• April 16, 2018

Leonetti’s Frozen Foods, Inc. hired Rew Marketing to help promote Leonetti’s frozen stromboli. Through Rew, Leonetti’s was working on a deal to get its stromboli into Sam’s Club, the huge retail warehouse club/grocer owned by Walmart.

Rew helped Leonetti’s meet the stringent requirements that Sam’s Club imposed (“two crucial tests”) to get its stromboli sold at the Sam’s Club in-store cafes. When an email was broadly sent out to Rew and Sam’s Club employees that Leonetti’s stromboli passed the Sam’s Club tests, with accompanying photos, one Rew employee responded to the good news (“replying all”):

“Nice job[. we] could even use slides 2-5 in our Costco Presentation next week :).”

Sam’s Club was not happy to learn that Rew was going to use photos from its work with Sam’s Club to sell Leonetti product to Costco, Sam’s Club’s big rival. Sam’s Club terminated discussions with Leonetti’s the next month.

What lessons should we learn from this?

  • Sam’s Club does not have Leonetti’s stromboli and this is one more reason not to go there;
  • Businesses can be extremely territorial, many demand abject and total loyalty, and they sometimes mete out the commercial equivalent of capital punishment for what they perceive as disloyalty or promiscuity;
  • Over the past 30 years or so, inadvertently broadcasted emails or poorly worded emails have probably caused people and companies hundreds of millions of dollars of damages. If we add imprudent tweets or Facebook posts, that might double the amount of damage.

Photo by Jonathan Rotondo-McCord

It might take us decades either to tweak technology to mitigate the risk of sloppy electronic communication errors (“are you sure you want to send this?”) or retrain humans to reflect more before hitting “send” or “enter.”

In the linked decision, the U.S. Court of Appeals for the Eighth Circuit reversed the trial court’s grant of summary judgment in favor of Rew. The district court had concluded that there was insufficient evidence from which a jury could find that Rew’s “oops” email resulted in Leonetti’s loss of Sam’s Club business. The three-judge panel at the Court of Appeals thought otherwise.

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