating a brand, a griffe -- something that has value in itself. And which could be sold now.
When one considers brands (property of their legal owners) like Apple, Coca-Cola, Ferrari, Chanel, it's immediately clear what they mean and they also carry part of the idea of quality associated to the products which carry them. This is a sort of non-technical view that many businesses fail to accomplish (not just Mandriva). This is actually hard to get and easy to lose.
Once more, good luck to Mandriva folks! Thanks for all the fish...
If you employ people, pay them. They are your biggest expense, your biggest burden, the most important part of your business AND the source of ALL your income.
That said, if you employ people, you know that the cost of employing them goes FAR beyond anything to do with their salary. That's half of it, if you're lucky. You have legal, financial, and other obligations that all cost to have taken care of when you have employees. Anything from severance pay, health-and-safety training, pensions, paperwork, legal work on their contract, compliance work, etc.
That you didn't budget for that correctly, or failed to employ properly, is your own problem.
This hour long documentary "This World - Quelle Catastrophe! France with Robert Peston" (http://www.dailymotion.com/video/x2jjl85) really gives you some insight to this case. Yes, I do understand the hate for greedy corporations, but insane labor laws hurt workers and especially small companies.
It's worth noting that Mandrake/Mandriva was poorly run for a long time. Mandrake acquired Connectiva and took all the good work they had done and didn't add much value to it. They gutted Connectiva. Later, they were unprofitable and so they fired all of their Linux developers working on Mandriva Linux. Those developers formed Magiea, which still exists and is relatively strong. Mandriva then used Mageia as their corporate Linux offering. So they were using unpaid developers as their Linux base. They wanted a stronger brand so they forked Mageia and created OpenMandriva. The whole thing sounds like the CEO/Management were trying to exploit software commons for financial gain, without contributing back.
FTW!
It is posible to argue the pros and cons of the European vs American labor laws all day and i do have my own opinions on this, but when a company is on the edge, what people are legal entitled to does not always match up with what is, unfortunately, mathematically possible.
I have restructured companies for the last 15 years in the US, Europe and Latin American and have seen every scenerio possible. It is my experience that the employees almost always come out best when they take their payments over time and allow the company to keep as many people employed as possible. Sometimes this is hard to swallow and many people view it as unfair. That may be true, but it usually is the way the employees will receive the maximum amount of money.
The worst case usually occurs when the employees and creditors believe that the company is bluffing when they say they will go out of business when, in reality, the company is actually telling the truth. The F-you's and the blaming from both sides are often a needed emotional release but don't actually help anyone get paid. I have shut down dozens of factories over the years because there simply wasn't enough money in the bank account to pay what the employees were owed and their next paycheck.
As the person who has to tell 1000's of people that they no longer have a job, I can tell you that is sucks every time. Most people are good people who just want to come to work, do their job and support their families. The hard truth is that if a company is not profitable then keeping people employed is not possible.
My advice to employees would always be to find the most experienced corporate restructuring person you can find and hire them represent you and your fellow employees. These restructuring guys, who have worked on behalf of the companies for many years, understand the cold realities of the situation and will be able to get the employees the best deal possible. I have never seen anyone win when the company shuts down. The owners lose their investment and the employees lose their jobs and don't get paid what they are owed. Unfortunately, the emotions of everyone often get in the way of reality.
and gets sued into oblivion. The pay-right-now clause was undoubtedly because the company was already teetering over the precipice, and once they declared bankrupcy wouldn't be able to pay ever.
.
Play by the rules, (mainly don't run out of cash), secondarily, follow laws where you are and where you market, thirdly, take care of employees AND customers.
Balance it all, and you stay in business. Don't, and you are gone.
Mandriva is gone. Why? Sounds like they ran out of cash and couldn't pay people, and follow the laws (including paying court defined costs of doing business), keep people happy, and paying customers happy to pay enough to support it all.
Point fingers anywhere you want. They are gone due to lack of cash, why? Any number of reasons, and at this point assigning blame doesn't fix the problem, Mandriva is still gone.
... "When you pry the source from my cold dead hands."
Good luck Nokia with the purchase of Alcatel-Lucent. You'll get stuck with thousands of frogs, and you'll never get rid of them.
They're typically defining "poverty" as less than 1/2 the median income.
Citation needed.
These sources don't define it that way:
http://www.census.gov/hhes/www...
http://www.census.gov/hhes/www...
http://aspe.hhs.gov/poverty/15...
http://www.geoffreylandis.com
Because you know, that's a problem right there: not enough customers. I never gave Mandriva a shot, nor did I ever consider any sort of purchase. Were they ever making any money to begin with? Sounds like whining due to lack of a proper business plan.
Oh no, fukker! You do NOT get to pound the Capitalism drum while simultaneously asking for everyone to suddenly collectively take one for the team. The CORE TENENT of Capitalism is that business that are not profitable MUST shut down and be replaced by those who are more efficient. That magic free hand will correct it. Isn't that what you guys say? You are straight up being two faced here. And before you claim you don't believe that stuff, I'm not new here. I read posts daily and I know your UID. You ALWAYS pound the capitalism drum. You're a fukkin libertardian too which is another subject I can expound on but I digress.
BOOM! HEADSHOT! Best post of the day. Many internets you win today sir!
The result is that maybe on paper unemployment is lower, but several million people spend their days in low-pay (I can't even say "minimum wage", because we freaking don't even have that!), temporary jobs.
What I find disturbing, and paradoxical, is that this kind of affair results from managing an OS distribution. [S]hareholders didn't want to put up more money to save Mandriva, the report says. Obviously, labor laws provide no special grants. Would it have been different if Mandriva had been non-profit? Do people care what's the legal standing of the distros they use?
Free software movement should provide a business model which overcomes such relics inherited from the industrial revolution, just like it overcomes copyright laws...